Commercial Leases – A Surveyors Guide by Edwin Bannister
Published by Field Fisher Waterhouse & RICS
This describes itself on the back page as a surveyor's ultimate companion to commercial leases, providing straightforward advice, which we would agree with. It says it uses practical flow charts (we didn't see too many of these), checklists and selecting drafting examples (these we thought were good), an overview of the principal terms of commercial leases and, most importantly for us, it sets out approaches to negotiating lease terms and finds solutions to various legal issues, as we feel negotiation skills are such an important part of this process, which we will also be looking into on this dilapidations website.
The format is nicely balanced, with a good mixture of chatty sections, bullet points, some of which are highlighted in a dark grey block, just in case you don't realise they are more important and which have a boundary drawn around them. This mixture of methods of passing the information over works very well for ourselves (although we have to say we didn't see too many flowcharts and no pictures) and whilst there is a table of cases at the front, together with a surprisingly long list of Acts, Statutory Instruments and abbreviations, the cases are referred to in passing in their relevance rather than a case being explained in full.
The book cover says Edwin Bannister is a solicitor and a partner in Field Fisher Waterhouse LLP with over 20 years of experience and he is also a member of the City of London Law Society, Land Law Committee and on the contributory board for the Property Law Journal. We would add that he writes a very readable book and we would recommend it.
Chapter 1: Introduction
Chapter 2: The Property
Chapter 3: Lease Terms
Chapter 4: Rent Outgoing and Other Payments
Chapter 5: Rent Review
Chapter 6: Service Charges
Chapter 7: Insurance
Chapter 8: Repairs, Decoration and Dilapidations
Chapter 9: Alterations
Chapter 10: User
Chapter 11: Transfers under Leases and Other Dealings
Chapter 12: Planning and Statutory Matters
Chapter 13: Security of Tenure
Chapter 14: Termination for Breach
Chapter 15: Recovery of Rent
Chapter 16: Miscellaneous
Chapter 3: Lease Terms
We have a particular interest in break clauses at the moment. This section gives an example of a break clause and also comments that each law firm has its own way of drafting these clauses! This is part of the problem of break clauses.
General Points and Pre-Conditions and Material Compliance
This is very interesting, particularly the point about meeting your pre-conditions of the break clause and even a minor deviation from this can cause a break clause not to be enacted. An example is given where the break clause required two coats of paint and the tenant only used one coat, as is often possible with the new type of paints. The court held that the tenants break clause notice was invalid and did not comply with the terms of the lease, which is a very expensive coat of paint. It also discussed what is meant by the paying of the rent, which often also means paying of insurance premiums and service charges, etc. As if often the case with leases, the book examines what specific terms mean and the implications they have in a solicitors/legal world (which we all have to live in).
Landlord's Break Right and the Landlord and Tenant Act 1954
This comments briefly on the landlord's rights and refers us to Chapter 13.
The Lease Code
This is explained in a paragraph where the tenants are keen for the landlord to be more flexible, as they would be.
The section finishes nicely with:
Points to Consider
These are bullet points, which are nicely bordered and which are practical. Let us give you an example of one:
The first one is break clauses with any conditions are fraught with difficulties and as a result they may not be operable / legal. Detailed surveying advice should be taken well in advice of any break date.
Chapter 12 - Planning and Statutory Matters
We suppose it could be argued that these are becoming more and more of a burden. The chapter starts with an overview, which gives examples of the sort of statutes that have to be complied with and also advises that often there are several causes within the lease referring that the tenant has to comply with the statute, which Edwin Bannister interestingly says, often necessarily listing out by way of example various statutes which have to be followed. He often advises that the landlord would normally require consent.
Then the chapter sub-divides into several sections: planning, listed buildings, conservation areas, contaminated land, disability discrimination, asbestos, fire prevention, energy performance, five steps to improve energy efficiency, smoke free premises, CDM regulations, liability to third parties and ends nicely with points to consider.
The Asbestos Section
This advises from 13th November 2006 The Control of Asbestos Regulations 206 like previous regulations impose a liability on employers and others in control of non-domestic premises in connection with the management of asbestos in the premises.
It then refers to dutyholder who has to carry out the necessary risk assessment to determine whether the asbestos is likely to be present and decide how to manage the risk. Manage can mean anything from identify with warning signs to restriction areas etc. It finishes with "As a general rule the landlord should be entitled to recover the costs incurred by complying with the Statute". This will extend to costs incurred in carrying out audit inspections and surveys and complying and maintaining an asbestos register, which of course are duly passed onto the tenant in any well worded lease.
We couldn't resist having a look at the fire prevention section as well, as since 1st October 2006 certain types of buildings require a Fire Certificate from the Local Authority Fire Officer (if there are any need for any) under the Fire Precautions Act 1971. However, the Regulatory Reform Fire Safety Audit 2005 consolidated the fire safety legislation for a non-domestic premises in England and Wales and replace the 1971 Act.
Fire Certificates were abolished and replaced by a new risk assessment regime, imposing on the responsible person, which could be the employer, the person running the property etc. Edward Bannister explains the breadth of the new Act, or new regime as he calls it, which is not subject to the limitations to property type, number of workers etc. It is aimed at non-domestic premises and subject to a limited number of exceptions. It also requires to a place not just necessarily a building. Complying with this Statute, of course, could be very onerous. We feel it is a point to negotiate on within the lease.
Review Upon Reflection
Edward Bannister's book is very readable. We assume from the title Commercial Leases 2008 that it is likely to become dated. We certainly feel it is very readable and indeed would go so far as to say it is re-readable.
If you require any help with regard to dilapidations, negotiations or disputes please contact us on 0800 298 5424 and we will be happy to help you.