Property Law & Practice

Task details and instructions

A regular client, ABC Investments Ltd, has just purchased a small town centre commercial property investment portfolio comprising a row of two-storey retail and office units located on Main Street, Salchester.

The portfolio consists of five retail units and three small office buildings. There is also a car park that provides 20 spaces for the entire portfolio.

You have been instructed to advise ABC Investments Ltd on how the efficiency/investment value of the portfolio can be maximised.

To assist with your deliberations, you have recently been passed a copy of the tenancy schedule (below). Your client has also indicated that it would like to take possession of 11 Main Street for the purpose of its estate office at the earliest opportunity.

Your client has asked you to produce a report that advises on the above matters. Specifically, the report should:

1. Comment on the legal significance of the existing arrangements, having regard to relevant areas of the law of landlord and tenant, and

2. Based on this analysis, include recommendations as to how the performance of the portfolio might be improved.

In dealing with the above requirements the report should describe any relevant procedures that need to be followed, and should also draw attention to any urgent matters that require action straight away. You are permitted to make reasonable and justified assumptions where applicable.

3. The Tenancy Schedule

The portfolio consists of the following properties:

1 Main Street

Tenant:            Screws and Nails Tools Ltd.

Use:                DIY store.

Lease:             5 years on FRI terms with effect from the 01/03/2012

Notes:             Contracted Out Tenancy.

                        Current rent £7,000pa, rental value £8,500pa

                        Rent currently six months in arrears.

                       The first floor has been sub-let with no sub-lease

3 Main Street

Tenant:            Helena’s Hair and Beauty.

Use:                Hairdressers and Beauty Boutique.

Lease:            9 years on FRI terms with effect from 01/01/2012

 with three-yearly rent reviews

Notes:             Protected Tenancy.

                       Current rent £6,000pa, rental value £9,000pa                      .

‘Time of the essence’ review clause. The trigger notice for review must be served no later than one calendar month before the review date.

5 Main Street

Tenant:            Stephen Modem (trading as Steve’s PCs).

Use:                PC Repairs.

Lease:             3 years on internal repairing terms with effect from     01/09/2015

Notes:           Contracted out Tenancy.

                      Current rent £7,000 per annum, rental value £8,000 per annum.

Property vacant and has both internal and external dis-repair.Rent arrears and business rates arrears.

                      The business is for sale with an interested party.

7 Main Street

Tenant:            Dave Doughnut (trading as Dave’s Diner).

Use:                Hot Food takeaway and café.

Lease:             3 years from the 01/04/2013

Notes:             Current rent £11,000 per annum, rental value £8,000pa. Protected Tenancy.

David served a section 26 request on the landlord on the 1st September 2017 specifying a new lease for 3 years at a rent of £6,000 per annum.

9 Main Street

Occupier:        Doggy Doos Charity Shop.

Use:               General goods.

Licence:         Granted in July 2013 for one year.

Notes:            Rent paid is one peppercorn. Rental value: £8,000pa

Successful outlet and licensee wants to stay.

11 Main Street

Occupier:        Numbers Plus Ltd (Accountants).

Use:                Office.

Lease:             3 years on FRI terms with effect from 01/09/2015.

Notes:              Protected Tenancy.

                         Rent £10,000 per annum, rental value £13,000.

                         Rent paid and all covenants observed.

13 Main Street

Occupier:         Recruiting Today.

Use:                 Office.

 Lease:              None available.

Notes:              A section 25 notice was served on the 01/01/2017 granting a new tenancy for 3 years from the 01/08/2017 at a rent of £15,000 per annum to which the tenant objected within one month. Nothing seems to have happened since.

15 Main Street (Detached building)

Occupier:        Lawyers Direct.

Use:               Office.

Lease:            5 years on FRI terms with effect from 01/03/2015

Notes:            Rent paid up to date.

                        Rent £16,000.00 per annum

                       All covenants observed.

Your client needs to demolish this property to form a larger car park and to create an access route to the rear of the portfolio and needs vacant possession as soon as possible.

Word count/duration (if applicable)

Your assessment should be no more than 3000 words