The letting results from an expansion of Goringe Accountants business and growth in it’s client base and provides them with their first lease having relocated from local serviced offices. The term, arrangements and landlords incentives negotiated by RPS provided Goringe Accountants with a solution to their frustration with serviced office space and enabled J Mould to complete on the fit-out of one of their vacant units that had remained as shell and core for some time.

Completion of this transaction further enhances on RPS’s growing reputation for quality advice and guidance delivered in a practical manner. If you are proposing an expansion of your business then give the RPS team the opportunity to demonstrate to you the benefit of their knowledge & experience.

YES, it does……………

but it will depend of how either your head lessee and liquidator wish to proceed so start by contacting them.

Firstly it is likely that your immediate landlord is not paying the rent or other demands (insurance, service charge etc). Therfore you may receive a S.6 notice from your superior landlord requesting payment directly from you.

The superior landlord may consider forefeiting the lease if able to do so. He will have the liklihood of re-letting in mind and so economic conditions will have a bearing. You couls apply to the court for relief against forfeiture but the court has the discretion to insist on onerous conditions that you must consider.

Alternatively your landlords liquidator (after adminstration) has the ability to disclaim the lease (only the liquidator can forefeit a lease). If this occurs your rights and liabilities in relation to the property are extinguished. But if you continue to make rental payments (and they are accepted) you can apply to the court for a vesting order so you can step into your landlords shoes and become tenant under the headlease.

If your having problems with your lease, landlord or tenant then contact any of the team at RPS who will be happy to discuss your options with you.

So here is a summary of how RPS Ltd management their clients estates;

1. Employ quality staff who have knowledge of property, investment and understand what both their clients and occupiers expectations are.

2 Its’ about the numbers; rent roll, service charges, recoverable and non-recoverable costs, insurance premiums, business rates, professional fees, void rates. It will always be about the numbers……

3 Pay your staff and suppliers on time, keep them informed and motivated. Say thanks for  a good job done. What they do reflects on what you do….they represent your service.

4 Plan and regularly review the estates plans for minimising voids, marketing, service charges, repairs and refurbishments. Be profitable and reduce costs.

5 Be clear in your understanding of your clients objectives and demonstrate how you are delivering them.

6 Have good finacial support and access to expertise on tax planning, IHT, SDLT and VAT. You need to be able to speak their language.

7 Can you deal with the bigger picture and projects? Think development opportunities, energy saving schemes and capital expenditure projects.

8 Prepare a structured 5 year plan on how the property will be managed. Review this annually with the client.

9 Keep records and keep accurate records. Being a good adminstator is essential.

10 Communication; Absolutely essential. Be aware of the key issues in your chosen field. What is important to your tenants, occupiers and clients now, where are the threats and where are the opportunities? And don’t be frightened to express an opinion (but make sure you can back it up!).

Let RPS manage your property investments and we’ll show you sound advice, support and management.

If you think retailing may be for you, perhaps you have a product you want to trial, or just want to make the most  of an opportunity during a special period such as Xmas, Easter or event in your town, then a short term letting could be for you.

These short term occupancies, sometimes known as ‘Meanwhile Leases’ can bring life back to a property or be used for a community benefit and rejuvenate surrounding areas. So, if you think it’s for you and you’ve seen an opportunity here’s some RPS comments for both the landlord & tenant to take note of to protect yourselves;

• A 42 day letting can trigger a further business rates relief period for landlords. So consider this when looking at business rates mitigation plans. Don’t leave this just to your retail units. Look for similar opportunities in your office & industrial properties.
• Tenants, as the landlord is likely to gain from your occupation, push for very low nominal rental.
• Ensure the occupancy does not attract Security of Tenure and falls outside of the LTA 954 Pt 2
• Consider a licence instead of lease
• Make sure you cover issues such as service charge, dilapidations professional fees and insurance premium contributions. We suggest a tenant seeks to confirm all charges are included within the rental charges. See our previous blogs regarding occupancy costs.
• Planning may be an issue so ensure you cover this in your negotiations. Can you use the property for the purpose you want!
• A landlord letting a property is less likely to see the property suffer from vandalism or squatters and is likely to see a reduction in void property costs.
• Landlords, consider promoting and marketing your properties to attract short term occupancy. Make it easier for you to benefit from your property being used whilst we wait for the economy to pick up.

At RPS we see these short term lettings as win – win situation but only if planned and drafted correctly. They have sound business foundations and a shrewd business operator and landlord will see quick benefits from such an occupation.

By using the phrase ‘Without Prejudice’ at the top of all such communication will prevent the use of communications in evidence until a contract is in place to settle the dispute. The documents / communication will be privileged from being produced if legal proceedings are required. But once agreed terms are in place they will be bound, even if headed ‘without prejudice’ unless also headed ‘subject to contract’ (or it is clear that some other type of formalities is also required.

The courts have held, however, that the principle of “Privilege” can protect subsequent and even previous letters in the same chain of correspondence. Strictly speaking, therefore, it is not necessary that every letter be marked “Without Prejudice” if it is clear that the communication is intended to be part of the settlement negotiations. But to be sure it is recommended that you add such headings.

 “Without Prejudice” correspondence remains “Privileged” even after a compromise has been reached and is generally inadmissible in any subsequent litigation on the same subject matter whether between the same or different parties. However, where the negotiations are successful and the “Without Prejudice” correspondence constitutes a binding contract the correspondence may be produced to prove that such a contract has been entered into (if, say, one party does not comply with the terms of the settlement, and the other wishes to enforce it).

Note; Consider using ‘Without Prejudice’ on all communications, this includes emails and text message as well as formal letters and documents.

1. 1.        SHOULD I OBJECT / SUPPORT?

You may have received a letter from your Council notifying you of a nearby development proposal, spotted an application notification posted on the site or in the local paper, or even been asked to join an action group. Maybe your neighbour has let you know he is making a planning application. What should you do?

Clearly, if you are not concerned about the proposal there is no need to do anything. But it is worth giving some momentary thought to the matter. The proposal on its own might not be objectionable but will it set a precedent? If your reaction is one of concern take a moment to stand back and think about your reasoning. The fact you do not like your neighbour is insufficient to justify an objection.

To stand a chance of being taken seriously by the Council any objection or support must be rational, impersonal and directed principally to the planning issues raised by the proposal.

2. THE PROCEDURE

When a planning application is submitted it is processed by the planning department within a set procedure. Applications are usually dealt with within 8 weeks of submission, but delays do occur for a variety of reasons. Once the application is accepted as valid by the Council a series of consultation letters are sent out to a range of Statutory Consultees (such as the Highways Department, Environmental Health, English Heritage etc) which vary depending upon the individual proposal. These consultees are required to respond within 21 days with their comments on the application.

Public participation in planning is increasingly sought by the Government and modern technology will assist further in ensuring you are aware of what is happening in your area. The actual procedure for your Council is established in their Standing Orders.

3. ESTABLISH THE FACTS

All too often objections are submitted which are based on an incorrect understanding of the application. The first step must be to inspect the application and understand it. You may review the application at your Councils’ planning department or increasingly review the application online through the Council’s website. Each application is allocated a discrete planning reference number – it may look something like this x/x/2007/12345/FUL. If you know the number, then ask for the application details by reference to that number. Otherwise make sure you have the address of the property.

You will be allowed to inspect the application forms, plans, drawings and other information submitted by the applicant. You may not be allowed to view the responses from consultees or other objectors, although increasingly these are published online. The planning department will outline the areas of objection and support in their report to the planning committee.

Consider the application carefully. You can usually discuss the application with a Duty Planning Officer so that any technical details can be better appreciated. You can make notes and may also be able to purchase copies of the application (but probably not any plans as these will be copyright).

Review the Local Plan policy. The Council will have copies of their Local Plan available either to view or purchase. This may take a bit of reading but will almost certainly contain policies that have a bearing upon the application. Do they support or deter the proposal? You may wish to refer to relevant policies in your letter of objection / support.

Check the planning history of the property. This may be going a bit far for most domestic applications, but sometimes the property may have been subject to prior refusals/ approvals that will have a bearing upon the matter

5. MAKING YOUR OBJECTION / SUPPORTING STATEMENT

You’ve considered the application, reviewed the options and still wish to make representations. Next step is to write down your concerns / supporting points and send them to the Council Planning Department. There is usually a Case Officer or Area Group allocated to deal with the application, but if you cannot discover the exact person then just send your letter to the Planning Department. Always try and include the Planning Reference Number and location of the property. Again, some authorities now accept online submissions via the planning pages of the Council’s website.

Set out your comments logically and in a straightforward manner. Personal comments about the applicant are rarely helpful and imply the objection is personal rather than based upon the planning issues. Keep it brief. Long or rambling commentary is unhelpful. If you wish to include other information then you can do so. Photographs are often helpful to illustrate to the Council your particular concerns. If there is a particular matter that you believe requires the Planning Officer inspecting personally, from your property, then ask him to make a visit.

You will usually be asked to make your objection within the 21-day consultation period established at the outset of the planning application. However, you can submit objections / supporting statements right up to the moment the application is considered. The later you leave it though the less chance there is of the Council really giving your comments due consideration.

6. MONITOR THE APPLICATION

Larger applications may take some time to determine. It is worthwhile asking your Council if they can keep you informed of progress. Once you are logged as an objector / supporter most Council’s today will notify you of any material alterations. Any significant changes to an application may have to be re-advertised and sent out for further consultation. Check to see how the application will be handled. There is an increasing trend toward the use of Officers Delegated Powers, where the application is determined by the Officers, rather than going to a full planning committee.

7. ATTENDING THE PLANNING COMMITTEE

You are entitled to attend any planning committee meeting to hear the applications being considered by the Council. Committees are usually held on a monthly basis, but may be more frequent depending upon the Council workload. Committee dates are usually posted in the Council Offices and can be checked with the Council’s Committee Clerks Department or the planning department, or online. Increasingly the public is being allowed to speak at committee meetings and each Council adopts their own procedure for this. In most cases you will need to notify the Council in advance of your intention to speak. Check with the Planning Department or Committee Clerks office about the procedure adopted in your particular Council.

The Chairman will invite those who have registered to speak to address the committee from a suitable position in the Council Chamber. Two or three minutes are common time periods allowed for individual public address to the committee and are strictly controlled. Keep your comments simple, keep them to the point and avoid personal jibes. The committee is only interested in the planning merits of your comments and how they relate to the application.

In our experience as a planning consultant the most effective objector is always the cool, calm and collected representative of personal or local opinion, who has done their homework and presents a logical planning case against (or for) the proposal under consideration.

If you do not wish to speak yourself you can arrange for someone to do this on your behalf, but this must be made clear to the committee. If you are representing other people you should ensure you have their permission for you to speak on their behalf. This may be requested by the committee to prove you have other people’s permission. A letter of authority would be useful. Group objections / supporters wishing to say much the same thing are generally encouraged to group their comments together with one or two speakers only, but you may be able to negotiate more time per speech as a result.

SUMMARY

• Investigate the application and associated planning policy
• Consider helpful amendments / modifications
• Consider discussing the application to resolve problems
• Write down and send your concerns to the Council as soon as possible
• Monitor the application
• Attend the committee to hear the decision
• Consider addressing the committee
• Keep all comments to the point, impersonal and related to the planning issues
• Make sure you have other people’s permission to speak on their behalf

Landlords, or more accurately their appointed surveyor, will often include charges in addition to repair works identified at the property. These have included;

VAT, Preparation fees of the schedule, Supervision of works, Solicitors fees to serve the schedule, insurance, business rates and loss of rent.

The landlord may claim loss of rent that cannot be recovered from a new tenant for the period whilst he is carrying out of repairs after lease expiry. The landlord’s theory here being that if the tenant carried out the works then the landlord could potentially lease from day one after the tenant leaves the property.

But most claims for have failed. For a landlords claim to be successful he must be able to demonstrate that the condition of the property and state of disrepair directly led to the loss of rent from the next tenant. The landlord would also have to prove the next letting was immediately awaiting occupation. And in this market proving both these requirements is very unlikely although property with a very demand, such as major high street stores, will have a stronger case.

The true cost of works plus other losses must be a natural and foreseeable consequence of the breach. The landlord can only recover monetary loss.

As usual the RPS advice is twofold.

1; You should start considering your dilapidations strategy (and your long term property needs) 18 months in advance.

2; Read the lease. This is the arbiter and should set out how dilapidations & repairs are to managed and when any landlords dilapidations schedule may be issued. Sometimes even after the lease has expired!

So here’s the response taken from the Direct.Gov’s own website that, unless there are changes to their own requirements, should be applied to all commercial property transactions.

 ‘Prospective buyers or tenants must receive an EPC before they buy, let or sublet premises.

For the sale or rent of an existing property, it is the owner or landlord who is responsible for providing an EPC to any prospective buyer or tenant. This should be done no later than the day on which a viewing is carried out, or written information is provided about the premises. At the very latest, an EPC must be provided when a contract to sell or let premises is arranged.’

 Bearing in the mind the advice from Direct.Gov, when providing advice to our clients, RPS Ltd recommends that an EPC is prepared and made available as part of the initial marketing proposals and that it is included both within the marketing pack and as preparation of the sales pack and CPSE responses. As in most property transactions early preparation of documentation keeps the period between offer and sale completion to a minimum and reduces the ability for the purchaser to either chip the price or stretch out the sales process with the aim of frustrating and lowering the price.

 EPCs are needed for buildings with multiple tenancies and let for different uses, with a mixture of retail, office and/or residential accommodation. EPCs are not needed for:

• lease renewals or extensions
• compulsory purchase orders
• sales of shares in a company where buildings remain in company ownership
• lease surrenders
• temporary buildings with a planned time of use less than two years
• standalone buildings with a total useful floor area of less than 50 metres squared that are not dwellings  

 Existing occupiers and tenants will not require an EPC unless they sell, assign or sublet their interest.

http://www.marlowfm.co.uk/

Following on from our previous blogs its time to see how your lease works in detail. What if you need to make a change?

It is quite normal that during the course of a lease a tenant may need to approach the landlord for consent for covenants that requires the landlords consent to proceed.  As we have pointed out in previous blogs as each lease differs it is essential to read the lease at an early point to avoid costly mistakes.

The distinction between ‘absolute’ covenants, those that prohibit the act, and ‘qualified’ covenants, those that require the landlord’s consent for that act, need to be understood and they contain certain requirements of both the landlord and the tenant. So be aware of the type of covenant and what you need to do. Here are some pointers;

Tenants request for a change of use;

Absolute Covenant – if the lease clause simply prohibits a change of use then there is no implied term to the effect that consent should be granted by the landlord. You cannot proceed.

Qualified Covenant – this may state that the change of use is permissible subject to obtaining the landlord’s consent.  This may go on to say that the landlord’s consent should not be unreasonably withheld or delayed.
What is reasonableness? Well, there is case law on the question of reasonableness, under the Landlord and Tenant Act 1927 s.19 if the landlord grants consent he cannot charge more than expenses and compensation for loss in value provided that the change of use does not include structural alterations to the property.

Tenants request for alterations;

Absolute Covenant – again there are no implied terms.
Qualified Covenant – if the lease clause states that such change is subject to the landlord’s consent it is also implied that the consent cannot be unreasonably withheld or delayed.  The landlord may require payment for compensation for loss in value of the property and expenses and he may also look for re-instatement provided it is reasonable and the improvement did not add value to the property.  Again there is case law which defines what an improvement is and we recommend you take advice. Again, there is case law on the test of reasonableness.

Requests for Assignment & sub-letting;

Absolute Covenant – again, statute does not imply any requirement or the landlord to give consent when there is a prohibition to assign or sublet.
Qualified Covenant – where the lease clause states that assignment or subletting is permissible with the landlord’s consent, statutes assists;

Landlord and Tenant Act 1927 s.19 – there is a proviso that consent cannot be unreasonably withheld and it permits the landlord to recover his reasonable expenses.
Landlord and Tenant Act 1988 s.1 – this provides that landlords are liable for unreasonably withholding and/or delaying consent.  The landlord must provide written reasons for refusing consent or conditions.
Landlord and Tenant (Covenants) Act 1995 – modern leases now specify circumstances when it will be reasonable for a landlord to refuse consent.  Consider this when negotiating and drafting a lease.

Landlord’s advice;

If you are granting a new lease or renewing an old, think carefully about the circumstances in which you would refuse consent to an assignment or subletting. You should also be aware that the more restrictive a lease is the bigger impact it will have on its valuation.

If you receive a tenant’s application then you should act promptly;

Check the lease

Obtain valuation and/or accounting advice.

If you need more time then keep the tenant informed.  If you want more information ask for what you reasonably need and why you need it.

If you want to refuse consent, spend time drafting your response as you only have that one opportunity to explain your reasons.  Provide the supporting advice from your professional team’

Tenant’s advice;

Again, and as always, read the lease for the conditions that need to be performed in relation to your application and meet them.

Check that you are not in breach of any lease covenants. 

Put your request for consent in writing and make it clear what you are asking for. Set a reasonable date for your landlord’s decision and quote the statues above. This shows you know your position and your rights.  Send it by post and recorded delivery.

Pre-empt the landlord’s request for information by providing everything with your application.

If you believe the landlord is stalling, tell him so in writing but carry on dealing with his enquires.