Leases Flashcards by Tom Paterson

Who grants a leasehold?

Granted by Freeholder

The freeholder normally receives a premium and ground rent.

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How does a leasehold work?

Own the property, not the land
Lasts for a number of years
Reverts to freeholder after the term

The leaseholder has rights to the property but must adhere to the lease terms.

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What are the procedural steps for granting a lease?

Landlord Solicitor drafts lease
Normal conveyancing process is completed
Buyer checks landlord’s mortgage and third-party permissions

These steps ensure that the lease is legally sound and all parties are informed.

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What is the conveyancing of leasehold?

Transferring an existing lease to another Party

This process involves legal documentation to ensure the lease is validly assigned.

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What are the procedural steps for selling/transferring a leasehold?

Usual Conveyancing Process
Deed of Assignment is required
Landlord consent is typically required
Authorised Guarantee Agreement often required

These steps ensure that the transfer is legally compliant and recognized.

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What is a sublease?

A lease granted below the lease

The sublease must follow the terms of the original lease.

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What is an Agreement for lease?

An agreement to enter into a lease in the future

Typically used in commercial settings while fit-outs are completed.

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What are the characteristics of a licence to occupy?

Personal interest
Doesn’t need to be exclusive
Licence fee is paid, not rent
Has no security of tenure
Licence doesn’t bind buyers
Not subject to SDLT

These characteristics differentiate a licence from a lease.

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Does labelling dictate if something is a lease or a licence?

No - facts do

The actual terms and conditions of the agreement determine its nature.

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What are the types of leases regarding period?

Fixed-Term
Periodic
Hybrid (Starts Fixed, goes to Periodic)
Tenancy at Will (Terminate any time)

These types define the duration and conditions of the lease.

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If advising a client on the FIVE biggest things to check in lease terms, what would they be?

Break Clauses
Rent Reviews
Repair Obligations
Assignment Rights
Cap on Costs

These elements are crucial for understanding lease obligations and rights.

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In the context of leases, what does “Alienation” mean?

Disposal of the Leasehold Interest

This includes assignment, underletting, and charging an interest.

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If a lease is silent on alienation, what is the default position?

Tenant can do as they please

Typically, leases include constraints on alienation to protect the landlord’s interests.

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If the right to assign, or underlet, is subject to landlord approval, can they absolutely withhold?

Generally, it is implied that such consent will not be unreasonably withheld

This protects tenants from arbitrary refusals.

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For clauses relating to property condition, what headings would you expect?

Repair
Alterations

These headings outline the responsibilities of the tenant regarding property maintenance.

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If your Client has a strange planned use for the land, what should you check?

Clauses restricting the use and purpose
Clauses requiring consent for a Change of Use application
Statutory restrictions on change of use/planning permission

These checks ensure compliance with legal and lease terms.

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Who normally insures in a lease?

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Lease will specify who insures what

The terms of the lease dictate the insurance responsibilities.

What is the Lease Code 2020?

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Professional standard for commercial lettings

It sets out mandatory requirements for regulated firms.

Under the Lease Code 2020, what must be agreed and documented in the Heads of Terms?

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Extent of Premises
Special Rights
Length
Renewal & Break Clause
Rent Review
Service Charge
Alienation
Repair & Alterations

These elements are essential for clarity in lease agreements.

In old leases, an original tenant remains liable for the entire term, even after assignment. What year did this change?

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1996

From 1996 onwards, the original tenant is no longer liable after an assignment by law.

Following the removal of the liability of the original tenant on assignment, what document was introduced by landlords?

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Authorised Guarantee Agreement

This document ensures the performance of the incoming tenant is guaranteed by the outgoing tenant.

If a Landlord’s consent is required for an assignment, is this absolute?

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If it includes the provision, it will be subject to an implied qualification that the consent cannot be unreasonably withheld

This protects tenants from unreasonable refusals.

How long does the landlord have to give consent/refusal of an assignment?

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Within a reasonable time from the tenant requesting consent in writing

If refusing, the landlord should provide reasons.

Can a landlord give consent conditional on something else?

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If that something else is reasonable

This could be outlined in the lease.

Is requiring an **AGA** reasonable from a landlord?

If it is reasonable, or if the lease expressly requires the AGA as a condition ## Footnote This ensures the landlord's interests are protected.

Can the landlord ask for **payment** for the assignment of the lease?

NO - unless the lease provides otherwise ## Footnote Landlords can recover reasonable expenses related to the assignment.

Your Client says his landlord is unreasonably refusing consent. What can they do?

* Act without consent * Seek Court declaration * Court Claim ## Footnote These actions can help tenants challenge unreasonable refusals.

If the Tenant has breached the lease by not paying rent, what can the landlord do?

* Debt recovery through court * Commercial Rent Arrears Recovery * Draw down from rent deposit * Pursue guarantor * Forfeiture (Terminate Lease, recover possession) ## Footnote These are common remedies for landlords in case of non-payment.

If the tenant has breached the lease other than non-payment of rent, what can the landlord do?

* Forfeiture (terminate the lease and recover possession) * Self-Help Clause (if included) * Specific Performance * Damages/Injunction ## Footnote These remedies address various breaches of lease terms.

If we’re dealing with the termination of a **business tenancy**, what should we be thinking of?

SECURITY OF TENURE PROVISIONS ## Footnote These provisions affect the tenant's rights to renew the lease.

What is **Security of Tenure** in business tenancy?

A general right to renew the tenancy at the end of its term ## Footnote The landlord can only object on certain grounds.

When does **Security of Tenure** not apply?

* CONTRACTED OUT (full process followed) * Employment Leases * 6 months or less * Licences/Tenancies at Will ## Footnote These exceptions limit the tenant's renewal rights.

What are the grounds on which a landlord can object to the lease, and the court has **NO DISCRETION**?

* Landlord willing to provide suitable alternative accommodation * Landlord wants to demolish, reconstruct, or carry out substantial construction work * Landlord intends to occupy the premises ## Footnote These grounds allow landlords to refuse renewal without court intervention.

What are the grounds on which a landlord can object to the lease, and the court has **DISCRETION**?

* Premises in disrepair * Arrears of rent * Substantial Breaches by tenant * Ending sub-lease to let the property as a whole (with substantially better rent) ## Footnote These grounds give the court the ability to consider tenant circumstances.

When can the tenant claim **compensation** for a landlord objecting to the renewal?

If they’re not at fault, and will suffer a loss ## Footnote This applies when the landlord's actions lead to financial detriment for the tenant.

If advising a Landlord Client, what would you recommend?

Fault ground, as there is no compensation ## Footnote This strategy minimizes potential liabilities for the landlord.

How can a landlord **contract out** of Security of Tenure provisions?

* Warning Notice served to tenant * Declaration by the tenant, accepting ## Footnote This process must follow specific legal requirements to be valid.

If the Security of Tenure Provisions remain, how does a landlord terminate the lease without renewal?

* Between 6-12 months to end of term * Notice to terminate and oppose grant of new lease ## Footnote This must be done using a specified form and ground.

If the Security of Tenure provisions remain, how does tenant request **renewal** of the lease?

Between 6-12 months. Serve S26 NOTICE ## Footnote This notice formally requests the renewal of the lease.

How does **security of tenure** work with break clauses?

* Tenant Break Clause = Notice to Quit = Once given, cannot serve a new S26 * Landlord Break Clause = ends contract, but statutory tenancy comes into effect = S25 still needed ## Footnote These clauses define the rights of both parties regarding lease termination.

Leases Flashcards

(40 cards)