Welcome to Commercial Leases Chaired by Ms. Justice Mary Laffoy We - - PowerPoint PPT Presentation

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Welcome to Commercial Leases Chaired by Ms. Justice Mary Laffoy We - - PowerPoint PPT Presentation

Apr 16, 2023 566 likes •1.11k views

Welcome to Commercial Leases Chaired by Ms. Justice Mary Laffoy We will get underway at 2pm IT assistance? Contact us in chat Or call 01 8788 258 Chairpersons Opening Address Ms. Justice Mary Laffoy IT assistance? Contact us in chat Or

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Welcome to Commercial Leases

Chaired by

  • Ms. Justice Mary Laffoy

We will get underway at 2pm

IT assistance? Contact us in chat Or call 01 8788 258

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SLIDE 2

Chairperson’s Opening Address

  • Ms. Justice Mary Laffoy

IT assistance? Contact us in chat Or call 01 8788 258

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SLIDE 3

How to use chat & ask questions?

On your screen, you will see a tool bar:

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Please click on the chat icon:

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SLIDE 4

Alienation

Landlord’s Perspective: Mark Barr

IT assistance? Contact us in chat Or call 01 8788 258

4

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SLIDE 5

Mark Barr April 2020

Central Law Training Landlord & Tenant Seminars Alienation – A Landlords Perspective

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Introduction

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  • Pre-lease evaluation of covenant strength
  • Review of accounts, other financial data, trading information,

sectoral issues

  • Forms of alienation, assignment , subletting ,licensing, sharing of

possession

  • VAT implications
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Review of Draft Clause

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  • General prohibition on alienation save as provided in alienation

covenant

  • S 66 L&T(amendment) Act 1980
  • Note issues where alienation is by way of charge to a lender to the

Tenant

  • Information on proposed assignee or sublessee
  • Back to checking covenant strength
  • Accounts/trading information etc
  • Requirement for a guarantor or surety for corporate assignees
  • Licence to assign
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Subletting Entire or Part?

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  • Sublease to reflect terms and conditions of head lease including

rental provisions and rent review

  • Amount of rent reserved by sub lease -higher of market or

passing? Valuation implications and sub lease rent as a comparable in a rent review under the head lease

  • Note provisions of S.78 of L&T Amendment Act 1980
  • Deed of direct covenant/Licence to Sub Let
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Security of Tenure/Landlord and Tenant Rights

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  • Typically a Landlord will require a sub tenant to execute a deed of

renunciation as a precondition to consent

  • Landlord right of pre emption
  • Landlords reasonable legal or other expenses (S.66) and Landlords

increase of any rates, taxes or other burden(S.66)

  • Change of Use/Consent to Alterations
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Grounds for Refusal of Consent

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  • S 85 of L&T(Amendment) Act 1980 – Prohibition on “contracting
  • ut”
  • If Alienation covenant is unreasonably restrictive/prescriptive runs

risk of being void

  • Sample clause is of course eminently reasonable!
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SLIDE 11

Thank you

May 2020

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Alienation

Tenant’s Amendments: Brian O'Callaghan

IT assistance? Contact us in chat Or call 01 8788 258

12

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SLIDE 13

williamfry.com

Central Law Training Landlord and Tenant Seminars

Alienation – A Tenant’s Perspective Brian O’Callaghan

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SLIDE 14

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  • Tenants requires flexibility
  • Statutory protection but difficulties with this

Introduction

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  • Partial alienation
  • Partial sub-letting

– Does the premises lend itself? – Floor area restriction

  • Group company assignment

– Outgoing tenant to guarantee assignee? – Group company sharing

  • Third party sharing

– Tenant ensures no landlord and tenant rights accrue

  • Profit test

Practical Considerations

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SLIDE 16

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  • Sub-letting
  • Recessionary times; open market rent v passing rent
  • Disregard of sub-let rent on review

Further Practical Considerations

WF-26455071-v1

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SLIDE 17

williamfry.com Brian O’Callaghan

Partner, Property

brian.ocallaghan@williamfry.com T +353 1 639 5316

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SLIDE 18

williamfry.com

Central Law Training Landlord and Tenant Seminars

Alienation – A Tenant’s Perspective

Thanks

WF-26453522

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SLIDE 19

Alienation

Negotiation Towards a Compromise Clause

IT assistance? Contact us in chat Or call 01 8788 258

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Repair and Yield Up

Landlord’s Perspective: Brian O'Rourke

IT assistance? Contact us in chat Or call 01 8788 258

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SLIDE 21

Brian O’Rourke April 2020

Central Law Training Landlord & Tenant Seminars Repair – Landlord’s Perspective

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Introduction

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  • Importance of Repair Covenant
  • Protect Landlord’s Valuable Interest in the Property
  • Context is Everything

➢ Age/condition/character of the property ➢ Extent of demise ➢ Length of term ➢ Quantum of rent ➢ Prevailing market conditions / balance of bargaining power

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Scope of Repair Obligation

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  • FRI v. IRI
  • Landlord’s aim is an entirely “clean investment”
  • “to repair”, “to keep in repair” - implies “to put in

repair”

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Drafting

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  • Definition of demise is crucial
  • Covenant to repair

From time to time and at all times during the Term: a)to keep clean and tidy and to maintain, repair, replace and reinstate and to put into and keep in good order repair and condition from time to time and at all times during the Term, the interior and exterior of the Demised Premises and every part of it and any additions, alterations and extensions to it including, without derogating from the generality of the foregoing, the roof, structure, drains, foundations, walls (including external and load bearing walls), timbers, joists and beams of the floors and ceilings, chimney stacks, gutters, doors, locks, plate glass and other windows, fixtures, fittings, fastenings, wires, waste water drains and other pipes and sanitary and water apparatus in or on the Demised Premises; and b)to keep clean and tidy and to maintain, repair and keep in good working order and condition and (where necessary) renew and replace with articles of a similar kind and quality all plant and machinery in or forming part of the Demised Premises including the Conduits and the central heating and air conditioning plant (if any), the sprinkler system and all lifts, lift shafts and lift machinery, all boilers and all electrical and mechanical plant, machinery, equipment and apparatus.

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Other Relevant Provisions

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▪ Decoration ▪ Statutory works/obligations ▪ Break Options ▪ Yield Up ▪ Landlord right of entry (interim schedule of dilapidations)

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Negotiation

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▪ Schedule of Condition ▪ Fair wear and tear ▪ Latent and Inherent Defects ▪ Collateral Warranties ▪ Uninsured Risks

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Thank you

April 2020

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Repair and Yield Up

Tenant’s Amendments: Conor Treacy

IT assistance? Contact us in chat Or call 01 8788 258

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SLIDE 29

williamfry.com

Central Law Training Landlord and Tenant Seminars

Repair – A Tenant’s Perspective Conor Treacy

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  • FRI
  • IRI
  • Extent of demise / length of term / market
  • Contribution to repairs of structural – service charge

Introduction

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  • Schedule of Condition
  • Fair Wear and Tear
  • Defects / Collateral Warranties / LDI Policy
  • Insured Risks / Uninsured Risks
  • Decoration

Repair

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  • Dilapidations
  • Section 65 (2) of the Landlord and Tenant (Amendment) Act 1980

The damages recoverable in any court for the breach shall not in any case exceed the amount (if any) by which the value of the reversion (whether mediate or immediate) in the tenement is diminished owing to the breach

  • Break Options
  • Practical Considerations

Yield Up

WF-26470554-v1

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SLIDE 33

williamfry.com Conor Treacy

Partner, Property

conor.treacy@williamfry.com T +353 1 639 5370

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SLIDE 34

williamfry.com

Central Law Training Landlord and Tenant Seminars

Repair – A Tenant’s Perspective

Thanks

WF-26470554

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SLIDE 35

Repair and Yield Up

Negotiation Towards a Compromise Clause

IT assistance? Contact us in chat Or call 01 8788 258

35

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Rent Review

Landlord’s Perspective: Mark Barr

IT assistance? Please email cpd@cltireland.ie Or call 01 8788 258

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SLIDE 37

Mark Barr April 2020

Central Law Training Landlord & Tenant Seminars Rent Review – A Landlords Perspective

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Introduction

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  • Rent keeps pace with market/inflation
  • Methods of review, Open Market, CPI, Bespoke buildings with few

if any market comparables.

  • Law Society/IAVI Clause from early 1980s
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Role of Rent Review Valuation Surveyor in relation of Rent Review Provisions

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  • Experience in how facets of drafting play out at arbitration or

expert determination

  • Assume each review under the clause will go to third party

adjudication

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Review of Sample Clause

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  • Open Market Rent - probably the most crucial definition in entire

provision

  • Length of term of notional lease
  • Tenant with a special interest – a “willing tenant” includes the “Tenant”
  • Same terms, conditions, covenants and provisions as contained in

“this Lease”

  • Remember onerous covenants may have negative valuation

connotations at rent review and “Tenant friendly” covenants the

  • pposite effect!
  • Passing rent is ignored but existence of rent review provisions is taken

into account.

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Assumptions

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  • Ready for occupation/use
  • Tenant has enjoyed rent concessions for fitting out but not a “headline

rent”

  • No devaluing work by Tenant
  • Premises have been reinstated if damaged or destroyed
  • Premises in good repair/condition
  • Permitted Use – avoid very narrowly described uses
  • Landlord and Tenant covenant compliance
  • Floor Area
  • Landlords finishes specification
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Disregards

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  • Tenant/subtenant occupation
  • Goodwill attaching to the Tenant’s business
  • Tenant works other than those required to comply with lease

covenants

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S132 of L&C Law Reform Act 2009

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  • Rent review provisions in Leases granted post 28 February 2010

are deemed to be on an upwards and downwards basis regardless

  • f how drafted
  • Cap and Collar
  • Landlord only triggered review as per sample provision
  • No decided cases on efficacy
  • “Regearing” leases granted pre 28 February 2010 and avoidance of

“Surrender and regrant”

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Disputes

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  • Appointment of Surveyor
  • Arbitrator or Expert
  • Interim payments and adjustments post review
  • Time of the essence
  • Rent Restrictions
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Thank you

April 2020

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SLIDE 46

williamfry.com

Central Law Training Landlord and Tenant Seminars

Rent Review – A Tenant’s Perspective Brian O’Callaghan

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SLIDE 47

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  • Role of Rental Valuation Surveyor
  • Negotiating Future Rent Now!
  • Notional Lease Terms v Reality
  • Rent Review should reflect Reality

Introduction

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  • Entitlement to Trigger the Rent Review
  • Landlords Maintaining Artificially High Rent
  • Entitlement to Appoint a Third Party

Key Clauses

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  • Boilerplate Disregards
  • Disregard of Tenant Works
  • Is the Unit Ready to Occupy or Receive Fit-Out
  • Disregard of Statutory Obligations

Disregards

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SLIDE 50

williamfry.com Brian O’Callaghan

Partner, Property

brian.ocallaghan@williamfry.com T +353 1 639 5316

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SLIDE 51

williamfry.com

Central Law Training Landlord and Tenant Seminars

Rent Review – A Tenant’s Perspective

Thanks

WF-26453522

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SLIDE 52

Rent Review

Negotiation Towards a Compromise Clause

IT assistance? Contact us in chat Or call 01 8788 258

52

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Thank you for joining us at today’s Commercial Leases Seminar

Central Law Training 01 8788258 cpd@cltireland.ie www.cltireland.ie