Minimising the cost and maximising compliance when it does happen

What you can do and how you can do it

Some tenants default – even in good times.  When times get tough even more default – in their compliance with lease terms/tenancy agreements and in not paying what they ought under the lease/tenancy agreement.  This one-day briefing is about what can be done to, at best, prevent it happening and, if it does happen, how to enforce a landlord’s rights and minimise financial loss.  It covers both commercial and residential property and is intensely practical.

Covering:

  • Action before the lease/tenancy agreement – acting early
  • Lease/tenancy agreement terms to create options for management should default occur
  • Issues during the lease/tenancy agreement
  • When, how and why to terminate
  • Practical considerations during the term and at lease/tenancy agreement end – using case studies
  • Using insurance to reduce the impact of default

For everyone responsible for managing property and maximising the returns from ownership.  Course directors, Matthew Bonye, Real Estate Litigation Partner, Herbert Smith Freehills LLP, Emma Humphreys, Partner – Property Litigation, Charles Russell Speechlys LLP and Ashley Winter, Partner, Dilapidations and Tenant Alterations Services, Malcolm Hollis LLP will focus on the ‘what’ and ‘how’ – highlighting ways to minimise the cost while thoroughly covering the options available.

Course Content:

Action before the lease/tenancy agreement – acting early

Using case studies, this session will highlight:

  • What happens at the point of putting the lease/tenancy agreement together – key pointers at lease drafting stage
  • Ensuring the Heads of Terms of commercial leases are in enough detail so there are no misunderstandings
  • Understanding the clauses better and knowing what they mean
  • Ensuring due diligence at the outset and identifying clauses which may give rise to problems – how to minimise potential difficulties later down the line
  • Checking covenant/s (what to do and how)
  • Deposits … the threat of withholding these

Matthew Bonye, Real Estate Litigation Partner, Herbert Smith Freehills LLP

Lease/tenancy agreements terms to create options for management should default occur

  • Right to demand advance payment if the tenant’s status deteriorates
  • Guarantors and sureties

Matthew Bonye, Real Estate Litigation Partner, Herbert Smith Freehills LLP

Issues during the lease/tenancy agreement

  • Acting early to spot & investigate issues
  • How to get arrears paid
  • Enforcing other obligations during the tenancy
  • Improving security on assignment/subletting
  • Dealing with tenant insolvency & other attempts to evade liability

Emma Humphreys, Partner – Property Litigation, Charles Russell Speechlys LLP

When, how and why to terminate

  • Refusing renewal under the 1954 Act & other tactics
  • Forfeiture
  • Surrender
  • Break options
  • Practicalities of what happens next

Emma Humphreys, Partner – Property Litigation, Charles Russell Speechlys LLP

Practical considerations during the term and at lease/tenancy agreement end – using case studies

  • Carefully documenting and reviewing tenant alterations
    • Ensuring licences are in place
    • Ensuring works are undertaken in a way to minimise impact on the landlord’s reversionary interests
  • Regularly inspecting properties to highlight issues of disrepair and unlicensed alterations throughout the term
    • Getting the key issues dealt with during the term
  • Reviewing the dilapidations’ position at lease/tenancy agreement end or prior to default
    • Retention of tenant deposits due to breach of lease/tenancy agreement
    • Preparing and dealing with the settlement of schedules of dilapidations: what other redress could there be beyond the retention of tenant deposits without getting messy and going through the courts?

Ashley Winter, Partner, Dilapidations and Tenant Alterations Services, Malcolm Hollis LLP

Using insurance to reduce the impact of default

  • What’s possible
  • At what cost