1. Office Agents Society Repair and potential pitfalls
Difficulties for landlords arising when a tenant underlets
Nick Dalgleish and Simon Pestell
September 2016

2. OAS Training OAS TRAINING Who we are: Nick Dalgleish, Associate
Real Estate
Thames Valley
Tel:
Simon Pestell, Senior Associate Property Litigation
Thames Valley
Tel:

3. The national UK law firm
OAS Training
The national UK law firm
153 partners and 736 legal advisers
Turnover of £107m to end April 2016
UK Law Firm of the Year 2015 – The British Legal Awards
Real Estate Legal team of the Year finalist – Estates Gazette Awards 2016
Joint first for UK M&A deal activity – Experian Deal Review & League Tables 2015
Accredited for Outstanding Innovation – Best Legal Adviser Report 2015
#1 in Employee Satisfaction Survey and rated a ‘Best Employer’ for twelfth consecutive year in 2016 – Legal Week
Gold Standard status – Investors in People
Best talent initiative – Business Leadership Summit & Awards 2016 finalist
Authorised by the Financial Conduct Authority (FCA)

4. OAS Training OAS TRAINING Today we will cover:
Tenant covenants to repair
How to pass liability to undertenants
Overview of remedies for breach of covenant:
During the term
After the term ends

5. Tenant covenants to repair
OAS Training
OAS TRAINING
Tenant covenants to repair
Meaning of standard obligations:
Full repairing lease
“In repair”
Method of repair
Check no overlap
Detailed definition of premises

6. Underlease repair covenants
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OAS TRAINING
Underlease repair covenants
Different standard of repair may apply
Direct covenant with landlord?
Schedules of condition
Inherent defects
Insured risks
Approval of works

7. Remedies During the Lease Term
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OAS TRAINING
Remedies During the Lease Term
Forfeiture
Damages
Self Help/Notices to Repair
Specific Performance

8. Remedies During the Lease Term Forfeiture:
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OAS TRAINING
Remedies During the Lease Term Forfeiture:
S.146 Notice
Beware leases over 7 years with 3 years left to run
Effect on undertenants – relief?
Damages:
Diminution in value cap
Effect on undertenants

9. Remedies During the Lease Term Self Help:
OAS Training
OAS TRAINING
Remedies During the Lease Term Self Help:
Notice to Repair/”Jervis v Harris” Notice
- Debt claim
- No diminution cap
- Gets results, but tenant must be good for the money
Effect on undertenants
Specific Performance:

10. Damages After Lease End:
OAS Training
Damages After Lease End:
Schedule and Dilapidations Protocol
Basic Amount = Reasonable cost of works + loss of rent
Limited by Section 18 Landlord and Tenant Act 1927
- 18(1) ‘first limb’ - diminution in value cap
- 18(2) ‘second limb’ – demolition/substantial structural alterations
Impact of protected undertenant in occupation

11. Damages After Lease End:
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OAS TRAINING
Damages After Lease End:
Valuation Date
Supercession/Landlord’s intention

12. Other Issues Relevant to Underleases:
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OAS TRAINING
Other Issues Relevant to Underleases:
Underletting for whole of headlease term
Surrender of headlease
Variations and surrenders of underlease
Consents
Landlord and Tenant Act 1954
Disclaimer of headlease

13. OAS Training
OAS TRAINING
Questions?