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a ~17~V~r // * 1 rket a TRANSPORT P~ ~~ fr~6GI~ ~ N f~TRucruaf - PowerPoint PPT Presentation

Dec 31, 2023 •171 likes •560 views

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  1. ~~ ` ~ . i . ~ i / \~~ ~ ~~` ' ' ' ,, r ~ f , , ~~ ~ 1~~ / ~~ 1 ~' ~~~~ Retailers '~ r r `„ y ~~/ i n ases a ~17~V~r // • * 1 rket a TRANSPORT P~ ~~ fr~6GI~ ~ N f~TRucruaf . ~ *~** . .~ ~ ~~ RED l '~ ::. ~t ESTnTe `t C o ,,,,,~~}~{i~,~, ~{}~ ~~ ~_ ~~c ~S~oNt R NvES fS ~ ~ae~~~ ,~ `7~'~t~ -----ir C P~ w ~ ~

  2. .~ '~~~ L S~wo~l.)')0 f \ S1.n~w1S3nNi y SNolS~~3Q, ~~ r , • ~lUiS3 . ~!~~`~~vt0~ ~ ~ ` ~~ Hv1~~ ....~ ~ u~~~ ~ _ ~~,~~~~isu~~U~ 9 • 1~ ~~b~ --- - ~3W y ~Zph ~ ~ ~~a)~ ~~ a u ~~ t ~ c~j ~ ~~(~0 ~~ ~ ~* ~ ~ ~ ~ ~~~~N~ a ~~~M1 ~oN~ s~~~~~ ~ ~ r y ~ ~~~ ~ Q ~~~~ ~, 1S ~'-~ n ~ ~ol~ . ~~4!~NI s Z x a'~ ~ ~ N ~~ ~ ~ `~ MONK ~~~ r ~~ ~ 3 ~;~~. ~. ;, ~ ~ , ~, ,~ ~ . ~~ ~d ~,~ ~°S ~ _ w ~ _

  3. Modernisation • "As per the existing lease but subject to reasonable modernisation" this mean? • What does given • What guidance has the Court as to "reasonable modernisation"? • What other guidance/strategy can be used to secure terms? favourable .:.~ .,

  4. Term Commencement • On the coming to the end of the current tenancy. Length Maximum term of 15 years otherwise term must be "reasonable in all the circumstances". • Difficulty Landlord may face in re -letting the Property • Length of tenancy current continued 1954 Act protection Tenant's possibility of falling rents • Rental market as a whole and for • Landlord's and Tenant's plans the Property longer Limited evidence that Tenants forced to take leases than they wanted

  5. Term Iceland v Castlebrook (2013) Tenant • Needed flexibility • Store was underperForming and in a poor location • Market conditions were unsettled Landlord • Short term would adversely affect its reversionary interest • Supermarket leases were normally granted for longer terms Judge • Accepted the Property was dated with a limited life and market • Landlord produced poor evidence • Tenant's national trading performance • Ordered a 10 year term with no break

  6. Tenant Break Option • Limited Case Law reason for a break • Company Policy not an acceptable "on the cards" or a "real possibility" • Relocation must be SL. h ..5

  7. O'May -v- City of London Real Property Company Limited (1983) In considering the terms of a renewal lease the Court must "have regard to the terms of the current tenancy and to all relevant circumstances" • Existing lease not petrified seeking to depart from the current lease • It is for the party terms that must show that the change is reasonable and fair • Can the other party be compensated for that change. } ~:

  8. Other terms Alienation • Landlord and Tenant (Covenants) Act 1995 Authorised Guarantee Agreements • Pre-emption Rights Guarantors Existing guarantors New guarantors

  9. Other terms contd..... User • Widening of user clause unlikely to be accepted • New restrictions on user • Keep Open • Competition Law Borough Council Martin Retail —v- Crawley (2013) • Landlord looking to impose prohibition against convenience store use to protect nearby convenience store • Tenant looking to widen user to allow convenience store use • Court held Landlord's proposed restriction anti -competitive and allowed the Tenant to widen its user clause on basis Tenant agreed to pay additional rent

  10. Other terms contd..... Repair for —v- long Responsibility structure (short lease) • Landlord's right to self-help • Property already out of repair Alterations standard • Centre Service Charge Building Repair and maintenance of the • Soft services Costs

  11. Other terms contd..... • Rent review • Party looking to depart from the existing lease must prove that change is fair and reasonable in the • Compensated by increase/decrease rent • Market norm • Estate Management

  12. Other Tools available to Retailers Code for Leasing Business Premises (2007) • Industry collaboration between sanctioned advisors to Landlords and Tenants for New to what "fair • Checklist Lease and Renewals as is and reasonable" considering: • Lip Service to date but worth • Impact on value • Disputes • Threat of Legislative Change

  13. Other Tools available to Retailers contd..... The RICS Code of Conduct in Commercial Service Charges • "best practice" all regulated practitioners should have regard to the Code on renewal • Modernise service charge • Adjustments should be made to the rent • Interaction with O'May Green Leases • Court sympathetic to removing barriers to environmental improvements • Increasing burden on occupiers either through direct obligations or service charge .~:~ ~' •~'.1

  14. Strategy • Consider your existing Lease to understand how the terms sit with your current occupational requirements first discussing • Avoid agreeing the term and rent without modernisation principles of Consider the impact of a "Landlord friendly" Lease on rental value of model sets of heads of terms Use ~~:

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  16. J '~ ~~°~ ,~. ~~ s~ ,,, ~ \ \~ >~ ~ ~. ~ ~ ~ ~ ,, ~~~ ~ '( ~ dr ~ ~N ~ ~~ \ r~ /o ~ 5 ~ ~ ,, 1 o yN ~~~E I ~~~~ • ~O~~~oG Spi~ ~~~~~~~ l7 nd, N L ,a ~ToK E~ ~ o D~ ~~06~ ~~ ~ ~~~~ ~ ti ~ ow ~ A Lease Renewals SrA~~~N~, A~~ "~ rNy~v _ ~ ~ --` UNDO TN E,1~ ENERG,y RiGbQ6~S ~. ~ / ~.~ D 0 (~ ~ `1C W1E ~oR ~~ ~,~6~ ~ k AM O TRANSPORt s ~ B~ (~~ ~Nf~ uctu P d ~~ ~" ~1~Gll . Q ~ ~* R E Barley Mark ~_~_ ** V~ 14 May 2015 RE~~ ~ I ~ p ~ , ESTATE `'C COvh Illy Qp Va ~~O ~' • + ~Ec ~~ ~ ~SloNt INv&STMf~S 0lfT'G OM FS ~/ ~~,~ iJ~2Qi(.Y/' C r7`~'r~ t . ~~~_ ~ ;~ ~e d~

  17. Introduction Landlord and Tenant Act 1954 • Procedure regulating business tenancy renewals • Need for issue of proceedings • Tight timescales c.f dilapidations claims (12 years) • Early resort to the court process c.f Practice Direction: Pre -Action Protocol .h s . r- .~viYfvas~:sara t~ _~airke'ir~.. ~M, - '~erc~ :. ~ ~

  18. contd..... Introduction —formalisation of negotiation? 1954 Act procedure of claim and defence • Exchange of travelling draft leases • Formal exchange terms • Schedule of unagreed • Witness evidence • Expert evidence

  19. contd..... Introduction anyway if negotiating Steps parties would take • H OTs travelling drafts • Solicitors' on rent levels • Agents' advice .~., ::.:.~. .., :::.~

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