Law Society lease - "out of the Act"

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    Law Society lease - "out of the Act"

    Is there any problem in granting a law society lease out of the act?

    (after signing the statutory declaration by a solicitor)

    What makes you think any non-legally trained members in this forum can give expert advice to your question ?

    What does "out of the Act" mean ? .


      I'm assuming the OP meant the 1954 Landlord and Tenant Act but the question needs to be clarified to receive proper response. My take on anything that involves a contract is to get a solicitor to make sure everything is done correctly. If you have any uncertainty on the wording of a document it's worth paying an experienced and reputable legal professional to go over it before you sign.


        "Is there any problem in granting a law society lease out of the act?
        (after signing the statutory declaration by a solicitor)"

        No - provided the statutory procedure is followed correctly.

        Excluding s24-28 (contracting out of the LTA54, aka 'outside the Act') is a separate issue to the terms and conditions of the lease to be granted including whether the lease uses the Law Society format or not,


          more correctly outside of the act, not out of the act


            I’ve been a commercial Landlord and developer for over thirty years. One time I was introduced to a solicitor who specialised in commercial property matters. He recommended that I use the Law Society Lease (either Whole of Building or Part of Building), freely available online.It has proven perfectly adequate for my shop and eleven factory/warehouse units.

            The following is a summary of my procedure list;
            1. Email requesting Lease/admin fee
            1a. Landlord and Tenant Act Covering letter;

            SUBJECT TO CONTRACT. Your current lease expired/expires on............
            I now enclose a copy of the new lease as originally submitted at the end of the previous lease. As before, the new lease will not be protected in so far as the tenants’ right to renew is concerned, when the lease comes to an end.
            In order for the right to renew be given up, I am required to serve upon you a warning notice setting out important information for you to read and understand.
            I therefore enclose by way of service upon you the following:
            (1) Landlord and Tenant Act 35 Notice.
            (2) Draft Lease
            (3) Declaration form for your signature
            If you wish to proceed with the grant of the Lease without the right to renew then please kindly sign and date all of the forms including the statutory declaration, which must be sworn in front of a solicitor or commissioner of oaths, and then return them to me.
            If you have any concerns you should consult your own legal advisor.

            2. Landlord & Tenant 35b 2 pages IF TENANT DOES NOT HAVE 14 DAYS’ NOTICE, or 35a IF TENANT DOES HAVE 14 DAYS NOTICE*
            4. Lease doc and additional clauses (Rider with exclusion clause)
            5. Plan with property outlined in red
            6. Check list for signing documents
            7. Copy of land registry if applicable
            8. Copy of EPC cert
            *If 14 days’ notice is given in documented form, then solicitors or commissioner for oaths signature is not needed.

            Outside of the Act or outside the act, as any commercial Landlord should know, is as Kmah said; contracting the lease outside of the 1954 Landlord and Tenant Act as amended.

            So what are the advantages? If a lease is contracted out a landlord is free to deal with business premises as it chooses when the lease ends. The landlord might choose to take possession for its own purposes or renegotiate terms for a new lease with a new tenant or the existing tenant.
            Extract taken from although I have no experience in dealing with this company, I haven’t needed to as I’ve studied the law and done the paperwork myself – initially under the guidance of a competent solicitor. I’d suggest that if you’re a bit shaky in this area that you too use a competent solicitor.

            I do hope that this gives you a reasonable guide, but remember, I am not a solicitor although my work has been checked by one.
            I welcome polite helpful comments from anyone of the the legal profession on this site, if they have spotted any errors. Cheers Neilt


              I'd be interested to know what the opinion of the rent review specialist who kindly contributes to this forum, but essentially would a review on a contracted out lease be in theory to a slightly lower rent? Or would the tenant be so petrified of being denied a renewal lease that he will sign anything to please the landlord? Personally I think it 'not quite cricket' in some way to insist on contracting outside the act unless there is a real basis to retain the right to recover possession such as a pending development


                "would a review on a contracted out lease be in theory to a slightly lower rent?"

                In principle, the short answer is yes. The review on a contracted out lease would be a slightly lower rent. The main reason is not so much that the lease is contracted out, but that the existence of the contracting out would constitute evidence as at the review date that the tenancy would not have LTA54 renewal rights.

                However, whether the rent on review on a contracted out lease would be a lower rent depends to an extent on the duration of the term at the review and the review date in relation to that duration. For example, in a lease for 25 years with 5 yearly reviews, the first review at year 5 would mean 20 years unexpired so it might be considered too far off to as to warrant any reduction in rental. Whereas the fourth review at year 20 would be more likely considered foreseeable.

                It would depend too upon the evidence. When the evidence is of rents on contracted-out leases, it would make no sense to have a slightly lower rent for the review in question.

                "Or would the tenant be so petrified of being denied a renewal lease that he will sign anything to please the landlord?"

                A tenant that commits to a contracted-out leases knows in advance what he is letting himself in for; namely no legal right to remain in occupation on expiry of the contractual term. Why on review a tenant would petrified of being denied something to which he not entitled wouldn't make sense! Whether the tenant would agree to no reduction in rent (presupposing no reason otherwise) merely to encourage the landlord to be amenable to grant a new lease is the risk that the tenant would take.

                As for 'not quite cricket', hmm! The thinking behind 'contracting out' might have been originally envisaged as designed for pending redevelopment, but nowadays lettings on contracted-out leases are commonplaces, and sometimes in a big way. I think I am right in saying that all the leases in The Mall, Cribbs Causeway, Bristol are contracted-out, presumably to enable the Mall landlords to have. control of tenant-mix .Also, contracting-out is nowadays a standard condition for tenants wanting to underlet, the underlease to be outside LTA54. The thinking there is why when the tenant doesn't want to occupy the premises should a sub-tenant have renewal rights.


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