Space Strategies and Legislation - Admission/Application Essay Example

Space strategies and legislation Introductions The legislations on commercial property have many provisions that are designed to control health and safety, termination of tenancy, repair, accessibility of occupiers, property alterations, seeking of damages, imposition of duty of care, among other issues that bide the relationship between landlord and tenant (see Appendix I). The current case analysis involves Pain Estate (the landlord) and Youens Finance Ltd and Soundzone (tenants). This paper is an advice to the landlord (Pain Estate), regarding their legal obligations, particularly concerning dilapidations, asbestos, Health safety matters of Equity Act, and fire safety issues. Advice to Pain Estates Plc – the landlord In most cases, dilapidations legislations require that the tenant, mostly in commercial leases, take the responsibilities of the property’s physical maintenance. However, as a landlord, Pain Estates Plc should not allow the property to get to a state of disrepair in the course of the lease since there is no assurance that there will be a solution during the terminal dilapidations; in this sense it is laudable that Pain Estates Plc has decided to institute an interim Schedule of Dilapidations. Since the remaining term of lease is more than 18 months, Pain Estates Plc is acting within law by serving an Interim Schedule of Dilapidations on Youens. This interim schedule will help in identifying possible breaches of lease and essential works, hence institute the necessary remedy before the expiry of the lease. Nevertheless, Pain Estates Plc should keep it in mind that the remedies available will depend on the specifications of the term of the lease. In view of this, the landlord should take into consideration the statutory limitations on what action they can take while the lease is still in force, but they should also not fail to contemplate on the practicality of their actions. The fact that the last time any works of maintenance to the building were carried out was in 2008, could imply that Youens Finance Ltd have breached their covenant; considering that they were bound to undertake the maintenance as per the lease terms. If that is the case, Pain Estates Plc is entitled to claim damages for the breach of such a covenant. Even so, the landlord’s right to damages is restricted by the Leasehold Property (Repairs) Act 1938 (Burn and Cartwright, 2011). According to this Act, since the lease was for a term that exceeds seven years, and it is more than three years to the end of lease, the landlord can claim for the damages provided they serve the tenant with a properly drafted section notice; but within a period not less than one month to the action period. Nevertheless, the landlord should not forget that the tenant has the right to serve them with a counter-notice, upon which consent of the court can be obtained in order to proceed with the claim of the damages. However, Pain Estates Plc should keep in mind that the amount they can successfully claim as damages from the tenant is restricted by section 18 (1),1 which stipulates that the maximum that the landlord can recover is the reduction in value of their interest in the property (Lesar, 1960). Since the lease in question will be in force for several years to come, before its 15 years expires, it will be very difficult for the reduction in value of the landlord’s interest in the property to be determined. In this view, Pain Estates Plc might find it extremely difficult to claim damages while the lease is still in force – possibly this will not be a good option to pursue. Nevertheless, if the claim is successfully instituted while the lease is still continuing, the landlord should not forget that the amount of recovery will only be awarded at the end of the lease term. Also importantly, the landlord needs to consider that an early damages claim will most likely stall the repair work, and perhaps deteriorate the property’s condition. Evidently, the decision by the landlord to undertake the repair and later on recover the costs from the tenant has many advantages, though all the legal implications must be carefully considered to avoid dismissal of the costs recovery by the court. A good example of a law case that can be referred to in this scenario is Ravenseft Properties Ltd v Davstone,2 where the tenant inferred the doctrine of inherent defect, which is concerned with the lack of liability for disrepair as a result of the propertys own inherent character (McQueen, 2013). This doctrine provides that a repairing covenant excludes repair of defects that results from the original design (inherent defect). On this perspective, Pain Estates Plc should be ready to face possible defense from the tenant, based on the fact that they are not liable to pay the cost of the repair because it is meant to remedy an inherent defect. Nevertheless, since the court will also apply the test of fact and degree in its determination of whether the repair work falls within the realm of a repairing covenant, the landlord should not worry so long as all legal procedures are strictly adhered to (Landes, Posner and Landes, 2009). In this regards, in Pembery v Lamdin,3 when dealing with repair work resulting from inherent defect, the matter is treated as one of degree. Therefore, as long as the alterations in respect of refurbishment works requested by Youens Finance Ltd do not amount to changing the nature of the building (such that they cannot be reasonably withdrawn from the ambit of repairing covenant), the tenant would not succeed in obtaining a relief. In order to leverage their case and recover the entire costs, the landlord can argue that the repair work forms a minor part of the whole property, and that the costs of repair is small compared to the value of the entire property. The other course of action that the landlord can take is to forfeit the lease. This option will come in handy if, for any reason, Pain Estates Plc wants to get their property back; hence bringing the lease to halt. In this case, Pain Estates Plc should bear in mind that this option cannot be practicable if the lease does not contain an express right of re-entry for infringement of agreement (Hatfield, 2012). However, most commercial leases contain this provision, thus it is unlikely to be an obstacle towards pursuing forfeiture (Hatfield, 2012). Since the possible breach (as discussed earlier) is of disrepair, will run for more than three years to come, and was granted more than 7 years ago, the landlord must follow the same procedures as for claiming damages. However, it is essential for the landlord to note that it will only be possible to forfeit the lease (in the event that the tenant serves a counter-notice) when the court’s permission is sought (Low, 2012). Even if the tenant does not serve a counter-notice and/or the court’s permission is not granted, the Landlord should desist from pursuing forfeiture because doing so will effectively allow the tenant to obtain a relief (Kennedy, 2013).). As revealed in Associated British Ports v C H Bailey plc,4 it is very important that the landlord estimate the possibility of successfully pursuing forfeiture, following an interim schedule of dilapidations. This is because, in case the landlord fails to prove the case, then the tenant is entitled to a relief through dismissal of the application. Therefore, the landlord must consider the fact that the court may finally grant relief to the tenant, besides heavy costs being incurred in the course of the proceedings. Therefore, pursuit of interim claims through forfeiture may not be a very prudent course of action. Seeking specific performance would also be a suitable remedy for the landlord. Specific performance is whereby the court orders the tenant to perform his or her obligation (Giles, 2012). However, this being an equitable remedy, the court can only awards it if damages are not a sufficient remedy (Hatfield, 2012). In Pursuant to a clause referred to as Jervis v Harris, if the landlord cannot compel the tenant to undertake the repairs in the course of the lease’s term, they can discharge their right of forceful entry into the property and carry out the repair, then recover the cost from the tenant thereafter (Cooke, 2003). Rather than recovering damages, this remedy will allow Youens Finance Ltd to recover cost in form of a debt from Youens Finance Ltd. Incidentally; the landlord will be able to recover the actual costs from the tenant without being bound by section 18(1) restrictions, which are applied to damages (Cooke, 2003). Furthermore, it is quick and easier to claim a debt as opposed to claiming damages, so the landlord should actually not disregard this course of action as it gives them a lot of leverage. However, Pain Estates Plc should be very cautious because, if forceful entry is applied, they take the burden of arranging for the works of repair, which must be done with care. If, for instance, the landlord does not serve the notices properly and in accordance with the law, the tenant may find good grounds to challenge them for breach of the quiet enjoyment of the property and trespass (Cooke, 2003). Another legal aspect that the landlord needs to pay attention to is the fact that the cost of repair will be borne by the tenant or not depends on whether the work falls within the requirements of the repairing covenant. The determination of what was included in the covenant can also be found in Pembery v Lamdin ,5 where the judge made reference to Lord Esher MR’s judgment in Lister v Lane,6 deciding that: Applying that to a landlord, in the same way as it is in that case applied to a tenant, if the claim here made by Mrs Lamdin be correct, she is entitled to receive at the hands of this landlord a different thing from that which she took when she entered into the covenant. She took this old house with a cellar without any waterproof protection, and she is asking the landlord so to repair that house as to give her a cellar which has a waterproof protection and is dry. That is not a right which she can possibly maintain, because the obligation of the landlord is to repair that which is demised, and not to give her something much drier in its nature than that which was demised (Dilapidations Case Summaries, p. 7). Regarding the issue of asbestos, the landlord has to adhere to the duties imposed by the Control of Asbestos regulations 2012,7 which was enacted to help reduce death toll from diseases associated with asbestos in the UK. This law requires the landlord to keep records related to asbestos and avail them to those who should reasonably access them, and also carry out risk assessment, among others. Technically, the duty to maintain asbestos records is done in form of a register, as defined in regulation 4 (Vaughan, 2012). Therefore, Pain Estates must understand that it is their responsibility to identify and manage the hazard that might emanate from their property. The fact that building’s flue was found with asbestos lining is likely to result to a charge against the landlord, in which case the court will determine if indeed Pain Estate has taken reasonable measures to identify the substance, and whether they have assessed its nature and communicated any relevant information to all concerned parties. Now that Soundzone is contemplating of seeking a legal action against the asbestos exposure, the burden of proving that the above mentioned measures have taken lies in the property-owner. Even if it is established that proper measures have not been taken, before the landlord is held responsible, the court will have to determine whose failure it is, by assessing the terms of the lease, the form and location of the asbestos. For example, the mere presence of asbestos in a property does not impose an obligation on the property-owner to remove them, so long as they remain undisturbed. However, on the other hand, the landlord might be held liable even if the asbestos have remained undisturbed, when the provisions of Health and Safety at Work are invoked (Hervey and McHale, 2004). It is also very important that the landlord consider the manner in which the tenant carried out exploratory opening up of the chimney (if it is the tenant does it independently), and in case relevant legal guidelines are not followed they should bring charges against them for breach of covenant of the lease. If it is established that the tenant violated any of the stipulated guidelines, the landlord can recover the cost of removal from the tenant (Hervey and McHale, 2004) The duties arising from the management of asbestos during the lease term can be referred from Quick v Taff-Ely Borough Council,8 where it was resolved that for there to be a breach of covenant to keep in good condition or in repair, the property in question must have depreciated from a previous physical condition. This means that the mere existence of asbestos in the property does not hold anyone to the breach of lease covenant, even though such substances pose danger. Technically, the substance must have actually deteriorated from the state the state they were found (if they were, by then, found) when the lease started. Nevertheless, for the landlord to be relived of responsibility for lack of evidence to show that the asbestos have deteriorated since the commencement of the lease, there must be sufficient evidence that the property have been properly maintained. Regarding the removal of the granite steps from the street level to the entrance hall to enable the tenants’ disabled clients and visitors to access the premises, the landlord should pay attention to the provisions of The Equality Act.9 This Act “covers covers discrimination because of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation” (Equality Act 2010 Code of Practice, p. 21). If the removal of the stated infrastructure from the building is not in the interest of the landlord, then consent can be withheld if there are reasonable grounds in that respect. For example, the landlord can argue that the adjustments will cause significant and a permanent reduction in the value of the property. In addition, the landlord will be acting within law if granting the adjustments on behalf of Soundzone would cause inconvenience to other tenants (Youens). Most likely, the removal of the granite steps from the street level to the entrance hall is a reasonable adjustment, which can hardly affect the landlord’s interest in the property; hence it would be unreasonable to withhold consent, unless they have a very strong evidence to prove otherwise. Pain Estates should also be aware of the rules under Disabilities Discrimination Act,10 which is likely to have implications on the buildings adjustments when the property is rent out to disabled tenants or occupiers. However, the landlord can only abide by this law if the property’s adjustments are essentially linked to the tenancy. This requirements means that Pain Estates will have a very strong defense, because they would want to argue that the tenant does not pursue the building’s adjustments because they are disabled, but because they want to serve the interest of their disabled clients; this act does not protect the clients of the tenants. Finally, the landlord must bear in mind their legal responsibility in respect to fire safety issues. Just like an employer, Pain Estate has a legal obligation to take measures to protect the property’s occupiers from fire hazards. The law requires that the landlord undertake fire risk assessment in order to identify all potential risks, and undertake appropriate measures to curb or reduce such risks. The area of law that covers fire safety includes the Housing Act11 and the Regulatory Reform (Fire Safety). 12 Conclusion This paper has pointed out the legal issues that the landlord should pay attention to, especially in order to get a fair deal with regards to the application that they have been served by the tenant. While it is clear that the landlord can decide to undertake the repair and later on recover the cost from the tenant, it is very important that Pain Estate strictly follow the legal procedures so the tenant is not granted a relief. Although asbestos have been discovered from the building, this is not a straight forward case against the landlord. This is because the court will have to determine several perspectives before ruling whether the landlord is answerable, including the terms of lease, the form and location of the asbestos. The issues of making adjustments to the building so that the tenants’ clients can access the building would most likely not hold water because the law does not impose obligation on the landlord to make adjustments on behalf of the tenant’s clients, but the tenants themselves. Finally, it has been established that the landlord has a clear obligation to undertake the building’s risk assessment to avert risk of fire. A summary of the most essential laws that are associated with Pain Estate’s obligations are illustrated in Appendix I. Bibliography Books and articles Burn, E. H., & Cartwright, J. (2011). Cheshire and Burns Modern law of real property. Oxford University Press. Cooke, E. (Ed.). (2003). Modern studies in property law (Vol. 2). Hart Publishing. Dilapidations Case Summaries, n.d. [online] Available at: < http://www.lawlectures.co.uk/law3/Documents-Law3/Dilapidations-Case- Summaries.pdf> [Accessed 1 January 2015]. Giles, et al. (2012). Non-Legislative Commission on the Study of Landlord-Tenant Laws Report to Governor Mike Beebe, President Pro Tempore of the Senate, and Speaker of the House December 31, 2012. Hatfield, E. (2012). Is specific performance an option for landlords?. Solicitors Journal, 156(42), 12-13. Hervey, T. K., & McHale, J. V. (2004). Health law and the European Union (p. 45). Cambridge: Cambridge University Press. Kennedy, D. (2013). Some Caution about Property Rights as a Recipe for Economic Development. Law and Economics with Chinese Characteristics: Institutions for Promoting Development in the Twenty-First Century, 187. Landes, W. M., Posner, R. A., & Landes, W. M. (2009). The economic structure of intellectual property law. Harvard University Press. Lesar, H. H. (1960). Landlord-Tenant Relation in Perspective: From Status to Contract and Back in 900 Years, The. U. Kan. L. Rev., 9, 369. Low, K. F. (2012). Certainty of Terms and Leases: Curiouser and Curiouser.The Modern Law Review, 75(3), 401-412. McQueen, J. (2013). Landlord and Tenant Law. Straightforward co Ltd. Vaughan, S. (2012). The Toxic Substances Control Act: A Practical Guide. By MIRIAM V. GOLD and JEAN WARSHAW. Journal of Environmental Law, eqs024. Equality Act 2010 Code of Practice. Employment Statutory Code of Practice. [online] Available at < http://www.equalityhumanrights.com/sites/default/files/documents/EqualityAct/employer code.pdf>[Accessed 1 January 2015]. Case laws and legislations Associated British Ports v C H Bailey plc [1990] 1 EGLR 77 Control of Asbestos regulations 2012 [CAR12] Disabilities Discrimination Act 2005 Housing Act 2004 Landlord and Tenant Act 1927. Lister v Lane [1893] 2 QB 212, CA Pembery v Lamdin [1940] 2 All ER 434, CA Pembery -v- Lamdin; CA 1940 Quick v Taff-Ely Borough Council [1985] - Ravenseft Properties Ltd v Davstone (Holdings) Ltd [1979] 1 EGLR 54 Regulatory Reform (Fire Safety) Order (2005). The Equality Act 2010 APPENDIX I Legislation Summary Construction (Design & Management) Regulations 2007HYPERLINK "http://www.dilapidationsdirect.co.uk/PDF/Construction(Design&Management)Regulations2007.pdf" \t "_blank"(pdf) Legislation designed to integrate health and safety into design, construction and managment of building projects. May apply to remedial works required under the terms of a lease or works undertaken by Landlord at termination of lease. Appointment of planning supervisor may be a legitimate cost incurred by the Landlord. Control of Asbestos at Work Regulations 2006 Imposes duty on those responsibility for repair and maintenance of commercial properties to prevent exposure to asbestos. Frequent impact on Dilapidations Claims. Criminal Law Act 1977 Legislation outlawing the threat or use of violence during the repossession of a property Defective Premises Act 1972 Section 4:- Imposes duty on Landlord with responsibility for repair to ensure safety of all persons who may be affected by defects. Disability Discrimination Act 2005 Obligation on occupiers to provide reasonable access for those with disability. Frequent impact on Dilapidations Claims. Health & Safety at Work Act 1974 Health, Safety and Welfare in connection with work. Frequent impact on Dilapidations Claims. Housing Act 1961 Section 32:- Repairing obligations in short leases of dwelling houses. Landlord & Tenant Act 1927 Section 18:- Limitation on Landlords claim to the diminution in the reversionary value. Section 19:- Landlords permission to alter building should not be unreasonably witheld where the lease limits alteration without licence or consent. Landlord & Tenant Act 1954 Part II:- Security of tenure in relation to business tenants. Section 25:- Notice required by Landlord to terminate a tenancy. Landlord & Tenant (Covenants) Act 1995 Modifies Law in relation to lease liabilities. Main effects on leases after January 1996. Land Registration Act 2002 Requirement to register leases at Land Registry. Leases granted prior to 13th October 2003 for a term of more than 21 years and leases after this date of more than 7 years require registration. Law of Property Act 1925 Section 146:- Prescribed notice to be issued by Landlord prior to foreiting lease or seeking damages. Leasehold Property Repairs Act 1938 Limits Landlords rights to fofeit lease or claim damages where the lease term is 7 years or greater and at least 3 years remain. Limitation Act 1980 Time limits claims for breach of repairing obligations. Limitation of 12 years for Leases signed under seal (except 6 years for non-payment of rent). Limitation for all other leases 6 years. Occupiers Liability Act 1957 Imposition of duty of care for safety of visitors. Onus can fall on Tenant or Landlord depending on who is responsible for repair and maintenance. Occupiers Liability Act 1984 Extension of 1957 Act detailed above. Protectiion from Eviction Act 1977 Limits rights to forfeit leases of dwellings other than by formal proceedings. Rent Act 1977 Sets out obligation on tenants to allow access to Landlord to carry out repairs. Read More