bradley.mason, Author at Bradley-Mason LLP

Section 25 Notices: Lease Renewals under the Landlord & Tenant Act 1954

Posted on November 23, 2023April 9, 2024 by bradley.mason

Commercial tenancies in England and Wales are governed by The Landlord and Tenant Act (LTA) 1954. A Section 25 Notice is named after the section in the LTA 1954 that includes the information that a Landlord needs to provide to the Tenant in order to terminate the business tenancy.

Security of Tenure gives the Tenant the right to be offered a new tenancy at the end of the term. This right was granted in The Regulatory Reform (Business Tenancies) (England and Wales) Order 2003. It applies to tenancies unless the Landlord and Tenant agree to opt out of sections 24-28 of the LTA 1954 at the start of the Lease.

If the Landlord wishes the Tenant to leave at the end of the term or wishes to grant a new Lease on new terms, then a Section 25 Notice must be served within 6 to 12 months before the Landlord wants the tenancy to end. There are two types of Section 25 Notice that the Landlord could serve: one suggests a new tenancy on different terms and the other initiates the termination of the tenancy.

The Landlord can oppose a tenancy on seven grounds (A-G), which are stated in Section 30(1) of the LTA 1954 and are set out below:

Tenant’s failure to repair
Persistent delay in paying rent
Substantial breaches of other obligations
Alternative accommodation
Subletting of part, where higher rent can be obtained by single letting of the whole building
Landlord’s intention to demolish or reconstruct which cannot reasonably be done without obtaining possession
Landlord’s intention to occupy the holding for his own business or as a residence

Where the Landlord serves a Section 25 Notice opposing a new tenancy, the Tenant may be entitled to compensation if it is on the grounds of E, F or G of Section 30 (1) of the LTA 1954. Statutory compensation is calculated on the rateable value of the premises. If the Tenant has been in occupation for more than 14 years, the amount of compensation is twice the rateable value. For less than 14 years, the compensation is 1x the rateable value.

If the Tenant does not respond to the Section 25 Notice that is served, then the tenancy will either continue on the Landlord’s proposed new terms or the tenancy will end on the specified date.

Either the Landlord or the Tenant can suggest a new tenancy. If the Tenant wishes to request a new tenancy, they would serve a Section 26 Notice within 6 to 12 months of the end of the term. If the Landlord opposes this request, they must respond within 2 months with a counter-notice, specifying the grounds on which it is opposed.

However, if the Landlord has already served a Section 25 Notice, the Tenant cannot serve a Section 26 Notice but instead would have to reply to the Landlord. Similarly, a Section 25 Notice cannot be served on the Tenant if the Tenant has already served a Section 26 Notice.

Bradley-Mason LLP are an established Chartered Building Surveying practice with a wealth of specialist commercial property, Building Consultancy and Building Compliance expertise to put at our clients’ disposal, wherever their commercial property assets and interests may be based in the UK or Europe.

In conjunction with our expert advice and guidance regarding the design of new property and/or the condition of existing properties, we are able to advise on a variety of legal and practical issues impacting our clients’ individual business needs.

For more information or to discuss your specific property requirements, please get in touch with our Head Office in Harrogate / North Yorkshire or one of our regional UK offices in London, Manchester, Sheffield or Bristol.

UK Government’s Recent Announcement to Close 50 Asylum Hotels

Posted on November 9, 2023February 28, 2024 by bradley.mason

Our Experience in the Hospitality, Leisure, and Tourism Industry

With the UK Government’s recent announcement that the first 50 asylum hotels are to close by the end of January following the end of their contracts, there is now a desire to refurbish and reopen these hotels to the public. These hotels have played a vital role in housing asylum seekers; however the Government has taken the decision to start the process of closing them. Bradley-Mason LLP offers a range of advice and expertise around this and within the hotel sector in general. With strategic advice we combine our dilapidations skills with our knowledge of hotels to get the best results for our clients.

Bradley Mason have acted as consultants for private clients on a number of UK, European and worldwide hotels for investment, building consultancy and acquisition purposes. With our 20^th year of business fast approaching we have amassed a great deal of experience offering our wide range of specialist services across the leisure and tourism industry. When operating a hotel, we understand that maintaining the physical condition of your property is paramount. With our expertise in a range of building surveys, dilapidations and building defect investigations we can help to solve a variety of property-related issues.

We have previously been engaged to undertake a building investment survey of a 770 bed hotel in Frankfurt, Germany. Our investment survey concentrated on the general standard and condition of the building and noted any principal defects and shortcomings which could have affected the investment interest. More recently we have undertaken a survey for a hotel dating back to the 1860s occupying a prominent position fronting the River Amstel. As part of the survey, we worked alongside an experienced mechanical and electrical consultant which allowed a further, usually hidden, dimension of the property’s condition to be assessed.

We have an understanding of various legislative controls throughout Europe and by working with regional architects have offered advice on the acquisition and also subsequent occupation of a number of substantial hotels in such locations as the Netherlands, Cambodia and Laos. Our reports provide clear, concise advice and strike a fine balance between detail and length with enough precision so the problems can be understood and remedied.

DISCLAIMER: This article is for general information only and not intended as advice. Each project has its own set of unique circumstances, all potential issues should be investigated by a surveyor on a case by case basis before making any decision.

Overview of HM Land Registry Title Plans and their Features

Posted on November 2, 2023February 28, 2024 by bradley.mason

Land Registry title plans are a crucial document in both commercial and residential properties for officially recording the details of a property and ensuring the property’s rights are accurately documented. Since 2003 it has been law for the plan to be compliant with the Land Registry guidelines. A plan comprises of a detailed scaled drawing that outlines the specific area of the property or premises being included in a transaction. In a commercial property, the title plan can often break down specific areas of larger buildings or complexes which are being sold or leased.

Title Plan Submission

The Land Registry requires the submission of a title plan in various situations, including:

• Registering a property for the first time.

• Since 2003 it is the law that any new lease longer than 7 years must be registered.

• Transferring the ownership of a property.

• When dividing a property into multiple plots.

• May be required when applying for planning permission to show the exact location of the property.

For the plan to serve its purpose it must include several important features:

• Defining the Subject Area – The plan clearly defines the area of the premises subject to the lease. This can include office, warehouse and retail space, or other parts of the building or wider external areas that the Tenant is taking control of.

• Measurements and Scale – The accuracy of the plan can be crucial in disputes and denoting the lease area in terms of its floor space. This can also be important in calculating business rates for the property. The preferred scale of the drawing is often 1:1250 or 1:500 for properties in urban areas and 1:2500 for properties in more rural areas. Each plan must show sufficient detail so it can be identified on an Ordnance Survey map.

• Orientation and Level of the Property – The plan should clearly show the orientation of the property, typically north, to help further identify it. The level of the property should also be noted which is especially important when the property covers several floors.

• Common Areas and Rights of Way – Coloured lines are used to detail the leased area and any areas shared by multiple Tenants, such as hallways and car parks. Rights of way must also be clearly defined on a land registry-compliant plan. There are no specific colours required on the plan, however, it is common for red to denote the leased area and blue or brown to identify communal areas and rights of way.

In summary, a title plan provides a visual representation of the areas of a property. It documents important features and plays a crucial role in defining and documenting the sold or leased space, and as a legal document can hold up in a court.

Figure 1: Example lease plan

Reinstatement Cost Assessments – The Pitfalls of Online Calculators!

Posted on September 25, 2023February 28, 2024 by bradley.mason

We recently carried out a Reinstatement Cost Assessment (RCA) of a small industrial estate comprising of six self-contained units with a gross internal floor area of 903m² and an external area of 237m². The terraced building is of a steel portal frame design with brickwork to mid height and profile metal cladding above all under an asbestos cement roof covering. The estate benefits from a large concrete service yard at the front and is bounded by a combination of palisade fencing and brick masonry walls. There is also an operational railway line running parallel to the rear site boundary.

We were commissioned to undertake an assessment of the property by the Landlord but unbeknown to them a separate assessment had also been requested by their Managing Agents using a popular online cost assessment calculator.

Based on a Day One insurance basis, we assessed the total declared value to be £1,494,289.75. The online cost assessment totalled £1,165,509. The online assessment includes a number of assumptions and fundamentally, failed to identify the presence of an asbestos cement roof covering and the operational railway line at the rear.

If the Landlord was to choose the online assessment to reduce their annual insurance premium, the reality is that they could be underinsured by £328,780.75 or 78% of the true rebuild value. If they were then to make a small claim for say fire damage amounting to £250,000.00 and the insurers were to apply an ‘averaging clause’ then they could potentially only pay out 78% of the £250,000.00 (£195,000.00) leaving a deficit of £55,000.00.

Whilst the online cost assessment was significantly cheaper, three times in this instance, most commercial Leases include provision to recover these costs. Our RCA calculation sheets include a mechanism to calculate adjustments at the next insurance renewal date using the Tender Price Index (TPI) which will automatically adjust the figures to account for inflationary effects etc. This can be done for a three-year period as recommended by the RICS before a new RCA would need to be prepared. We offer this service free of charge, so on that basis, our fee to undertake an RCA can be spread over a three-year period which makes us comparable to an online service without the potential risk of being underinsured.

So please think carefully before choosing online assessments and make sure that you have read and fully understand the small print. If in doubt check with your insurers or get in touch with us here at Bradley-Mason LLP.

A Guide To Brick Bonds

Posted on August 14, 2023February 28, 2024 by bradley.mason

What are Brick Bonds?

Brick bonds are how bricks are arranged within a wall and can provide a decorative finish to what can be one of the main components of a building. Across the many types of bonds that can be used to build a wall, the test of time has rendered a few favourites in terms of their integrity and decorative appeal. The Stretcher Bond offers simplicity, while the Flemish Bond showcases intricate alternating patterns. The English Bond provides superior strength as the stack bond relies on its ease of laying and reinforced internals to give it its uses in buildings.

Stretchers are the brick’s longest edge whereas the shorter edges are referred to as headers. Below we will discuss some common bonds and their key characteristics:

Types of Brick Bonds

Stretcher Bond:

This is where only stretchers are laid, offset by half a brick in each course. This bond is the most common in the UK and is often found on either side of a partition wall, bound together by wall ties. Stretcher Bonds appear uniform and are easy and fast to lay. Because they are only one brick thick, they often take the form as a facing layer to buildings, this helps reduce costs as cheaper and less aesthetic materials can be used on inner layers. The downside to this bond is its lack of strength. With it only being one brick thick it struggles to maintain its stability as the wall gets higher, this is why wall ties are used.

English Bond:

The English Bond is one of the oldest types of bonding and is still used for its noticeable appearance to this day, however now regularly the headers are only half thickness. This bond consists of alternating courses of headers and stretchers giving it superior strength and load bearing capabilities. There are often decorative additions to this bond, for example a different colour can be used to highlight a diamond shape within the brickwork.

English Garden Wall:

This bond consists of one course of headers for every three courses of stretchers, again giving it a distinct and unique pattern. The English Garden Wall allows the use of less facing bricks and in turn means there is less need for every brick to be perfect.

English Cross Bond:

Largely the same as the English Bond, however every other course is offset by half a brick’s length. This provides further strength to the English Bond by moving the lines of pointing further away from each other.

Flemish Bond:

The Flemish Bond moves away from separate rows of headers and stretchers and combines them into one course. Each consists of alternating headers and stretchers with the course below offset so the header of the below course meets the centre of the stretcher on the above course. The Flemish Bond first appeared in the UK in the 17th century and is now synonymous with the Georgian era.

Flemish Garden Wall:

This bond is closely related to the Flemish Bond, with three stretchers in between each header instead of just one. Like the English Garden Wall, the Flemish Garden Wall Bond results in fewer facing bricks while maintaining the intricate and appealing bond.

Monk Bond:

Similar to the Flemish Garden Wall there are only two stretchers in between each header with the Monk Bond. The headers are central to the gap in between each pair of stretchers making for another decorative and strong bond with no crossing of the pointing in between each brick.

Header Bond:

Back to a simple bond, the Header Bond consists of layers of headers each offset by half a brick. This provides greater strength and stability than a Stretcher Bond due to its double thickness however this does use the most facing bricks owing to how short each face is.

Stack Bond:

Finally, the simplest, but weakest bond is the Stack Bond. This is layers of stretchers all stacked in line. This offers simplicity and uniformity but is the weakest of all the bonds. To improve its load-bearing qualities this bond is often combined with metal wire in between each joint.

Conclusion

It is clear each bond has their own qualities and downfalls in terms or aesthetic appearance and strength. Historically each bond gives a nod to an era of buildings defining them and giving them character. As we progress further into modern methods of construction, the strength of each bond may become obsolete as we commonly only use them as facing layers.

An Introduction To Dilapidations

Posted on May 25, 2023June 25, 2024 by bradley.mason

What are Dilapidations?

Dilapidations is the term normally used for repairs required under a Lease. Most commercial Leases in the UK place an obligation on the Tenant to undertake a variety of repairs, decoration and other express covenants which may include complying with Legislation, cleaning the Premises or reinstating any alterations at the end of the Lease. Dilapidations is the term generally used for the works which a Landlord asks a Tenant to undertake either during the term, or at lease end.

The Difference Between Residential and Commercial Tenancies

In the UK the main difference between most residential and commercial agreements is that typically a Landlord would be responsible for the repairs to a residential property and the Tenant would be responsible for repairing a commercial demise. The exact terms of this are dependant upon the terms of the Lease, which is the Contract between the Landlord and Tenant. The basic legal principles of any Dilapidations Claim is therefore based on Contract Law.

Record of Condition

There is often a requirement to record the condition of a building either prior to a Lease or before some construction work or access onto a property is made. This is often referred to as Dilaps or Delaps although this would normally be called a Schedule of Condition. This is a detailed record of the condition of the building and when used in a Lease can be very useful to limit a Tenants liability at the end of the term or illustrate works a Landlord is claiming.

What is a Schedule of Dilapidations?

A Schedule of Dilapidations is the document which the Landlord would prepare to identify the works required by the Tenant. This would typically identify why the Tenant is in Breach of the Lease, what Lease clauses they should comply with and the works a Landlord considers are necessary. In some cases the Landlord may advise the Tenant of the cost of these works. If served during the Term this is known as an Interim Schedule of Dilapidations, or in some cases a Repairs Notice. If the Lease is about to end the document may be called a Draft Terminal Schedule of Dilapidations, and if the Lease has ended then the Landlord would be making the claim for Terminal Dilapidations. The final claim is also known as a Quantified Demand.

Interim Dilapidations

If a Landlord is concerned over the condition of their property then under most modern Leases a Landlord can undertake an inspection, assess whether the Tenant is complying with the terms of their Lease and issue a Notice on the Tenant. Depending upon the wording of the Lease, the Landlord may issue a Section 146 Notice or a Simple Repairs Notice which the Tenant must comply with. In some cases if the Tenant does not comply, the Landlord can enter the property, undertake the work and claim back the cost from the Tenant.

Does the Landlord Have to Serve a Schedule of Dilapidations?

Overall there is no obligation on the Landlord to remind the Tenant of the works they should undertake under a Lease. It is the Tenants responsibility to read the Lease and undertake the works required by their Lease. Under most Leases, a Tenant is required to reinstate any alterations they make and in some cases a Landlord must notify the Tenant if they require reinstatement. This is not always the case and the Lease will often place the obligation on the Tenant to reinstate any alterations they have made.

How do you Assess the Standard of Repair?

This is something a lot of Tenants are unsure over, in particular if they are undertaking the work. The wording of the Lease will typically state the extent and quality of works required and in some cases this may be limited to the condition shown in a Schedule of Condition, which would record the state at the start of the Lease. The age and character of the building is also important as the standard of repair on a new property may vary from a short term Lease on an older site, which may have been let many times. A basic principle which is often followed is that a Tenant is required to undertake the repairs, to a standard which would be acceptable to a reasonably minded Tenant, having regard to the “age, character and location of the property”, on Lease commencement.

How do you Know What Work to Undertake?

Hopefully most Landlord’s would be helpful in advising the Tenant of the works which they consider needed by the end of the Lease. In some cases a Landlord must notify the Tenant if reinstatement of alterations are required and in some cases the colour of decoration, the type of carpet or similar must be agreed with the Landlord. If a Tenant is unsure or requires more detailed advice then it can be useful to prepare a Dilapidations Assessment. This can be prepared by a Chartered Building Surveyor and it would be similar to a Schedule of Dilapidations. It would review the Lease, consider the Tenants obligations, assess the condition of the building and suggest the works which may be required. This could be useful if a Tenants requires an early indication of work required. It is also very useful to provide a future Dilapidations budget, in particular if required for accountancy purposes, where under FRS102 a Dilapidations Assessment may be required by Auditors to provide future provision in companies accounts.

Dilapidations Procedures

Procedures should be followed by both Landlord’s and Tenants when dealing with Dilapidation’s. In particular the Royal Institute of Chartered Surveyors provide useful guidance in the form of the RICS Guidance Note, Dilapidations in England and Wales, 7^th Edition. It is also important to follow the Dilapidations Protocol, which is the Pre-Action Protocol for claims for damages in relation to the physical state of a property and this is published by the Property Litigation Association.

What do you do if you Receive a Claim from the Landlord?

Whether received during or after a Lease, the first step would be to check the terms of your Lease or similar agreement to establish if you are liable for the property and the parts claimed. It may be useful to refer to a Chartered Building Surveyor for further advice. If the Lease has ended then the Dilaps Protocol requires the Tenant to respond to the Landlord within 56 days, otherwise they may incur penalties if the Claim proceeded to Court.

The further defence and negotiation of Dilapidations can be a difficult and protracted process and we would recommend the advice of a Chartered Building Surveyor at all stages of this process.

Author: bradley.mason

Commercial Surveyor Services