Landlord and Tenant Act 1987: Checklists/Exclusions

Action to be Taken by Solicitor Where Negligence Suspected

• If a solicitor discovers an act or omission that could justify a claim against them or their firm, the solicitor is recommended to take certain actions
• Contact insurance providers
• Inform the client or third party to enable them to seek independent legal advice
• Seek advice from insurers regarding further communication with the client or third party
• Confirm any oral communication in writing

Non-Contentious Costs

• The Solicitors' (Non-Contentious Business) Remuneration Order 2009 (SI 2009/1931) stipulates that remuneration must be fair and reasonable, considering all case circumstances
• Considerations for fair remuneration include the complexity/difficulty of the matter, the skill/labour/knowledge involved, time spent, number/importance of documents, location/circumstances where business is transacted, amount of money or property involved, registration of land, importance to the client, approval of entitled person or testator, solicitor's work contribution, and overall cost amount

Agreement with Client for Non-Contentious Costs

• Solicitors Act 1974, s.57, allows solicitors to make an agreement with a client for costs in a non-contentious matter
• Agreements must comply with s.57 of the Solicitors Act 1974 to be enforceable
• Agreements must be in writing
• Agreements must embody all terms

Checklists for Rectification of the Register

• Rectification of the register
• A mistake whose correction involves rectifying the register
• A mistake in an official search
• A mistake in an official copy
• A mistake in a registrar-kept document
• The loss or destruction of a document lodged at HM Land Registry for safe custody inspection
• A mistake in the cautions register
• Failure by registrar to perform their duty under Land Registration Act 2002, s.50, regarding overriding statutory charges

Covenants for Title: Full Title Guarantee

• Full title guarantee warrants that the seller has the right to dispose of the property
• The seller will bear the costs of ensuring the buyer receives the title they purport to give
• The seller will dispose of their whole interest
• The seller will dispose of the whole lease where the interest is leasehold
• The seller will dispose of the freehold where unclear if interest is freehold or leasehold
• In cases of a subsisting lease, the seller covenants the lease is subsisting with no breach to result in forfeiture
• In the case of mortgaged property subject to rentcharge/lease, the borrower observes/performs their obligations
• The disposer is disposing of it free from encumbrances/rights, not being rights the transferor could not reasonably be expected to know

Covenants for Title: Limited Title Guarantee

• The transferor didn't charge or encumber property
• The transferor didn't grant any third-party rights that subsist/transferor isn't aware of anyone else doing so since the last disposition
• The seller warrants that he or she or his or her predecessor hasn't encumbered the property.

Checklist for Breach of Contract

• Has there been a breach of contract?
• If so, what type of breach is present, i.e., condition or warranty?
• What remedy does the client want e.g. damages or specific performance?
• Is there a valid exclusion clause which might prevent the claim?
• When did the limitation period start to run?
• What is the estimated total financial loss?
• How much of that loss would be recoverable, considering remoteness of damage?
• Would the costs of action be justified?
• Who should be sued e.g. other party to the contract, solicitor, surveyor?
• If a claim cannot be made, is there an alternative action available e.g. in tort or misrepresentation?

Circumstances Where Specific Performance Will Not Be Awarded

• Specific performance, an equitable remedy, is subject to the principles of equity and will not be awarded if:
• An award of damages would adequately compensate for the loss sustained
• One of the contracting parties lacks full contractual capacity
• The contract contains a vitiating element e.g. mistake, fraud, illegality
• The enforcement of the order would require the constant supervision of the court
• A third party has acquired an interest for value in the property
• The award would cause exceptional hardship to the guilty party
• The seller cannot make good title

Indemnity from HM Land Registry

• Subject to the Land Registration Act 2002 exceptions, a person is entitled to be indemnified by the registrar in the event of loss by reason

Completion of Tenanted Property

• On completion of the purchase of a freehold property, the buyer's solicitor should receive the original lease(s) and tenancy agreement(s)
• On completion of the purchase of a freehold property, the buyer's solicitor must receive an authority signed by the seller and addressed to the tenant(s), authorising the tenant(s) to pay future rent to the buyer.

Tenanted Property: After Completion

• The new landlord (buyer) must give written notice of assignment, name, address, the date on which rent is payable
• Two months is the period for the date of assignment or when rent is payable
• They must send two copies of notice for the tenants to sign/return as receipt proof
• Also, they must send a copy of the notice with a covering letter to the seller, who remains liable for breaches until there is written assignment notice

Items the buyer’s solicitor should check when looking at leaseholds

• The lease/sub-lease
• The purchase deed
• The landlord’s licence
• Marked abstract or other evidence of superior titles in accordance with the contract (lease not registered or not registered with absolute title)
• Form DS1 or an appropriate undertaking in respect of the seller’s mortgage
• Certificate of non-crystallisation (if appropriate) (company charges)
• Copies of duplicate notices served by the seller and the seller's predecessors on the landlord in accordance with a covenant in the lease requiring the landlord to be notified of any dispositions
• Insurance policy (or copy if insurance is effected by the landlord) and receipt (or copy) relating to the last premium due
• Rent and service charge receipts
• Management company memorandum and articles
• Seller's share certificate and completed and executed stock transfer form
• Items the buyer's solicitor should hand to the seller's solicitor include money due in accordance with completion statement
• Duly executed counterpart licence to assign
• Release of deposit

Variation of Long Leases

• A party to a long lease of a flat may apply to the First-tier Tribunal (Property Chamber) in England or the Leasehold Valuation Tribunal in Wales under Landlord and Tenant Act 1987, Part IV (as amended by Commonhold and Leasehold Reform Act 2002) for an order for variation of the lease, where the lease fails to make satisfactory provision for:
• Repair or maintenance of the flat
• Insurance of premises
• Repair or maintenance of installations
• Provision of services
• Recovery by one party of expenditure incurred by the other
• Computation of services charges under the lease

Buying Tenanted Property: Buyer’s Checklist

• Matters the buyer's solicitor should check include the lease terms or agreements supplied by the seller's solicitor, the effect of any security of tenure legislation on the tenants and the details of obligations

Assignment of Lease: The Pre-Contract Package

• The seller’s solicitor should generally supply the buyer’s solicitor with several documents:
• The draft contract
• A copy of the lease or sub-lease being purchased
• A plan of the property (where appropriate)
• Evidence of the seller’s title
• Replies to pre-contract searches
• Insurance of the property
• Details of any management company
• Charge accounts for the last three years
• How to get information about what steps they have taken
• A request for the right information
• Pre-contract information

Completion of Assignment

• Completion follows the procedure of a freehold transaction
• The seller’s solicitor must hand to the buyer’s solicitor relevant documents

Assignment of Lease: Buyer’s Solicitor’s Checklist

• The buyer’s solicitor must review the lease and advise clients on their responsibility and various covenants
• Leases may require assigns to enter direct covenant
• Landlord and Tenant (Covenants) Act 1995 defines old tenancies
• It must be checked and see if Land Registry grants an appropriate easement registration
• It must be checked whether the original tenant may be required to file under circumstances surrounding the payment of tax

Landlord’s Consent

• If the landlord's consent is needed
• The solicitor should ask clients about transfers with the names of the landlord or tenant

Prospective Buyer’s Notice under Landlord and Tenant Act 1987

• Landlord and Tenant Act 1987 s.18 enables a prospective buyer to serve notice and dispose of premises. The notice is must
• Set out the principal terms of the proposed disposal
• Invite the recipient to serve a notice stating:
• Whether an offer notice has been served
• If not, whether the recipient is aware of any reason why he or she is entitled to such a notice and
• Whether the recipient would wish to exercise any right of first refusal
• Set out the effect on a notice

Assignment of Lease: Seller’s Solicitor’s Checklist

• The solicitor should acquire information from the client or from landlord
• Information on payment records
• Details of the property
• Memorandum of associations
• Information needed for the lease

Landlord’s Offer under Landlord and Tenant Act 1987

• Landlords must serve notice on the qualifying tenants of the flats
• Different types of proposed disposals require different prescribed information to be inserted into the notice. The notice must
• Set out the principal terms proposed
• State that it constitutes an offer to dispose of the property
• Specify a period for acceptance
• Specify a further period

Acting for the Purchaser of a Reversionary Interest in a Flat

• If acting for a solicitor in an exchange of contracts
• Check information
• If the landlord and any previous owners served notice
• The tenants either expired or the time limits have elapsed and can be paid

Landlord and Tenant Act 1987: Relevant Disposals: Exclusions

• Landlord and Tenant Act 1987 s.4 excludes the Act from
• An interest of any beneficiary
• Any incorporeal heriditment
• Disposal by way or security
• Bankruptcy
• Inheritance