All posts tagged "2014"
Open market rent review
(2014 Oct) A feature of investing in commercial property is the rent review. With residential BTL, rents can be increased but usually only at the end of the term if the existing tenant would pay more or on a new letting if the market is up to it or, as with ground rents, to pre-set […]
Guarantor or Rent deposit
(2014 Sep: Landlordzone) (to be edited) The ideal for any landlord is for the tenant to have a guarantor and provide a rent deposit. But which is better when the landlord has to choose? The starting point is the status of the tenant. With a tenant that is one person (an individual) the likelihood of […]
Upward-only rent review
(2014 May) – Contrary to popular belief, ‘upward-only’ rent review does not mean the rent must increase. An ‘upward-only’ review means that the rent payable after the review to open market rental is agreed or ascertained would not be less than the rent payable before the rent review, even if the open market rent were […]
Valuation and Over-Paying
(2014 Mar) – I want to dispel a widely held notion, the strong belief in which leads to investors overpaying for shop property. It is a notion that has contributed to substantial over-valuation (along with over-mortgaging by the banks and other lenders) of shop property investments for more than three decades. When you buy a […]
Dispute Resolution Costs
(2014 Mar) – In my opinion, and I’m not alone, the fees required and charged by surveyors appointed by the RICS to act as arbitrators or independent experts are often out of touch with reality and, in many instances, obscene. For example, I am dealing with two matters at present, for different clients, where the […]
Landlord Proposals
(2014 Mar) – Years ago, an institutional landlord, a well-known insurance company, whom I found myself acting against on numerous occasions, used to include £500 pa margin in its proposals for rent review which struck me as ambitious but in most cases nevertheless insurmountable. Thinking I’d like try the same approach, I experimented by recommending […]
Sub-Lease
(2014 Jan) – Multiple retailers, particularly, with premises that are surplus to requirements frequently sub-let rather than assign the leases. Why? There are many reasons. For example: 1) the risk of assignment is that in the event of assignee default, the lease could revert to the assignor at any time. [Although leases containing Authorised Guarantee […]
Rent Review
(2014 Jan) – The purpose of a rent review (and where the basis is market rent) is to enable the landlord to obtain the market rent for the premises at the review date (or valuation date if different) and for the tenant to ensure it is not paying any more or less. The open market […]
Presumption of Reality
(2014 Jan) – It has long been recognised that too literal an approach is to be avoided in the interpretation of contracts. The reason for that was explained thus by Lord Reid in Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235: “No doubt some words used by lawyers do have a rigid […]
Pension Plan
(2014 Jan) – A pension is a long-term commitment and tax relief is attractive, but setting-up fees and on-going charges for pension plans can be disproportionately high. I suggest thinking inside the box. The question to ask is: would the proposition be worth buying if there were no tax advantages? Many property investment schemes and […]
Open Market
(2014 Jan) – The open market is made up of different ‘afford-abilities’, so, in linking the review to “open market rent” (OMR) ‘open’ means everyone and anyone (A). As indicative or comparable evidence, a new letting to an inexperienced first-time tenant at a rent that might amaze is as valid as any hard-driven bargain by […]
Negotiation
(2014 Jan) Contrary to popular belief, there is, assuming the review to market rent, no right or wrong way to negotiate a rent review. The tenant may like to assert that the landlord should produce evidence to justify a proposed increase and if none were forthcoming then the rent should not go up, but that […]
Mortgage and Loan
(2014 Jan) – Even if they start by using cash, many purchasers are concerned with the cost of financing property. In my experience, they can often be more concerned with finance than the value of the proposition. This situation typically arises when property is offered at a high yield, compared with interest rates, but not […]
Growth
(2014 Jan) – The rate of growth is a combination of rental and capital growth. Although capital growth is often rental-dependent, a higher price may be obtainable from an owner-occupier rather than an investor or developer. Also, because a difference can exist between the value of a property and a proposition, investment sentiment can affect […]
Demise
A “demise” or “lease” is the grant of a right to the exclusive possession of land for a determinate term less than that which the grantor has himself in the land. A lease is therefore a species of conveyance, and it is provided by s (2)05(1)(ii) of the Law of Property Act 1925 that the […]
Economical Rent
(2014 Jan) – In business tenancy law, the actual tenant’s ability to afford the rent at review is generally considered irrelevant. So, the actual tenant faces a dilemma, because – unless the review goes to ‘arbitration’ – the tenant must decide what rent to agree and no tenant will willingly agree more than they can […]
Demise
(2014 Jan) A “demise” or “lease” is the grant of a right to the exclusive possession of land for a determinate term less than that which the grantor has himself in the land. A lease is therefore a species of conveyance, and it is provided by s (2)05(1)(ii) of the Law of Property Act 1925 […]