The Practical Lawyer

Landlord and tenant – commercial

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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CPSE – standard enquiries

The importance of giving accurate replies to the standard enquiries under the Standard Commercial Properties Conditions is illustrated by a recent case.

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Arrears – s17

Section 17 Landlord and Tenant (Covenants) Act 1995 imposes a six-month time limit for claiming ‘fixed charges’ from a former T or guarantor. If L misses the deadline for serving an s17 notice, then the former T or guarantor cannot be held liable for the fixed charge. That six-month period runs from the date when the fixed charge became due.

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Dilapidations – L’s intention irrelevant

 It has become well established in recent years that T will only have to pay dilapidations if L actually intends to carry out the necessary repairs. However, the Scottish CA has recently reversed this approach, upholding a lease provision that allowed L to recover dilapidations without showing that it would actually carry out the work. This was because the money would be paid under a payment clause rather than a damages clause.

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Lease renewal – whole demise?

 Under LTA 1954, when T’s lease expires, T has a right to a new lease of the premises originally demised, which T actually occupies for the purpose of its business.

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