UK law and Proactive Management - Essay Example

Discuss in detail how a landlord can protect his rent flow during the property cycle” Using UK law and Proactive Management In the current market, the landlords are faced with the challenge of protecting their rent flows due to the changing environments. On one of the options for the landlords is to insist on the use of the onerous provisions in the commercial leases. This however will have very negative repercussions to the landlord when the rent reviews are done. Landlords may refuse to use the flexible system because the rent may be market prices that provide the standard rents (White, 2010).

The formulation of the lease agreement is very important for the landlord to manage the landlord to manage the rent flows. According to the tenant Act of 1927 and the land lord and tenant Act of 1988, the lease agreement can be done by absolute prohibition, qualified restriction and absolute qualified restriction. The absolute prohibition is enabling the landlord and the tenant to create variations in the lease agreements. On the other hand, the most common method of developing effective leases is the absolutely qualified restriction.

This is because it requires consent is should not be withheld. According to the property Act of 1952, a lease agreement can only be done by deed especially is the lease is over three years. On the other hand, under the 54 law of property of 1925, it is possible to have a lease for less than three years based on the written or oral agreement with the tenants. So that a landlord does not lose money, such an agreement should best when the rent to be paid is reserved. In order to deal with tenants, the license needs to include the major concern in the license agreements.

Some of the concern that should be included in the licenses includes the protection of the structural integrity of the building, having agreements that will attract good clients and establishing the management system that does not reduce the value of property. Since the actual term on the lease are normally included on the hypothetical lease agreement, making the actual lease more onerous does not only make the lease less attractive to the prospective person that need to rent the house leading to a further lowering rent that they are prepared to pay.

Most of the time, the tenants would narrow the user provision indicated on the lease agreement so as to pay less rent (Commercial Property Professional Group, 2007). The estate manage can consider including the permitting a wider use of the premises so as to reflect the opportunity value to the landlord. According to the Land lord and tenant Act of 1927, after the lease is established, the tenants cannot change the use of the premises without the consent of the landlord. This means that the landlord has a right to refuse consent for change in the use of the premises.

For example, when the word unreasonably withheld is omitted on the lease, the applicable clause would mean that the use of the premises is restricted in advance based on the rent that is paid. But to enhance the rental value to the land lord, the lease need to expressly indicate that consent would not be withheld. This is important for it will entitled the landlord to values the premises on the most profitable used so that consent would not withheld. According to the British property federation, it is recommended that landlords consider allowing the letting the houses below the standard passing rent to ensure continuous flow of the rent so long as the under lease rent is not below the market prices.

To enhance the attractiveness of the premises to the prospective tenant, it is necessary to use the flexible lease agreements so that the tenants will not only be able to make changes to the premises business but also easily assign the premises to the business owners. Bibliography White, A. 2010, Asset management, commercial property journal, p.130-133. Commercial Property Professional Group, 2007, Service charges in commercial property RICS code of practice, Commercial Property Professional Group of the Royal Institution of Chartered Surveyors.