Commercial Property Management Flashcards

Under Section 18(1) of the Landlord and Tenant Act 1927, what statutory cap applies to a landlord's terminal dilapidations claim?

Answer: The claim cannot exceed the diminution in value of the landlord's reversion caused by the disrepair

Section 18(1) of the Landlord and Tenant Act 1927 limits a dilapidations claim to the reduction in the value of the landlord's reversionary interest caused by the disrepair, preventing recovery exceeding actual financial loss.

What is a 'break clause' in a commercial lease?

Answer: A clause allowing one or both parties to terminate the lease before the contractual expiry date

A break clause gives one or both parties a contractual right to end the lease early at a specified date or dates, typically subject to conditions such as vacant possession and compliance with lease covenants.

What is the purpose of a 'schedule of condition' attached to a commercial lease?

Answer: To record the property's condition at lease commencement, limiting the tenant's repairing obligation to no better than that recorded state

A schedule of condition (typically supported by photographs) records the property's state at the start of the lease, restricting the tenant's repair liability to maintaining the property in no better condition than evidenced.

Under the Landlord and Tenant Act 1988, what obligations are placed on a landlord when a tenant requests consent to assign a commercial lease?

Answer: The landlord must not unreasonably withhold or delay consent and must give a written decision within a reasonable time

The Landlord and Tenant Act 1988 requires landlords to respond to assignment applications within a reasonable time, not unreasonably withhold or delay consent, and provide written reasons when refusing.

What does 'alienation' mean in the context of a commercial lease?

Answer: The tenant's rights to deal with the lease interest by assignment, subletting, or charging

Alienation encompasses all forms of dealing by a tenant with their leasehold interest, including assignment to a third party, subletting, and charging the lease as security, typically subject to landlord consent.

Under the RICS Professional Statement 'Service Charges in Commercial Property', when must a service charge budget be issued to tenants?

Answer: Before the start of the service charge year to which it relates

The RICS Professional Statement requires landlords to issue a service charge budget before the commencement of the service charge year, enabling tenants to plan for anticipated expenditure.

What is a 'certified service charge account' in commercial property management?

Answer: An annual reconciliation account signed off by a surveyor or accountant confirming expenditure is accurate and in accordance with the lease

A certified service charge account is the year-end reconciliation signed off by a professional, confirming that expenditure is properly accounted for, reasonable, and complies with the lease obligations.