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Landlord and tenant – commercial

Surrender – consents?

A recent case involved a surrender of a lease and sub-lease. But, L had charged his freehold and the consent of L’s mortgagee was not obtained. The end result was that the surrender was ineffective. Thus, T (and its guarantor) remained liable.

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Lease or licence – co-working

This is a perennial question: how do you tell a lease from a licence? The starting point is to say that no factors are conclusive but:

Factors indicating a lease:

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Pop-ups – AppearHere

AppearHere is an online market place linking Ls who have available temporary space with potential occupiers (in essence, Airbnb, but for retail space). All L needs to do is fill in a form online to list available space, and then enter into a licence agreement (provided by AppearHere) if a suitable occupier is found.

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L’s works – quiet enjoyment?

L may want to carry out works to other parts of the building, but yet find that T complains that the disturbance is a breach of T’s entitlement to ‘quiet enjoyment’.

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MEES – timetable

Minimum Energy Efficiency Standards mean that Ls with properties with an EPC rating of less than ‘E’ will have to carry out works to improve the energy performance of the building in order to let, or continue letting, the building.

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Possession proceedings – then rent action?

L successfully brought possession proceedings against T. Having done so, L then started a new claim to recover mesne profits. T responded by arguing that both claims were based on the same cause of action (ie trespass), and that the first action (ie for possession) effectively extinguished that cause of action (under the doctrine of merger). In effect, T says L has already got judgment, and that any subsequent claim is merged with the original claim, and so must be struck out.

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Sub-T – request for new tenancy

The High Court has clarified the rules on service of notices (under LTA 1954) by sub-Ts requesting a new lease.

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Assignment – assignee’s application?

If a business is being sold, especially following insolvency, it is not unusual for the parties to agree that the prospective assignee applies to L for consent to assign. If there has been insolvency, the administrators will want to drop out of the picture as soon as possible to save on costs, and in practical terms the buyer will be best placed to deal with the application.

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Variation – or surrender?!

Variations can be a handy way of changing the obligation between L and T. But, if you are not careful a deed of variation can unintentionally change the terms of the lease in such a fundamental way that the law deems the lease to have been surrendered – with the parties granting a new lease on identical terms save for the variation (ie it becomes a surrender and grant, rather than a mere variation).

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Property guardians – assured shorthold!

Property guardians are residential occupiers sent into an empty commercial building to protect it from squatters and vandalism. Typically, a guardian will occupy under a licence agreement, and pay a relatively cheap rent.

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