PropertyLaw.guru Blog

EG 06-03-21

p.36 The two lease problem - Dilapidations. A lease (“the

first lease”) is granted. It contains a tenant’s obligation to repair and to reinstate alterations, if so required by the landlord. When it expires, a further lease (“the second lease”) is granted by the then landlord to the same tenant, on substantially similar terms, including the same repairing and reinstatement obligations. 

When the second lease expires, the landlord makes a claim for terminal dilapidations for breach of the covenants in the second lease. The claim includes damages for disrepair, and for failure to reinstate alterations carried out under the first lease. First, is the applicable standard of repair under the second lease to
be determined by reference to the circumstances when the tenant took occupation under the first lease, or at the start of the second lease? Secondly, there is the bigger question of whether or not there are any liabilities at all under the second lease for reinstating alterations made during the expired first lease. The obvious answer to the “two-lease” problem, as with many similar issues,
is to prevent it from arising in the first place through appropriate drafting of the second lease. So, for example, the standard of repair issue might be dealt with by a provision to the effect that the repairing obligations in the second lease are to be construed and applied as if that lease had been granted on the date of the first; and alterations under the first lease can be covered by extending the alterations covenant in the second lease to include them. 

P.39 Witness statements. Points out some really important factors in drafting witness statements that are often forgotten. Practice Direction 57AC set out a new regime for them which hopefully will cure some of the bad practices that have been allow to develop. There is a statement of best practice, which is a well written guide to taking a statement

P.40 The Future Homes Standard and Future Buildings Standard is intended to be in place by 2015 and will reduce the greenhouse CO2 impact of average homes by 75%

P.41 General article on improving energy usage and carbon performance in buildings 

p.42 Criterion Buildings v McKinsey [201] EWHC 314  - L claimed indemnity costs per the lease drafting after a successful service charge claim.The judge felt an obligation to pay costs ‘properly incurred’ should be interpreted as indemnity costs not the standard basis. It will be interesting to see if T’s solicitors start amending leases to exclude recovery of costs on an indemnity basis or some other restrictions.

P.42 Brent LBC v Shulem B Assoc [2021] EWHC 1663 - importance of making service charge demands before the 18 month time limit under s20B L&TA85 expires.

SDLT & Trusts. Good summary of the nightmare complexities  of SDLT in relation to trusts. Freeholds and assignments of leases and bought by a Bare trusts are treated as being bought by the beneficiary not the trustee. But not leases taken by a bare trustee! Settlements are treated differently too. The 3% HRAD surcharge is treated differently again! The days of solicitors doing tax returns should end and they should be dealt with specialists is my view.


P.44 Further Permitted Development rights are proposed allowing Class E to be converted to residential use under PD rights! The High Stress of the country may never look the same again as a result.

P.45 - A surveyor canoe negligent when failing to find a defect they could never have reasonably spotted!! Hart & Anor v Large [2021] EWCA Civ 24








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