The Practical Lawyer

Landlord and tenant – commercial

Heat meters – December

By 31 December 2016, heat meters must be fitted to all existing and new communal heating systems (provided it is cost-effective and technically feasible to do so). Accordingly, Ls of existing buildings which have supplies of heating going to more than one occupier through a communal system need to be aware of the requirement to fit such meters. Thus, when entering into a new lease with an occupier, Ls should ensure sufficient rights are reserved by the lease to allow access for fitting such meters, and if possible include provisions for the recovery of such costs through the service charge.

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Arrears – s17 notice

Recent cases have underlined the importance of serving an s17 notice on a former T or guarantor if the current T is in arrears.

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CRAR – the basics

Two years ago, in April 2014, the common law right of distress was abolished for both residential and commercial premises. Instead, a new statutory procedure, CRAR, was introduced for commercial premises (for residential L must obtain a court order to recover any arrears by way of a simple debt claim). A few reminders:

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Alterations – consent

An application by T to L for consent for alterations is a common occurrence. All too often, such simple applications can get bogged down by procedural difficulties, with the parties then taking entrenched positions. Hence the need for a simple code of good practice, such as the new protocol developed by Hogan Lovells and Falcon Chambers. Like their existing protocol for applications (ie consent to assign or sublet), the protocol for alterations sets out practical steps for both L and T to take. So, while in no sense is it binding, it can save time and money if both parties agrees to follow it:

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Telecoms Code – 1954 Act

The Electronic Communications Code is a stand-alone piece of legislation which does not sit comfortably with the commercial lease provisions of LTA 1954.

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Assignment to guarantor – void!

The High Court has held that any assignment by T of its lease to its guarantor will be void – even if T and its guarantor want it to be valid. This is the effect of the ‘generous’ anti-avoidance provisions in s25 Landlord and Tenant (Covenants) Act 1995.
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Lease renewal – compensation

If L is opposing T’s statutory right to renew under LTA 1954 then T may be entitled to statutory compensation. That compensation will be calculated at the rateable value of the property, but doubled if T and any predecessor in business has been in occupation for 14 years or more.
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Break date – after quarter day

If L wants to negotiate the inclusion of a break clause in a lease, the L would be well advised to demand that the surrender date be just after (not before) a rent payment date.
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Surrender – handing back the keys?

Can T (or more usually, an administrator) surrender a lease by simply handing the keys back to L? If L accepts the keys, then L may have inadvertently carried out an act that amounts to an unequivocal acceptance of the surrender and the termination of the lease.
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Air-con – consent?

When acting for T, it is important to consider the scope of any fitting-out works (or future works) and whether L’s consent will be needed.
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