Commercial Law Updates
Subletting
AUGUST 2011
"My landlord would not allow me to sublet at a rent below the market level. I agreed a market rent, but the landlord is now concerned about the financial viability of the subtenant. Can he keep moving the goal posts?"
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Overage
AUGUST 2011
"I own a commercial building that a developer wants to buy but will only pay the current use value. The land will be worth four times as much when it receives planning. Would an overage clause be a good idea?"
The mo ...
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Rubbish
AUGUST 2010
QUESTION: “I own a parade of shops. One of the retailers leaves its rubbish outside its store on a communal forecourt. A customer has tripped over some of the scattered rubbish and is claiming damages for injuries. Am I liable? ...
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Security of Tenure
AUGUST 2010
QUESTION: “I am granting a commercial lease and do not want to give security of tenure to my prospective tenant. What type of declaration do I need before completing the lease?”
The procedure for contracting out of t ...
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Superior Lease Forfeiture
AUGUST 2010
QUESTION: “We have a 99 year of a property. Our freeholder has granted a lease to a third party who appears to be in our immediate landlord. What happens to our lease if the freeholder forfeits that ‘superior’ lease?”
< ...
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Service Charges
AUGUST 2010
? SERVICE TENSION – Landlords of residential properties may be left subsequently out of pocket if they do not follow the statutory provisions for recovery of service charges.
THE CASE – A tenant challenged her liabil ...
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Collateral Warranty
AUGUST 2010
QUESTION: “A defect has appeared in a property I recently bought. At time of buying, I received a collateral warranty from the contractor, but it has since gone bust. I understand the defect was caused by a subcontractor. Wh ...
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Insurance and Repairs
AUGUST 2010
QUESTION: “I am a tenant of office premises that have been damaged by a risk against which the landlord has not insured. The landlord says I must repair the damage. Is this right?”
You NEED to check the terms of th ...
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Fire Certificate
August 2010
QUESTION: “I understand there have been changes to fire regulations for tenants. I have a fire certificate, but is there anything else I need to do?”
Under the previous legislation if a fire certificate had been iss ...
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Property development rights for loft conversions, rear and roof extensions and driveways
JUNE 2010
The Town and Country Planning (General Permitted Development) (Amendment) (No. 2) (England) Order 2008 came into force on 1 October 2008 and made changes to the planning regime governing development of houses in England.
...
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Indemnity Clauses
JUNE 2010
Indemnities are often described as "standard" provisions as though that automatically makes them reasonable. So what is an indemnity?
An indemnity is a promise by one party (party A) to reimburse another party (party ...
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Responding to S.25 Notice
JUNE 2010
QUESTION: I received a section 25 notice from my landlord three months ago and have still not dealt with it. Is there anything I can do to put it right?
Don’t panic. To be a valid notice under section 25 of the Landlo ...
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Service Charge Reserves
QUESTION: I run a shopping centre with a service charge. The leases allow for a reserve fund. A lease has just ended and the tenant wants its share of the reserve fund back. What do I do?
Firstly, I would investigate what exactly the lea ...
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Parent Company Guarantee
QUESTION: I am a landlord negotiating to let my office building to a new company backed by a parent company guarantee. Does this give me the same covenant strength as if the parent company were the tenant?
There is some doubt, leases with ...
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Equity Release
QUESTION: Is equity release the answer to help raise funds for senior citizens who own a largish property but are short of cash. What is a home income plan and should this be considered and what are the facts?
There are two types of home i ...
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VAT And Reverse Premiums
QUESTION: Is a reverse premium for the surrender of a lease or an inducement to enter into a lease subject to payment of VAT?
Revenue and Customs’ guidance says that if a landlord accepts the surrender of a lease in return for payment from ...
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Mezzanines
QUESTION: Do I need planning permission to install a mezzanine?
The installation of a mezzanine does not require planning permission unless there is a ‘planning condition’ that prevents this. Under section 49 of the Planning and Compulsory ...
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Group Companies
QUESTION: I am the landlord of a retail property that I let to a substantial company that has ceased trading and has no assets. A group company occupies the premises and another pays rent. Am I obliged to accept the original company as tenant on leas ...
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Charity Tenant
QUESTION: The 42-year lease on my restaurant/pub is coming to an end. The tenants refitted the building. Should the new rent disregard the original fit–out, and is the lease outside the 1954 act because I have charitable status?
Charitable ...
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Fitting Out
QUESTION: My client is entering into a new lease, and the landlord will be contributing to their fit-out costs. The landlord says these costs come under the construction industry scheme (CIS). Is this correct?
In most cases this will no lo ...
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Compliance With Break Clauses
QUESTION: My company needs to relocate. Our lease has a tenant-only conditional break, effective in 18 months’ time. How can we ensure we are compliant of the break?
This is critical when dealing with a lease break. Every lease is differen ...
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Repairing Covenant
QUESTION: What is meant by a covenant ‘well and substantially to repair’?
A covenant ‘well and substantially to repair’ does not require the tenant to put the property into perfect repair or into pristine condition.
In Riverside ...
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Endeavours
QUESTION: What is the difference between the contractual terms ‘reasonable endeavours’ and ‘best endeavours’?
It is not unusual to come across an obligation to use ‘best’ or ‘reasonable’ endeavours, but it is difficult to pinpoint how thes ...
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Delayed Rent Review
QUESTION: I acquired my first restaurant a year ago. At the time there was a rent review holding over from the previous tenant but I have heard nothing, Can this rent review be backdated or has the landlord lost its rights?
Not necessaril ...
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LLP Tenant
QUESTION: My tenant is converting from a partnership into a limited liability partnership. I have been asked to consent to the assignment of the lease from the partnership to the LLP. What should I do?
Consider what, if any, obligations yo ...
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Time In Rent Reviews
QUESTION: I occupy offices and the Landlord has written that it wants to action a rent review from 2004. Time is not of the essence. Is it reasonable to demand an uplift in rent so long after the review date?
A tenant often considers that ...
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Renewal of Sublease
QUESTION: My subtenant is vacating premises just three days before my own lease expires. Am I entitled to renew my lease even though I am not in occupation?
You do not need to be in physical occupation of premises to preserve your statutor ...
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Accuracy Of Plans
QUESTION: I have been told that details of any new lease exceeding seven years must now be recorded with the Land Registry. I have also been asked to provide better plans than were in the original documentation. Why is this?
Since October ...
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Contracting Out
QUESTION: I am a landlord, and a lease which is contracted out of the security of tenure provisions has expired. I want to charge rent while negotiating a new lease but not create a protected tenancy. How can I do this?
It is often the cas ...
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Islamic Compliance
QUESTION: How can I ensure my property arrangements are complaint with Islamic Law?
Muslims are prohibited from taking standard mortgages to help them buy a property because they involve paying interest, a concept not compliant with Sharia ...
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Rent During Renewal
QUESTION: I have started negotiations with my landlord to renew my lease, but the premises are over-rented. Can I get the rent reduced while these negotiations are ongoing?
If you cannot reach agreement with your landlord, you can make an ...
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Insurance Of Tenants' Works
QUESTION: I have appointed a contractor to make changes to the layout of the offices where we are tenants. Are we responsible for insurance of the works or is this the landlord’s responsibility?
In most cases, cover falls within the basic ...
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Pension Schemes
Question: Does ownership of a property in a self-invested personal pension create difficulties in the event that I wish to retire or if I die before retirement?
Careful planning should ensure that purchase of a commercial property within a ...
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Fire Certificates
QUESTION: Is it true that I no longer need a fire certificate for my building?
No. A fire certificate is still required. However, on 1 April 2006 the Regulatory Reform (Fire Safety) Regulations come into force and fire certificates will be ...
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Green Leases
QUESTION: How can I ensure my tenants do not undermine my building’s green credentials? I have heard about green leases. What do these entail?
As a formal agreement, a lease requires professional legal advice on its compilation.
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Subletting
Question: I recently bought a buy-to-let flat. The block’s freehold is owned by the leaseholders. The lease states that I cannot let the flat without the consent of the landlord company. I don’t get on with the secretary of the leaseholders’ associat ...
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Options And SDLT
Question: I have just entered into an option agreement for the purchase of land. Do I have to pay any Stamp Duty Land Tax?
Many developers are still unsure about the rules concerning Stamp Duty Land Tax (SDLT) and option agreements. It is ...
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Lease Extension
I need to sell my maisonette, which has a 65 year lease. I have a buyer, but the lender will not provide funds until the lease has been extended. The freeholder advised me to get an independent valuation to increase the lease by 90 years and submit t ...
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User Clause
Question: I occupy a property as a newsagent, but the ‘user clause’ allows me to use it as a takeaway. During a rent review will I be charged based on takeaway, which on my parade would attract a higher rent?
The user clause in your lease ...
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Public Access To Land Registry
Question: I have heard that anyone can get a copy of the mortgage of my house or lease of my business premises from the Land Registry, but this cannot be right can it?
A title property at the Land Registry will describe the property, ident ...
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Consent To Assignment
Question: My tenant wants to sublet a company of poor financial status. Do I have to consent?
Not necessarily. A landlord may refuse consent if it has genuine concerns about the effect that a weak subtenant might have on the value of its ...
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Buying Commercial Property - Ten Top Tips
1. You need to understand yield and what happens to rents and yields since this determines how and when you should decide when to sell. In considering yields you need to know whether you want income or capital growth.
2. Always use an app ...
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Grazing Rights
Question: I am buying a property where part of the garden is being used by a neighbouring landowner for grazing animals. Is it possible to easily terminate any agreement that may be in place?
It depends on the terms of the agreement, but c ...
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