Property Practice Flashcards

Question

What is the purpose of Local Searches?

Answer 1

Information known by the local authority such as local land charges, road schemes, planning consents, refusal notices, enforcement notices, smoke control orders, listed buildings, conservation areas, and compulsory purchase orders.

Answer 2

Search at a water company to ensure main water supply and sewer connection to the property

Answer 3

This will show if a property is affected by a coal mining area, the search will establish any historical or future mine or mineral extraction.

Answer 4

If a seller is a company, you must check that the company exists and has power, capacity, and authority to enter into the transaction.

Answer 5

Chancel Repairs Search (unreg land) Commons search (nr open land) Flood search (if at risk of flooding) Environmental Search (contaminated land) Bankruptcy or insolvency search (check no proceedings against individual or company)

Answer 6

Index Map Search - see if any cautions against registration or pending applications for registration Land Charges Searches - see if any encumbrances over unreg land such as easements, covenants, mortgages, estate contracts, and home rights

Answer 7

HMLR Official Copies Search - Reveals proprietor, property and encumbrances affecting the title Index Map Search - Necessary if property is compromised in more than one registered title, or where there could be mines/minerals registered under a title number different from the title numbers relating to the land itself.

Answer 8

Standardised practice framework for the sale and purchase of a home for an owner-occupier (not a new-build home) Regulates the relationship between the seller's and buyer's solicitors Intended to ensure that clients are treated fairly and protected during the transaction

Answer 9

Main source is mortgage finance through a bank, building society, specialist lender, or private loan from a trust fund or individual Solicitor must make the client aware of ancillary expenses in addition to the purchase price such as SDLT/LTT, HMLR fees, Search fees, Mortgage Agreement Fee and Premium for Insurance Policy (if applicable) Solicitor must be aware of their role if client requires financial advice in relation to arranging or advising in connection with a mortgage Solicitor must be aware of anti-money laundering procedures which is especially key with cash purchases.

Answer 10

Repayment, Interest Only, Endowment, Sharia Compliant

Answer 11

Repayable in monthly installments, partly capital and partly interest. The interest rate may be fixed or a lender's standard variable rate. At the end of the mortgage term the borrower will have repaid all monies owing to the lender.

Answer 12

The monthly installments are interest only, the interest may be fixed or at a lender's standard variable rate. Borrower must make arrangements to pay off the outstanding amount. At the end of the mortgage term, the borrower will still owe the original loan amount unless alternative arrangements have been made.

Answer 13

Borrower makes a payment of interest only. The interest may be fixed, or at a lender's standard variable rate. The borrower will purchase a life insurance product to pay off the outstanding amount of the mortgage. An insurance policy is taken out on the borrower when the mortgage is granted. At the end of the mortgage term, it will repay the capital when the policy matures or if the borrower dies.

Answer 14

Avoid the payment of interest. The bank may purchase the property and lease it to the buyer and then transfer it to the buyer at the end of the lease.

Answer 15

Acting for a buyer and a lender is common in resi property transactions. Both buyer and lender have a common interest that the property has good and marketable title. Buyer wants to know property has full and clear title to the property Lender wants to know that the property is satisfactory security for the loan against which it has lent the monies Acquiring a property with a defective title would undermine the value of the acquisition and the lender's ability to sell the property at market rate should it need to enforce its mortgage in the event of a default on the loan by the buyer The lender will request a certificate of title by the solicitor.

Answer 16

Confirms to the lender that the property being acquired has good and marketable title, if it is being acquired by the buyer to whom the funds are being lent and confirmation of the completion date to ensure that the funds are sent on time to complete the purchase. A certificate of title will be given to the lender (signed and dated by the buyer's solicitor) immediately before the completion of the purchase and the drawdown of the loan monies.

Answer 17

Used in contracts relating to residential property and small commercial property transactions. Requires seller to prepare a draft contract incorporating the latest edition of the SCS standard form of contract Amendments may be necessary to reflect current law, or specific instructions from the client.

Answer 18

Specified embumbrances Title Guarantee Deposit amount and method of holding deposit

Answer 19

It is necessary to specify all restrictive covenants, easements, and other burdens as the SCS states that the seller sells free from all emcumbrances other than those specifically listed in the SCS.

Answer 20

SCS provides that the seller will sell with full title guarantee unless amended. Full title guarantee implies a covenant that the seller disposing of the land free from emcumbrance. Limited title guarantee is that the seller has not encumbered the land and is not aware that anyone else has since the last disposition for value. The seller should specify if they are selling with full or limited title guarantee.

Answer 21

The SCS provides a 10% deposit is payable on exchange of contracts and that the seller's solicitor hold this as 'stake holder'. If this amount and/or capacity is to be varied, the relevant SCS must be amended.

Answer 22

Standard conditions more suitable for complex comercial property transactions where occupational leases are involved. It is more suitable where: Provisions relating to commercial leases involved such as outstanding rent review; or to provide for options to deal with various tax positions. The seller and buyer to the contract may agree to the contract to accept the SCPC as a whole or in part and may agree to vary any of the SCPC. The SCPC may have been drafted to the be a fair balance between a seller and a buyer.

Answer 23

To accommodate particular circumstances of a transaction or to vary the standard contract of the SCS or SCPC.

Answer 24

Special provision prevails

Answer 25

Disclosing a defect in title Listing encumbrances that affect the property Seller transferring title with limited or no title guarantee Payment of deposit is more or less than 10% Deposit is bring held as agent rather than stakeholder Payment of VAT Removal of fixtures and fitting by the seller that would otherwise automatically pass with the land Express inclusion of an indemity covenant to be given to the buyer.

Answer 26

10% (unless amended) of the purchase price is payable by the buyer on exchange of contracts to the seller SC and SCPC requires deposit to be paid electronically (BACS or CHAPS) from buyers Solicitor's account to the sellers Solicitor's account Then held by Seller's solicitor as an agent for the seller or a stakeholder If the buyer fails to complete, then the seller by forfeit or keep the deposit Where the deposit is held by the Solicitor, interest is payable under the SRA Accounts rules

Answer 27

Means that the seller cannot pay over the deposit until completion However, the SC allows the seller to use the deposit as a deposit on a related purchase of a house for the residence of the seller provided it is held on the same terms (i.e. as stakeholder) Interest on the deposit will be payable to the seller on completion

Answer 28

Means that the deposit can be released to the seller on exchange of contracts (i.e. before completion) and be used by the seller for any purpose. A special condition will be required to state that the seller's solicitor is to hold the deposit as agent Should the transaction fail to complete, there is a risk that the seller may fail to return the deposit

Answer 29

Risk of damage and destruction passes to the buyer on exchange (under SC and SCPC) The buyer should insure the property from the date of exchange of contracts Seller is under no obligation to insure the property from exchange (unless required by their mortgage lender, lease, or special condition in the contract of sale)

Answer 30

The contract should be drafted to protect the buyer against the possibility of the buyer's insurer reducing the pay-out because the seller has also insured the property. The purchase price would be reduced by the relevant sum.

Answer 31

Residential property transaction = No VAT New build residential property = Zero rated 0% Sale of new commercial property = standard (20%) Sale of old commercial property (more than 3yrs old) = exempt, subject to the option to tax

Answer 32

Allow the person to convert an exempt supply into taxable one thereby allowing him to recover any input tax incurred.

Answer 33

Contractual provisions must be included to state whether the buyer will have to pay VAT in addition to the purchase price.

Answer 34

Certificate of title will be given to the lender (signed and dated by the buyer's solicitor) immediately before completion of the purchase and the drawdown of the loan monies. Confirms to the lender that the property is proper security for the loan and has 'good marketable title'.

Answer 35

When one solicitor holds both contracts. This solicitor holding both signed parts of the contract undertakes that they will, that same day, send their client's signed part of the contract to the other side by 1st class post, DX, or by hand, duly dated

Answer 36

When each Solicitor holds their client's contract. Each Solicitor will that same day, send the signed part of the contract that they are holding to the other side by 1st class post, DX, or by hand, duly dated.

Answer 37

For a chain of transactions in residential properties, where each Solicitor holds their client's contract and exchange is by telephone and they synchronise the exchanges.

Answer 38

Date, time, and the parties involved in the exchange of contracts Formula used (and any variations) and the undertakings given have been complied with and discharged Record that the deposit has been paid as per the Solicitors Accounts Rules

Answer 39

Neither party may withdraw without incurring breach of contract The propety is now at the buyer's risk and therefore it should be insured from this moment Solicitor should notify the client, estate agent, lender and insurer exchange has taken place

Answer 40

If there is a long interval between exchange and completion, a dispute arises between the buyer and the seller, doubts as to the sellers good faith, completion is delayed beyond the agreed date. Unreg land - Class C (iv) land charge (an estate contract ) Reg land - Notice on the register as a minor interest in land

Answer 41

Transfer document is usually prepared by the buyer's solicitor (unless seller's sol has included one in the contract bundle)

Answer 42

Buyer should send to the seller at least 12 working days before completion Seller must reply with any queries within four working days Transfer must be a deed In reg land, must comply with HMLR TR1 Unreg land, no prescribed format, buyer and seller must agree the wording to reflect the terms of the contract Transfer must always be signed by the seller Buyer signs where there is a covenant or declaration on the buyer's behalf Any plans must be attached to the transfer or conveyance and signed

Answer 43

Signed by the individual In the presence of a witness who attests the signature Be delivered as a deed

Answer 44

Affixing its common seal, by the signatures of: Two authorised signatories (two directors or a director and the secretary of the company) or a director of the company attested by a witness.

Answer 45

A party to a deed cannot be an attesting witness Signatory's spouse, co-habitee or civil partner can be a witness Best practice, a relative who benefits from the deed should be avoided given the purpose of a witness A company cannot attest to the execution of a document, must be an individual Generally acceptable for an employee or director of a company to witness that company's signing A solicitor, or other person advising on the matter can be a witness.

Answer 46

Must be completed as close as possible to the completion date to ensure that information obtained from pre-exchange searches remains correct and identify any changes and check that the seller has not further encumbered the title.

Answer 47

Immediately ascertain what it relates to and contact the seller's solicitor to seek an undertaking that it will be removed prior to completion.

Answer 48

If the buyer/seller is a company, must check that the company exists and has the power, capacity and authority to enter into the transaction.

Answer 49

If the buyer/seller is a company, a telephone search at the Registry of Winding Up Petitions will reveal any recent winding up petitions, administration orders, or other insolvency proceedings filed against the company

Answer 50

When acting for a lender, search against the name of the individual buyer/borrower and any guarantors of the mortgage being entered into in connection with the property (Form K16)

Answer 51

Required if more than three months has passed since exchange as in general if older than 3 months they should not be relied upon. A local search does not confer a priority period.

Answer 52

Checks no adverse entries have been made since the original search Updated search ensures that the priority period (15 working days) covers the completion of the transaction as the priority period of the previous search may have expired by the time the parties are in a position to complete.

Answer 53

Alerts applicant to any alternations to the register, unexpired priority searches and pending third party applications made since obtaining official copies in the pre-exchange searches. Confers a priority period of 30 working days from the date of the certificate. Buyer/lender will be protected against any subsequent entries which may be placed on the register after the date of the search but before the buyer is registered as the owner. Must be completed at least 5 days before completion. If the property is being purchased with a mortgage, the search should be conducted in the name of the lender to protect both buyer and lender.

Answer 54

1) Pre-completion searches 2) Completion statement - check amount due to seller on completion, check in accordance with terms of the contract, check that seller's solicitor has provided reciepts for any payments that are being apportioned. Buyers Sol then prepares completion statement for the buyer, includes monies due to seller including SDLT, HMLR fees, Disbursements, and Solicitor's fees. If purchase is being funded by a loan, request the funds from the lender, and any balance from the client. 3) Raise requisitions on the title 4) Draft transfer- Once agreed, prepare engrossments, send one duplicate part to seller's solicitor and arrange execution of the other duplicate part by the buyer 5) Execution of new mortgage deed 6)Undertakings

Answer 55

An undertaking given by the buyer's solicitor to the outgoing lender, to hold completion monies to lender's order, where a transaction likely to complete outside of banking hourrs.

Answer 56

1) Request redemption statement from the current lender with the figure required to redeem the mortgage on the contractual completion date, together with daily rate incase completion is delayed 2) Completion statement - prepare the completion statement for the amounts due on completion to send to buyer's sol 3) Reply to recquisitions on the title- SCS limits buyer's ability to raise requisitions on title to 6 workings days of becoming aware of a title issue 4) Approve transfer that buyer's sol should have provided for approval 5) Discharge existing mortgage deed - arrange for current mortgage of outgoing lender to be discharged 6) Undertakings

Answer 57

1) Undertaking to seller's lender that they are holding form DS1 and following completion they will transfer completion monies to the lender 2) Undertaking to the buyer's solicitors that they are holding the release documents executed by the lender and on reciept of completion monies they will hold them to the order of the buyer's solicitor until completion.

Answer 58

Completion in person, or completion by post

Answer 59

Parties usually attend offices of the seller's solicitor Buyer's sol will arrange for completion monies to be sent electronically or bankers draft, and if unregistered, will check title documents once again against previous title disclosure. Seller's sol will hold transfer deeds, form DS1, other relevant docs, keys and release them on reciept of completion monies

Answer 60

Seller's Solicitor will act as agent for the buyer's Solicitor at completion and will give undertakings to carry out the completion procedure. Buyer's sol will send funds to seller's sol on or day before completion Will send instructions as to the documents to be examined, memoranda to be endorsed, undertakings to be given, deeds and documents to be sent to buyers sol after completion, any consents/certificates to deal with restrictions at HMLR Sellers Sol on reciept of completion monies will complete the transaction. Undertakes to comply will any agreed completion arrangements and notify buyer's sol that completion has occured. Docs will be sent by 1st class post ot DX. usually attend offices of the seller's solicitor Buyer's sol will arrange for completion monies to be sent electronically or bankers draft, and if unregistered, will check title documents once again against previous title disclosure. Seller's sol will hold transfer deeds, form DS1, other relevant docs, keys and release them on reciept of completion monies

Answer 61

Legal title will pass when buyer is registered at HMLR. Must register buyer as the new owner during the 30 day priority period.

Answer 62

Legal title passes on completion.

Answer 63

Buyer has to pay SDLT (England) within 14 days - SDLT5 Form issued as proof of payment Buyer to pay LTT (Wales) within 30 days - Welsh Authority will issue WRA certificate as proof of payment

Answer 64

Buyer pays SDLT or LTT Must complete within 30 day priority period of HMLR form AP1 to have buyer registered as registered proprieter of property, lender registereed as the holder of the new mortgage over the property, apply for the seller's mortgage to be removed where form DS1 has been completed and with form AP01 send the following documents: Certified copy of transfer (TR1) HMLR fee SDLT5 form/WRA certificate Form DS1 Form DL setting out any overriding interests that burden the title

Answer 65

Buyer pays SDLT or LTT Complete within two months of completion of transaction HMLR Form FR1 for first registration of title (freehold or leasehold) and Form DI (list of documents that accompany a first registration application). Therefore, must include: all the documents which formed the evidence of title supplied to the buyer's solicitor by the seller's solicitor, and any new mortgage documents and any overriding interests that burden the title which can then be entered on to the register and cease to be overriding.

Answer 66

The mortgage must be registered at companies house within 21 days of creation.

Answer 67

Common law damages Contractual compensation Notice to complete Rescission

Answer 68

Failure to complete a contract for sale on the contractual completion date gives the innocent party a claim for damages. The innocent party cannot unilaterally terminate the contract unless the time for completion has been made 'of the essence'. Damages for breach of contract for the sale of land will be assessed under the contractual principles established in Hadley v Baxendale. Under SC and SCPC, credit towards damages must be given for any contractual compensation payable for delayed completion.

Answer 69

Contractual compensation may be payable if there is a delay in completion beyond the time and date specified in the contract. Pursuanct to the SC, either party may be held liable for compensation. Pursuant to the SCPC, only the buyer is liable for compensation. The compensation will be calculated at the contract rate (which is the rate of interest payable if a party is late in completing).

Answer 70

1) Purchase price 2) Minus deposit paid 3) Multiply by contract rate (%) (specified in the contract) = annual rate 4) Annual rate divided by 365 days = daily rate 5) Daily rate x (No. of days in default) = Compensation payable.

Answer 71

SC and SCPC say where completion has been delayed beyond the agreed completion date, the party who is ready to complete may serve a notice to complete on the defaulting party. Service of a notice to complete makes time of the essece and gives the other party 10 working days to complete the transaction.

Answer 72

If the defaulting party is the buyer, the seller can rescind the contract and keep the deposit If the defaulting party is the seller, the seller must return the deposit to the buyer and the buyer may claim damages for any loss suffered.

Answer 73

SC and SCPC says that the right to rescind is avaliable for: Misrepresentation Where a license is not forthcoming in a leasehold transaction Where either party has failed to comply with a notice to complete Recission will result in the return of deposit monies paid (with any accrued interest), return of all documents and the cancellation of any registration of the contract.

Answer 74

The grant of a right of exclusive possession of land for an agreed period of time Provides the holder of the estate rights to possession and use of land (not ownership) A contractual relationship between the party that grants the lease (Landlord or Lessor) and the holder of the lease (tenant or lessee).

Answer 75

1) Drafting the lease (landlord sol) and tenant's Sol will make porposed amendments until the lease is agreed. 2) Deduction and investigation of title 3) Pre-contract enquiries and searches 4) Pre-completion formalities 5) Completion and post-completion steps

Answer 76

Contract between two or more parties to enter into a lease The agreement will place contractual obligation on the respective parties to enter into the lease, either on a fixed date in the future, or following the satisfaction of condition set out in the agreement.

Answer 77

Tenant will want to make sure that the landlord is permitted to grant the lease. If there is a mortgage over the interest which the leasehold title is to be granted, then the lender's consent must be obtained. If the lease to be granted is an underlease, then the alienation covenant in the headlease must be reviewed to ensure underletting is permitted. On the grant of a lease of more than 7 years, the tenant will require the landlord to deduce the freehold title to enable the tenant to obtain registration with an absolute leasehold title at HMLRT. On the grant of a sub-lease of more than 7 years, the tenant will require the landlord to deduce the head-lease and freehold title to enable the tenant to obtain registration with an absolute leasehold title at HMLR. If the headlease is registered with absolute title, there is no need to see the freehold title.

Answer 78

The same searches before exchange and completion will be taken as for the purchase of a freehold title. i.e, survery of property, enquiries of the seller, local searches, water and drainage, coal authority, companies house etc.

Answer 79

A lease is an interest in land and must be signed as a deed to comply with s.52 of the Law of Property Act 1925. The lease will be prepared in two identical parties: Part I - the lease is signed by the landlord and given to the tenant Part II - The counterpart is signed by the tenant and given to the landlord.

Answer 80

1) the tenant will pay rent in advance for the period from the completion date to the next rent payment date 2) Submit a land transaction return for the payment of SDLT (England) and LTT (Wales) 3) A lease over 7 years or less but more than three years may be noted voluntarily at HMLR 4) A lease for less than 3 years cannot be noted.

Answer 81

1) Deduction and Investigation of title 2) Pre-contract enquiries and seaches (same as for purchase of freehold title) 3) Landlord's consent 4) Deed of assignment and covenants for title 5) Pre-completion formalities 6) Authortised Guarantee Agreement 7) Completion and Post-completion steps

Answer 82

Assignee's solicitor will report to the client on the the terms of the lease as it is already in existance and the subject of the sale Any superior freehold title interest should be checked as part of the deduction of title of the lease. If the lease is registered at HMLR with aboslute title, there is no need to investigate the freehold title.

Answer 83

The same searches before exchange and completion will be taken as for the purchase of a freehold title. i.e, survery of property, enquiries of the seller, local searches, water and drainage, coal authority, companies house etc.

Answer 84

An assignment of a lease is the transfer for the legal title to an estate in land and therefore it must be done by deed (s.52 Law of Property Act 1925) If the lease is registered, TR1 form needed - executed as a deed and therefore acts as the transfer deed If the lease is unregistered, and the lease being asssigned exceeds 7 years, the assignment will lead to a compulsory registration (requires completion of TR1). A deed of assignment format will be used where the lease is for seven years or less as first registration is not triggered by its assignment

Answer 85

Covenants for title for 'full title guarantee' or 'limited title guarantee' implies a set of covenants into the disposal instrument. In a lease, this would imply a covenant that the seller has complied with the tenant's covenants in the lease, including repair Therefore a sellers solicitor should modify the implied covenants of title not to imply that the repair and decoration covenants in the lease have been performed.

Answer 86

Assignment of a lease is the transfer of an interest in land and must be signed as a deed to comply with s.52 Law and Proprty Act Registered leases require a pre-completion search of the Land Register (OS1) to gain a 30 working day priority period. Unregistered leases require conducting a Land Charges search against the name of the assignor to gain a 15 working day prioroty period (K15) The Landlord's licence to assign (permitting the assignment) will be prepared in two identical parts Part I - The licence is signed by the landlord and given to the tenant Part II - The counterpart is signed by the tenant and given to the landlord Prepare the transfer deed (form TR1 or deed of assignment) between the assignor (outgoing tenant) and assignee (incoming tenant) Prepare Authorised Guarantee Agreement if being given

Answer 87

Where a lease is granted after 1 January 1996 and the lease contains a qualified covenant against assignment, and the current tenant asks for permission to assign, the landlord may ask the current tenant to enter into an authorised guarantee agreement whether or not it is reasonable to do so. In the absence of a covenant against assignment, the landlord can ask for an authorised guarantee agreement only if it is reasonable to do so. The assignor therefore guarantees that the new tenant (i.e. the assignee) will perform the covenants and the guarantee would only last as long as the asignee remains the owner of the lease.

Answer 88

Submit a land transaction return for the payment of SDLT (England) or LTT (Wales) The assignment of a registered lease must be registered at HMLR The assignment of an unregistered lease which has over seven years to run at the date of assignment will trigger first registration Notice of asssignment of lease must be served on the landlord.

Answer 89

It is the landlord's consent to the assignment of the lease by the assignor (outgoing tenant) to the assignee (incoming tenant). Failure to obtain landlord's consent could result in breach opf the alienation covenants in the lease and forfeiture A draft of the licence to assign will be produced by the landlord's solicitor.

Answer 90

Landlord to specify that the assignee gives the landlord a direct covenant to perform the tenant's covenant's under the lease for the remainder of the term of the lease. This will create privity of contract between the landlord and assignee.

Answer 91

Landlord will specify conditions to be met, including: A direct covenant from the assignee to perform the tenant's covenants under the lease (while it is a tenant only); and/or The giving of an Authorised Guarantee Agreement by the assignor guaranteeing the performance of the tenant's covenants by the assignee.

Answer 92

1) Landlord's express consent to permit the assiignment of the lease from assignor to assignee 2) specified provisions depending on whether lease was before or after 1 January 1996 3) A covenant to pay the landlord's reasonable costs for preparing the licence to assign

Answer 93

Leases that are granted out of registered land and which are compulsorily registerable Leases that are required to be completed by registration following an event that has triggered the first registration of the superior estate

Answer 94

LR1: Date of the lease LR2: Title number(s) LR3: Parties to this lease LR4: Property LR5:Prescribed statements LR6: Term for which the property is leased LR7:Premium LR8 Prohibitions or restrictions on disposing of the lease LR9: Rights of acquisition LR10: Restrictive covenants given by the landlord in respect of land other than the Property LR11: Easements LR12: Estate rent charge burdening the property LR13: Application for standard form of restriction LR14: Declaration of trust where there is more than one person comprising the tenant

Answer 95

Usually covenant that the tenant will keep the demised premises in repair Includes obligation to put the property in repair if it is in disrepear at the start of the lease When drafting the lease of part, care should be taken to ensure that there are no gaps or overlaps in the parties responsibility for repair In the lease of whole of the building the term full repairing lease indicates that the tenant has full responsbility for the repair of the whole property

Answer 96

1) Directly responsible for repairing the demises premises; and 2) Indirectly responsible for the cost (or proportion of the cost) of repairs to the structure, exterior and common parts of the property through service charge.

Answer 97

Common practice that the landlord takes out the insurance with the cost being passed to the tenant (insurance rent). Pursuant to such a covenant: 1) The tenant will pay insurance rent 2) The landlord will insure the property for the full reinstatement value and the loss of annual rent where the tenant is unable to use the building 3) The landlord will use the insurance proceeds to reinstate the property (if possible).

Answer 98

The landlord will not permit the tenant to take out their own insurance of their demised premises, but will structure the lease so that the landlord will: 1) Insure at the tenant's expense (for the full reinstatement value and loss of annual rent) 2) Make all insurance claims 3) Use the insurance monies received to repair and reinstate the building and the loss of annual rent

Answer 99

1) Any impractical issues about each tenant trying to individually reinstate and rebuild their particular unit while the landlord tries to do the same with the external and structural parts 2) With two or more insurers for claims arising from the same event, damage and building, it raises issues of double insurance and contributions which could result in claims being refused or delayed 3) If several parties insure parts of a building, there will be multiple and possibly inconsistent applications/disclosures which could result in insurance claims being refused or delayed.

Answer 100

The tenant may proceed with its alterations ubject to an obligation not to commit waste or go beyond the boundary of the demised premises.

Answer 101

1) Prohibit alterations to the exterior and/or structure of the premises and/or outside of the demise 2) Allow non-structural alterations to the interior 3) Restrict the tenants ability to alter the service media (i.e. electricity supply) serving the premises

Answer 102

May class as 'improvements' even if alterations are restricted in the lease if they satisfy the following: 1) Where landlords consent is required for 'improvements', then that consent is not to be reasonably witheld (s.19 (2)) 2) In certain situations, the tenant can: a) carry out improvements even if forbidden to do so by the lease (s.3) b) obtain compensation at the end of the term for improvements that have been carried out (s.1)

Answer 103

Does not apply to works which are repairs under the tenants repairing covenant. It applies to improvements which add value or usefulness of the property to the tenant (but may still result in a reduction in value of the landlord's revisionary interest)

Answer 104

1) the tenant will have regard to the landlord's requirements when carrying out such works 2) Notify the landlord of any alterations carried out including provision of any plans

Answer 105

The amount of rent payable The dates on which the rent is to be paid If the rent is paid in advance or in arrear The date from which rent is payable The calculation of the first rent The rent payment method The payment of VAT on the rent If the tenant can make any deductions or withhold it where the tenant has a claim against the landlord Any provisions for reviewing or otherwise charging the rent, such as open market review claud or upward only rent review.

Answer 106

the landlord may sue for rent and interest on unpaid sums or damages or take steps to forfeit the lease or exercise the procedure for commercial rent arrears recovery.

Answer 107

Alienation is the disposal of an interest in leasehold property. It includes: Assignment Underletting Charging of an interest to a lender Parting with posession

Answer 108

Commercial leases often contain a prohibition on the tenant parting with possession and sharing occupation. A lease may contain absolute prohibition or qualified prohibition i.e. need consent from the landlord and it is presumed that this consent cannot unreasonably be withheld.

Answer 109

The period of time for which a lease is granted. A fixed term lease is fixed for a specific period of time given to the tenant at the end of which the lease expires (no need to serve a notice to quit)

Answer 110

Granted for a period which will then renew from one period to the next until determined by a notice to quit.

Answer 111

1) A lease of less than 6 months generally cannot benefit from the production given by the landlord and tenant act 1964 (but those that do satisfy the exception criteria may be able to extend and renew their lease such as a provision for extending the term beyond six months or where the tenant has been in occupation for more than 12 months) 2) A lease granted for a term of 7 years or less do not generally require substantive registration at the HMLR.

Answer 112

Aims to improve the quality and fairness of negotiations on business lease terms and to promote the issue of comprehensive heads of terms to make the legal drafting process more efficient. RICS members must comply with certain madatory requirements and only depart in exceptional circumstances Landlords not regulated by RICS are not bound by the LBP unless provisions are incorporated into the lease.

Answer 113

Drafting the lease Purpose of an agreement for lease Deduction of title Pre-contract enquiries and searches Pre-completion formalities Completion and post-completion steps

Answer 114

Action in debt Forfeiture Commercial Rent Arrears Recovery Pursue guarantors and/or rent deposit Specific performance Damages Self-help/Jervis v Harris clause

Answer 115

The landlord may sue the current tenant for non-payment of rent, a former tenant (using privity of contract) or rely on the authorised guarantee agreement This action does not bring this lease to an end.

Answer 116

The right to re-enter and it is exercised against the tenant in possession The landlord takes physical possession of the property and prematurely terminates the lease The lease must contain an express forfeiture clause allowing for the landlord to terminate the lease for non-payment of rent or other breaches of covenant The landlord can forfeit by peaceful re-entry or a court order for possession

Answer 117

The landlord enters the premises and seizes the current tenant's goods and sells them to pay any arrears of rent This action does not bring the lease to an end.

Answer 118

A guarantee or rent deposit may be requested by the landlord where there are concerns about a financially weak tenant or a tenant with a relatively new credit history

Answer 119

Will provide that a guarantor will guarantee the non-payment of rent and any other sums due under the other leasehold covenants by the tenant for which the guarantor will now be held liable in the event by the default by the tenant. A guarantee gives the landlord a direct contractual claim against the guarantor.

Answer 120

A cash deposit by the tenant as security for the payment of rent and the performance of the tenant's covenants under the lease. The deposit will be held according to the terms set out in the rent deposit deed and provide the circumstances under which the landlord may draw upon it for a breach by the tenant without the need for court action.

Answer 121

A discretionary remedy. Only avaliable to ensure a tenant complies with a positve covenant provided no other remedies (such as damages) are avaliable or appropriate

Answer 122

s.18(1) LTA 1927 - this limits the damages that a landlord may recover for breach of the tenant's covenants to the dimunition in the value of the landlord's reversion caused by the breach s.1 Leasehold property (Repairs) Act 1938 - This is only relevant where the lease was granted for a term of at least 7 years and has at least 3 years left to run

Answer 123

May be protracted and incur significant litigation costs, which may not be recoverable Rather than pursue a damages claim for breach of repair, landlords instead seek to rely on self-help (Jervis v Harris clause) under the lease

Answer 124

Provided the lease has a contractual self-help remedy clause (also known as a Jervis v Harris clause), the landlord will be entitled to do the following: 1) Enter the property 2) Carry out any repair works 3) Recover the cost from the tenant The landlord can recover the costs of doing works from the tenant as a debt and not as damages

Answer 125

Effluxion of time Notice to quit Surrender Merger

Answer 126

This is where the lease ends as a term has come to an end No notice required

Answer 127

The tenant yields the lease and the landlord accepts the surrender Usually documented in a deed of surrender

Answer 128

This is where the tenant acquires the freehold estate and therefore the lease merges into the revisionary title.

Answer 129

Gives a business tenant the right to stay in the property aftyer the expiry of the contractual term and the right to apply for a new tenancy Any such application by the tenant can only be denied on limited statutory grounds

Answer 130

Tenant must have a tenancy and occupy the property for business purposes under a lease which has not been excluded from protection and provided the parties have not contracted out of the Landlord and Tenant Act 1954

Answer 131

a) Tenant has breached its repairing obligations b) Tenant's persistent delay in paying rent c) Tenant's substantial breach of other obligations d) Landlord has offered suitable alternative accomodation e) Tenancy is an underletting of part and the landlord needs possession for letting or disposing of the property as a whole f) Landlord intends to demolish or reconstruct the property and needs possession g) Landlord intends to occupy the holding for its own business or its residence

Answer 132

A protected tenant who wants to renew the tenancy after the contract expiry date must serve a s.26 request for a new tenant on the landlord The tenant should make an application to the court before the date for commencement of the new tenancy stated in the s.26 request or the termination date started in the s.25 notice (termination by the landlord) If the landlord has not served a s.25 notice or a valid counter notice to the s.26 request, the older tenancy will continue.

Answer 133

A protected tenant who wants to terminate the lease on the contractual expiry date must serve a s.27 notice on the landlord giving 3 months prior notice or cease to occupy the property at the end of the lease.

Answer 134

A protected tenant who wants to terminate the lease after the contractual expiry date must serve a s.27 notice on the landlord giving 3 months notice or agree a surrender of the lease with the landlord.

Answer 135

Served by a landlord who wishes to regain possession The notice must be served on the tenant terminating a lease on or after the contractual expiry date on s.30 grounds The notice myust be given not less than 6 months or more than 12 months before the date specified in the notice for termination of the tenancy In addition the specified date cannot be before the tenancy would have expired at common law.

Answer 136

A landlord who has been served a s.26 request from a protected tenant and who opposes renewal must serve a counter-notice on the tenant within 2 months of the s.26 request stating the s.30 grounds of opposition to the renewal request.

Answer 137

Either party can apply to the court for interim rent while renewal proceedings are continuing The terms of the new lease are usually agreed between the parties If the new lease is set by the court, the renewal lease will be on similar terms and conditions as the old lease specifying: 1) property demised 2) duration (not exceeding 15 years) 3) Rent (open market rent as at the date of renewal) 4) Any other reasonable terms

Answer 138

The landlord will have to pay compensation to the tenant if the new tenancy is refused unless the refusal is one of the established grounds where the tenant is at fault (a,b,or c) or where alternative accomodation is provided (d)

Answer 139

Defined by s.55, TCPA 1990 as: 1) 'The carrying out of building, engineering, mining or other operations in, on, over, or under land'; and 2) 'The making of any material change in the use of any building or other land'.

Answer 140

Maintenance works to the exterior of buildings Internal works which do not materially affect the appearance of the exterior The use of building or land within the curtillage of a dwelling house (i.e. the land immediately surrounding the house including the garden area) for any purpose incidental to the use of the dwelling house. The change of use within the same class as specified by the town and country planning (use classes) order 1987 A development falls within Town and Country planning (General permitted development) (England) Order 2015 or, if the property is in Wales, Town and Country Planning (General permitted development) Order 1995 Development specified in a local development order Development specified in neighbourhood development order

Answer 141

1) Development within the curtillage of a dwelling house 2) Minor operations such as the putting up of fences and gates 3) Changes of use (subject to certain exclusions and conditions) 4) The extension or alteration of an office building, shop, financial or profession services establishment, industrial unit or warehouse.

Answer 142

Applies to all types of building Building consent regulation is needed for 'building works' separate to planning consent

Answer 143

1) The erection or extension of a building 2) The installation or extension of a service or fitting that is controlled under the building regulations 3) The material alteration of a building or controlled service or fitting Work required where there is a material change of use of the whole building 4) Installing isulation into a cavity wall 5) Underpinning a building

Answer 144

Make application to the Local Authority for building regs consent Any work will be inspected by a building control officer A certificate of compliance will be issued if the work is compliant The

Answer 145

The local authority has the power to prosecute within two years of the work being completed The local authority can issue an enforcement notice requiring work be altered or removed within one year of the work being completed

Answer 146

Detailed of any building regulations consents and certificates granted and if indemnity insurance is necessary to mitigate for any risk of non-compliance.

Answer 147

Four years from the date that the operation was substantially completed

Answer 148

Four years from the change of use commenced

Answer 149

Enforcement notice Stop Notice Temporary stop notice Breach of condition notice Injunction

Answer 150

A notice to remedy a planning breach with a wide range of steps to be taken within a specified period. An enforcement notice does not by itself stop the breach of planning control from continuing. If this is required, the local Planning Authority must consider serving a stop notice or a breach of condition notice

Answer 151

A notice to stop activity (must be served with an enforcement notice)

Answer 152

A notice to stop activity while it considers further action

Answer 153

Requires the recipient to remedy the breach of planning condition within a specified time period.

Answer 154

An application to the court for an order that an unlawful act should not take place or be undone. The power of the court to grant the injunction is discretionary.

Property Practice Flashcards

(185 cards)