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The PDF format can be accessed from the link below.
If the Property is also subject to commercial tenancies, then consider raising CPSE.2 in addition to CPSE.6. If raising both, there may be some overlap in questions relating to common parts. The parties can decide whether it is sufficient to answer these on one set of CPSEs only.
If you have any comments on this document, please e-mail [email protected].
The section on Interpretation in CPSE.1 is incorporated in this document and the following interpretations also applies:
1995 Act: means the Landlord and Tenant (Covenants) Act 1995.
Consent: refers to an approval, a licence or a permission (whether of the Landlord, any superior landlord or any other person).
Landlord: includes licensor.
Let Unit: means any Lettable Unit which, at the date of the replies to these enquiries, is the subject of at least one current Tenancy.
Lettable Unit: means any part of the Property used or intended for separate occupation for residential (not commercial) purposes.
Rent: includes licence fee but does not include service charge or insurance premiums or other sums reserved as rent.
Tenancy: refers to any arrangement for the occupation of any Lettable Unit (whether that is a lease, underlease, licence or an agreement for a lease or licence).
Tenancy Documents: (in relation to each Tenancy) refers to the instrument creating that Tenancy and any of the following that relate to it: charges, mortgages, surrenders, variations, side letters, undertakings, applications, Consents, memoranda, registrations, notices, rent deposit deeds, orders, guarantees, concessions, franchise agreements, counsel's opinions, arbitrators' or experts' decisions.
Tenant: includes subtenant and licensee.
Instructions
Section 1 (enquiries 1-3) relates only to those parts of the Property that are not Let Units.
Section 2 (enquiries 4-18 ) relates only to Let Units.
Voids are the Lettable Units which are currently unlet. Voids may have a significant impact on the income which is able to be derived from the Property.
The Buyer will want to know why there is no current Tenancy (for example because there was a long term plan to get vacant possession in order to redevelop, or because the Lettable Unit became vacant and no effort has yet been made to market it, pending the proposed sale to the Buyer).
The Buyer may wish to start marketing the vacant Lettable Unit and will want to know what has been done to market it and whether there is anyone who might be interested in taking a Tenancy of it.
1.1 Please identify all Lettable Units which are not currently Let Units.
1.2 In relation to each such Lettable Unit, please explain how any previous Tenancy was ended, why there is no current Tenancy and tell us whether anyone is currently expressing an interest in taking a Tenancy of it.
Areas of the Property may be unlet because they are designated as common parts to be used by the landlord and the occupiers of the Property in accordance with the individual occupational lease terms. Common parts typically include stairs, lobbies, entrance halls and access roads but they are determined by the physical layout of the Property, the number of occupancies, and the needs of the occupiers.
2.1 Please identify any areas of the Property which are common parts, being parts which are not Lettable Units and which are intended to be used in common by the occupiers of the Property.
2.2 Is use and maintenance of the common parts governed by any arrangements other than the terms of the Tenancies of the Let Units? If so, please provide details.
Commercial parts (in which case CPSE.2 should be raised in relation to those).
Retained parts (those which are neither designed nor intended to be separately let, nor treated as common parts, but are retained by the landlord for a particular purpose, for example, as office or storage space). The Buyer will need to establish whether the cost of insuring and maintaining these parts will be met by the tenants of the Let Units or by it as landlord.
3.1 Please identify any areas of the Property that are neither Lettable Units nor common parts.
3.2 Are any of these areas designed or intended for commercial use? If so, please specify which.
3.3 Are any of these areas occupied and, if so, on what basis?
The occupier will not necessarily be, or only be, the person who is the Seller's immediate tenant of the Let Unit. Occupation may be by an employee of the tenant company or a relative, or may also be by virtue of a licence, a sublease, or by trespassers.
Enquiry 4.2 (d)
If the current use is revealed as commercial, then the Buyer should consider raising CPSE.2 for those units.
Enquiry 4.2 (g)
The Seller should indicate which statutory regime (for residential tenancy protection) each Tenancy falls into. This will then help it decide which is the relevant enquiry (from 15 to 18) to answer in relation to that Tenancy.
Enquiry 4.3 (a)
Tenancy Documents will include any side letters. These may vary the terms of a lease by, for example, waiving the landlord's entitlement to the full amount of rent due for a period, or by imposing a cap on the amount of service charge which is recoverable.
Enquiry 4.3 (b)
Even a failure to complain that rent is regularly paid late may constitute an informal agreement which could bind the Buyer (Hazel v Akhtar [2001] EWCA Civ 1883).
Enquiry 4.3 (c)
If pending Consents are disclosed, the Buyer may wish to negotiate a term in the contract to require the Seller to take into consideration the Buyer's wishes as to how the application should be dealt with.
4.1 If not already supplied, please supply a copy of the Tenancy Documents (including any inventory or schedule of condition) for each current Tenancy.
4.2 Please supply a schedule of the current Tenancies of all the Let Units, indicating, in relation to each such Tenancy (unless disclosed by the Tenancy Documents supplied):
(a) the Let Unit that the Tenancy relates to;
(b) the name of the current Tenant;
(c) the name of the current occupier;
(d) the current use;
(e) whether or not the Tenancy is in writing; and
(f) the relevant statutory regime (as described in enquiries 15-18) which the Seller believes applies to that Tenancy.
4.3 Please provide the following information for each current Tenancy:
(a) details of any informal arrangements with the Tenant that are not disclosed by the Tenancy Documents supplied, including any Consents to the grant of the Tenancy or given under the Tenancy;
(b) details of any waiver of any of the terms of any of the Tenancy Documents supplied;
(c) details of any applications for Consent made by the Tenant that are currently being considered;
(d) details of any negotiations for the surrender, renewal of variation of the Tenancy and any terms agreed; and
(e) confirmation that the Tenant has not indicated, formally or informally, any intention to vacate.
4.4 For each current Tenancy, please answer whichever of enquiries 15 to 18 are relevant to the statutory regime applicable to that Tenancy.
If the Property is subject to Tenancies which reserve a substantive rent, the Buyer will probably be interested in it as an investment. The Buyer will therefore be concerned to know everything about the rental income, including the extent to which rent has not been recovered, whether rent will or can be recovered and at what cost, and whether the level of income will change because of rent reviews or concessions.
These enquiries should be answered separately for each current Tenancy.
Enquiry 5.2
Although the existence of any rent suspension clauses should be apparent from the Tenancy Documents, the Seller should include here details of any rent suspension currently in effect.
Enquiries 5.4 to 5.7
These will not be relevant to residential Tenancies that have no rent review.
Where there is a rent review clause, there is a presumption that, even where it stipulates that certain parts of the rent review procedure must be completed by a specified time, time is not "of the essence" and therefore a failure to observe those time limits does not have any consequence. The following are exceptions to this rule and illustrate where time will be of the essence and the time limits will be binding on the parties:
Where the rent review clause expressly provides that time is to be of the essence.
In certain circumstances where the clause states the consequence of not complying with the time stipulation.
In certain circumstances where a party serves a notice making time of the essence.
Where the clause structure demonstrates an intention that time should be of the essence.
Where the relationship between the rent review clause and another provision in the lease (such as a break clause) by implication makes time of the essence.
The Buyer will need to review the rent review terms in the light of what has happened in practice.
Enquiry 5.6
The general rule is that where premises have been improved, the improvements form part of the premises and will be valued for the purposes of calculating the rent ("rentalised") unless they are to be "disregarded". Whether or not improvements are to be rentalised will depend on the wording of the lease. Generally the rent review clause will provide that in calculating the rent on a review, an improvement is to be disregarded where it was carried out by the tenant, and at the tenant's expense, with the landlord's consent (where required) but not where the landlord required it to be carried out.
In relation to each current Tenancy:
5.1 Please state:
(a) the amount of the Rent currently payable;
(b) whether the Rent is paid in pounds sterling;
(c) who pays the Rent;
(d) whether the Tenant is paying the Rent with the help of housing benefit and, if so whether the benefit is paid to the Landlord or to the Tenant. Where Rent is being paid with the help of housing benefit paid directly to the Landlord, please confirm that, on completion, you will provide us with a letter authorising the local authority to pay future housing benefit direct to the Buyer.
(e) whether the Rent is paid by banker's order or direct debit; and
(f) to whom rent demands are sent?
5.2 Except where apparent from the Tenancy Documents supplied, please give details of any rent concessions, deferments, abatements, reverse premiums on the grant of a lease and other inducements given.
5.3 Please supply a schedule of outstanding rent arrears and a record of rent payments over the last three years.
5.4 Please confirm that:
(a) any rent reviews have taken place strictly in accordance with the terms of the relevant Tenancy;
(b) any notices and applications for arbitration or for determination by an expert of any current rent reviews have been made on time; and
(c) any rent review settlements have been satisfactorily evidenced in accordance with the terms of the relevant Tenancy (or provide details of any settled rent review which has not been evidenced in this way).
5.5 In respect of any rent reviews that are currently being negotiated, please state the present position and provide copies of all notices and correspondence.
5.6 Except where apparent from the Tenancy Documents supplied:
(a) has any Tenant made any improvement to the Let Unit which is to be ignored on rent review;
(b) since the original letting of the Let Unit have there been any alterations to its internal layout or physical arrangement or appearance which might affect the level of rent achievable; and
(c) are there any other circumstances which any Tenant has claimed have the effect of reducing the rental value of the Let Unit?
The particular dates on which the Let Units were last redecorated will not necessarily correspond with the required dates for redecoration under the Tenancies. The Buyer will wish to know the actual dates to decide whether any enforcement action is needed for breach of covenants to redecorate and to assess whether any breach can arguably be said to have been waived.
Enquiry 6.2
The Tenancy may give the landlord the option, at the end of the lease, to require reinstatement by the tenant of any alterations that it has made. This enquiry is designed to find out what works the tenant has done.
In relation to each current Tenancy:
6.1 Please state when redecoration of the Let Unit was last carried out:
(a) externally; and
(b) internally.
6.2 (If not apparent from the Tenancy Documents supplied) please give details of any works carried out by the Tenant to the Let Unit since the date of the Tenancy or any agreement for the Tenancy and indicate (in respect of these works) whether they were authorised by a Landlord's licence (where required).
The Buyer will want to establish which Tenancies qualify as "new tenancies" as defined in section 1 of the 1995 Act and which do not ("old tenancies"). This may not be apparent on the face of the instrument creating the Tenancy. It is important to classify them, as different rules apply to the liability of the parties on assignment of a new and old tenancy.
On assignment of an old tenancy, the original tenant remains liable during the whole term, and the assignee is likely (through direct covenants with the landlord) also to accept liability for the remainder of the term from the point of assignment.
On assignment of a new tenancy, the basic principle is that the assignor tenant and its guarantor, if any, cease to be liable, and the assignee becomes liable from the date of the assignment. This rule is varied if the assignor tenant is required (or agrees) to enter into an "authorised guarantee agreement".
This is a type of guarantee agreement permitted under the 1995 Act which effectively makes the outgoing tenant a guarantor of the incoming tenant until that incoming tenant itself assigns the lease. The Buyer ought to be aware of any authorised guarantee agreements because they should be included with the Tenancy Documents; in practice, they are often incorporated within a licence to assign.
In practice, landlords rarely require an authorised guarantee agreement from the assignor on assignment of a residential Tenancy because:
It would be rare for the assignor to be willing to act as guarantor for the assignee (whether under an authorised guarantee agreement or a voluntary guarantee).
Where the residential Tenancy is granted at a premium, and a very low rent, the landlord may not be that concerned about whether the assignee can pay the rent. If the assignee fails to pay the other outgoings (for example, service charge) or to observe the other covenants, the landlord may be content either to forfeit the lease or claim damages from the assignee.
Where the residential Tenancy reserves a rack rent (and no premium) it is likely to be a short Tenancy, and these usually prohibit assignment altogether.
Enquiry 7.2
This enquiry applies only to "new tenancies" under the 1995 Act.
Section 11 of the 1995 Act defines "excluded assignment". The most common reason for an assignment being excluded is because it has taken place without the landlord's prior consent, where that consent ought to have been obtained. On a strict reading of the 1995 Act, a subsequent grant of consent will not rectify the situation and the assignment will remain an excluded assignment until the next assignment which is not itself an excluded assignment.
The other reason an assignment may be excluded is because the assignment has taken place "by operation of law" as, for example, on death or bankruptcy.
Under an excluded assignment the assignor remains liable under the Tenancy together with the assignee. This means the Buyer will be able to enforce the tenant covenants against both the assignee and the assignor.
Enquiry 7.3
This enquiry is relevant to both old and new tenancies.
Under section 17 of the 1995 Act, in most cases, where a tenant has failed to pay sums due under a lease and a former tenant or its guarantor remains liable for that default, the landlord can only recover these sums from the former tenant or guarantor if it has served notice of its intention to do so. The notice must be in the form prescribed by section 17 and must be served on every former tenant and guarantor against whom the landlord wishes to recover. The notice must be served within six months after the sums first became due.
This element of the 1995 Act is more important for "old" leases, i.e. those granted before 1 January 1996 because generally under new tenancies a former tenant will have no continuing liability.
Enquiry 7.3(c) is made to alert the Buyer to the need to serve section 17 notices following completion of the Transaction and also to warn the Buyer of potential claims for overriding leases (see enquiry 7.4 below).
Enquiry 7.4
If a former tenant or its guarantor has been served with a section 17 notice of the landlord's intention to claim unpaid sums due under a Tenancy, and pays in full the amount claimed, that former tenant or guarantor is entitled to claim an overriding lease under section 19 of the 1995 Act.
An overriding lease is a lease of the premises, granted by the landlord to the former tenant or guarantor and which slots in above the lease to the defaulting current tenant, so that the claimant becomes both the landlord's new immediate tenant and the landlord of the defaulting tenant. The form of the overriding lease is the same as the lease which it overrides, i.e. the lease between the landlord and the defaulting tenant.
The advantage for the former tenant or guarantor of taking an overriding lease is that it gains an interest in the premises and a degree of control over the defaulting tenant. It can sue the defaulting tenant and, as landlord, can bring forfeiture proceedings against the defaulting tenant if there is a further breach of covenant.
The advantage for the landlord is that it has as its immediate tenant someone who has demonstrated in the past their ability to pay the rent. The disadvantage is that the landlord may end up with someone whom it would not have chosen to be tenant, perhaps because that former tenant had been difficult or unreliable as a tenant in the past.
The Buyer will want to know whether there are any potential claims for overriding leases. A claim for an overriding lease can be made at any time within 12 months after full payment under a section 17 notice has been made.
In relation to each current Tenancy:
7.1 Please state whether it was dated on or after 1 January 1996 and, if so, was granted pursuant to an agreement, an option or a court order made before that date?
7.2 Please confirm whether any former Tenants or their guarantors are still liable under any Tenancy by reason of an excluded assignment as defined in section 11 of the 1995 Act?
7.3 With reference to section 17 of the 1995 Act please:
(a) supply full names and current addresses of any persons contingently liable for any fixed charge payable under the Tenancy as defined in section 17;
(b) provide copies of all section 17 notices which have been issued for claims which remain unpaid; and
(c) give details of all claims currently outstanding which are required to be the subject of a section 17 notice.
7.4 Please give details of anyone entitled to claim an overriding lease under section 19 of the 1995 Act and give details of any claim made even if it has been abandoned or withdrawn.
Under the 1995 Act an assignee (whether of the lease or the reversion) becomes liable under the covenants unless they are personal to the assignor. Covenants for these purposes may include obligations contained in any agreement for lease.
The Buyer will need to know whether there are any obligations in an agreement for lease which remain unfulfilled and for which he may become liable on completion of the Transaction. These might include obligations to build, alter, repair or fit out any Let Unit. The Buyer may need to reflect the cost in the price for the Transaction or to negotiate indemnities.
The Seller should beware that, according to the Court of Appeal in BHP Petroleum Great Britain Ltd v Chesterfield Properties Ltd [2001] 3 WLR 227, personal covenants are not released by the mechanisms of the 1995 Act and it may therefore need to consider whether to reserve appropriate rights to comply with any continuing personal obligations.
Enquiry 8.2
The Buyer needs to know how any Tenancy of any Let Unit may have been varied, when the variation was made, and who was party to it. Variations affecting the length of term or the extent of the premises demised by the lease may constitute a surrender of the existing lease and the grant of a new lease. If such a variation is made to an "old tenancy", the regrant will be treated as a grant of a new lease under the 1995 Act, so that the variation will have effectively converted an old tenancy to a new tenancy, to which the 1995 Act liability regime will apply.
Even if the variation does not constitute a surrender of the lease, it may still release a guarantor from all further liability unless either the guarantor has consented to it or there are provisions in the guarantee agreement to permit such variations.
The guarantor in question could be the guarantor of a former tenant or of the current tenant, or a former tenant who has given a guarantee in the form of an AGA. Release under this rule of law cannot apply to the original tenant or a former tenant under an "old tenancy", as neither are in the position of a guarantor. However, their liability may be capped (see the following paragraph).
Where the variation has not released the guarantor, the guarantor's liability, and that of former tenants, may still have been limited. Where the lease obligations have been made more onerous by a variation of terms, a former tenant (which includes a former tenant who has provided an AGA) or the guarantor of a former tenant is not liable insofar as liability has been increased by the variation. This is the effect of the Court of Appeal's decision in Friends Provident Life Office v British Railways Board [1995] 1 All ER 336 but, in addition, for variations on or after 1 January 1996, section 18 of the 1995 Act has the same effect.
It is not clear, however, whether section 18 applies if the former tenant or the guarantor of the former tenant was a party to the variation (as a result of the operation of the anti-avoidance provisions in section 25 of the 1995 Act). The protection afforded by section 18 does not apply to the current tenant's guarantor.
In relation to each current Tenancy:
8.1 Please confirm there are no outstanding obligations on the part of either the Landlord or the Tenant under any agreement for lease under which any Tenancy was granted. If there are such outstanding obligations, please supply details.
8.2 Except where apparent from the Tenancy Documents supplied, please give details of any variations to any Tenancy of a Let Unit and when and how they were effected.
This enquiry is concerned with security deposits, rent deposits, bank bonds and separate guarantee or surety agreements. The extent or duration of the liability of any guarantor will depend on whether the lease is one to which the 1995 Act applies (see the guidance notes to enquiry 8.2).
In relation to each current Tenancy:
9.1 Except where apparent from the Tenancy Documents supplied, please state whether a sum has been deposited by the Tenant as security for, or on account of payment of Rent or performance of any obligation. If yes, please state:
(a) who holds the security deposit and where;
(b) the amount currently held by way of security deposit (including any interest which has accrued on it);
(c) whether any claim has been made against that security deposit. If yes, please give details; and
(d) whether you are aware of any dispute or issues that you believe may lead to a dispute in relation to the repayment to the Tenant of the security deposit.
9.2 If the Tenancy is considered to be an assured tenancy or assured shorthold tenancy under the Housing Act 1988 (as amended by the Housing Act 1996) and the security deposit was paid by the Tenant (or retained by the Landlord on a renewal of the Tenancy) on or after 6 April 2007, please state, in addition to the information supplied in the reply to enquiry 9.1:
(a) under which deposit scheme the security deposit is held;
(b) the reference details for the deposit with that scheme;
(c) if the security deposit is lodged with a custodial scheme, whether it was lodged within the time period required by law;
(d) whether the Landlord gave the Tenant the information prescribed by section 213 of the Housing Act 2004 and did so within the time period required by law; and
(e) whether the Tenant has made any County Court claim for failure to protect the security deposit or to provide prescribed information.
9.3 Except where apparent from the Tenancy Documents supplied, please give details of any guarantees or bonds given by a third party (e.g. a bank) in relation to a Tenant's obligations.
9.4 In relation to all guarantees or bonds given by a third party (e.g. a bank) in relation to a Tenant's obligations please:
(a) confirm that no claim has been made under these arrangements; and
(b) confirm there has been no release or discharge of any such third party, whether expressly or by operation of law.
It is important that the Buyer is fully informed regarding service charges so that it can assess the likelihood of a service charge dispute, even if there is none at the time of the Seller's replies.
Asbestos - Enquiry 10.18
Regulation 4 of the Control of Asbestos Regulations 2012 (SI 2012/632) (CAR 2012) applies only to non-domestic premises. Where the Property contains residential lettable units and common parts (for example, where a large property is converted to flats with communal staircases and corridors), regulation 4 will apply to the common parts of the Property (and any non-domestic parts) only. The Buyer is likely to become the dutyholder for the purposes of regulation 4 when it completes the acquisition. Under CPSE.1 enquiry 8, the Buyer should obtain copies of the information held by the Seller on asbestos issues. This will help the Buyer discharge its duty under regulation 4.
In addition, this enquiry 10.18 asks the Seller for any correspondence there may have been with the residential tenants about asbestos issues.
Enquiry 10.18 refers to both the CAR 2012 and the comparable predecessor regulations (Control of Asbestos Regulations 2006 (CAR 2006) and Control of Asbestos at Work Regulations 2002 (CAWR 2002)). All of these contain a regulation 4 in the same terms. All sets of regulations are referred to as the Seller may have relevant information under the earlier regulations.
For more information on the CAR 2012, see the guidance notes for enquiry 8 in CPSE.1.
10.1 Has the right to manage been exercised in relation to the Property or any part of it?
10.2 Is there a recognised tenants' association? If so, please provide the name and address of the secretary.
10.3 Has the Landlord complied with all its obligations under the Landlord and Tenant Act 1985? In particular:
(a) If the Landlord has carried out qualifying works to the Property (as determined under s20(3) of the Landlord and Tenant Act 1985) or entered into a long term agreement for the provision of services to the Property:
(i)
did the Landlord consult the Tenants before doing so;
(ii)
was any notice put, or is such a notice required to be put, in OJEU in respect of those major works or long term contract? and
(iii)
please supply details of the works and/or long term agreement.
(b) in relation to any service charge demand sent to a Tenant on or after 1 October 2007, did the Landlord serve on the Tenant a formal summary of the Tenant's rights and obligations in the prescribed form?
(c) has any Tenant exercised its rights under section 21 of the Landlord and Tenant Act 1985 to seek a summary of the service charge expenditure or under section 22 of the Landlord and Tenant Act 1985 to inspect the service charge accounts? If so, which Tenant(s), and did the Landlord comply as required by that Act?
(d) is there any pending application by the Landlord to the First-tier Tribunal (Property Chamber) (previously called the Leasehold Valuation Tribunal)?
10.4 Has any recognised tenants' association served notice under section 30B of the Landlord and Tenant Act 1985 asking to be consulted about, or to receive details of, any managing agents for the Property?
10.5 Have the Tenants exercised their rights to a management audit under section 76 of the Leasehold Reform, Housing and Urban Development Act 1993?
10.6 Have the Tenants of any long leases (as defined in enquiry 17) exercised either:
(a) the right to appoint a manager under section 21 of the Landlord and Tenant Act 1987; or
(b) the right to manage under the Commonhold and Leasehold Reform Act 2002?
10.7 Unless apparent from the Tenancy Documents supplied, what is the service charge accounting period?
10.8 Please give details of the annual service charge (for the Property as a whole) for the last three years (or longer if available) including copies of all certificates, auditors' reports, accounts and other documents relating to its calculation and apportionment.
10.9 Please supply all of the following:
(a) a schedule of any services you provide to the Property and a breakdown of the costs of each service;
(b) details of any planned maintenance programme and projected expenditure;
(c) details of any sinking fund or reserve account and confirmation of whether it is held in a separate trust account; and
(d) details of the estimated annual service charge for the current period for the Property as a whole (not each Lettable Unit).
10.10 In relation to each Let Unit please state:
(a) what proportion of the service charge is attributed to that Let Unit and how that proportion is calculated;
(b) whether there has been any variation of this proportion and whether any is contemplated;
(c) whether there are any capping or weighting provisions agreed with the Tenants; and
(d) whether there have been any disputes regarding the proportions payable?
10.11 Please confirm that, if the Property were fully let then the total cost of providing the services would be recoverable from the Tenants of the Let Units. How do you deal with the proportion of service charge attributable to any Lettable Units that are not currently Let Units?
10.12 If there are service charge arrears for any Let Unit please:
(a) state what sums are currently due but are unpaid; and
(b) provide a schedule of all service charge arrears over the past three years.
10.13 Please supply:
(a) details of any expenditure that has been incurred by you in providing services to the Property since the end of the last Service Charge year; and
(b) copies of any estimates received in relation to service charge expenditure for the current Service Charge year, or from service charge contractors and evidence of consultation with the Tenants in respect of such expenditure.
10.14 Except as already disclosed, have there been any complaints or disputes relating to the service charge? If yes, please give details, including in relation to any applications made to the First-tier Tribunal (Property Chamber) (previously called the Leasehold Valuation Tribunal) or to the court in respect of such complaints or disputes.
10.15 Except as already disclosed, please provide copies of the following:
(a) any insurance policies and service and maintenance contracts for lifts and plant at the Property;
(b) any contracts for the provision of cleaning, security and other services at the Property; and
(c) contracts for the supply of gas, electricity, oil or other fuel to the Property.
10.16 Please give details of:
(a) any managing agents; and
(b) any permanent staff employed for on-site management of the Property.
10.17 What regulations have you made for the use and management of the Property that are not set out in the Tenancy Documents supplied?
10.18 Please supply copies of any correspondence between you and any Tenant in relation to the Control of Asbestos Regulations 2012 or comparable predecessor regulations.
10.19 Please supply copies of any correspondence between you and any Tenant in relation to any costs and expenses arising as a result of the Carbon Reduction Commitment Energy Efficiency Scheme in relation to the Property or, if appropriate, in relation to the building of which the Property forms part.
If a tenant does something which gives rise to a claim on the landlord's insurance, then as it is the landlord rather than the tenant who is the insured, the insurance company may pursue its own claim against the tenant who caused the loss, to recover the amount of the insurance claim. This is known as the insurance company's right of subrogation. This is considered to be unfair to the tenant if the tenant pays the cost of the insurance premiums. A tenant will usually therefore try to negotiate that the insurance company waives its rights of subrogation. In practice that is believed to be the common law position where the tenant pays the insurance premium, following the case of Mark Rowlands Ltd v Berni Inns Ltd [1986] QB 211, but the position is not free from doubt.
11.1 Please state:
(a) what proportion of the insurance costs for the Property is allocated to each Lettable Unit and how that proportion is calculated;
(b) whether there has been any variation of this proportion for any Lettable Unit and whether any is contemplated;
(c) whether there have been any disputes regarding the proportions payable;
(d) what sums in respect of insurance costs for the Property are due but currently unpaid; and
(e) whether any Tenants have exercised their rights under section 30A of the Landlord and Tenant Act 1985 to require a summary of the insurance, or to inspect the policy of insurance, relating to the Property or the Let Unit?
11.2 What, if any, arrangements have been made to exclude the insurer's right of subrogation against any of the Tenants?
The Buyer will be concerned to know the nature of any breach and whether it has been waived by the continued demand or acceptance of rent. The Seller should include not only breaches of the tenant covenants under the Tenancies but also any breaches of the landlord covenants for which the Seller is liable. The Buyer will want to know whether there are any continuing breaches of any landlord covenants, for which the Buyer may be liable on completion of the Transaction, and also in relation to any breaches, whether by landlord or tenant, what enforcement action has been taken, if any.
In relation to each current Tenancy:
Except as already disclosed in replies to CPSE.1 or in reply to other enquiries in this CPSE.6, please give details of:
(a) any disputes or complaints whether or not resolved; and
(b) any breaches or alleged breaches of covenant including details of any waiver whether express or implied.
13. Enfranchisement and extension
13.1 Have any notices been served under any of the following:
(a) Part I of the Leasehold Reform Act 1967;
(b) Part I of the Leasehold Reform, Housing and Urban Development Act 1993; or
(c) Part II of the Leasehold Reform, Housing and Urban Development Act 1993?
13.2 Please provide full details of any notice referred to in the reply to enquiry 13.1, including a copy of the notice, any counternotice and all subsequent correspondence.
14. Residential tenants' rights of first refusalIn this enquiry, references to the Building are references to the Property or to the building of which the Property forms part, and references to the LTA 1987 are references to Part I of the Landlord and Tenant Act 1987, as amended.
14.1 Does the Building contain two or more flats, as defined by section 60(1) of the LTA 1987? If the answer to this enquiry is "No", please proceed direct to enquiry 14.6.
14.2 Are two or more of the flats in the Building held by qualifying tenants, as defined in section 3 of the LTA 1987? If the answer to this enquiry is "No", please proceed direct to enquiry 14.6.
14.3 Does the number of flats in the Building held by qualifying tenants exceed 50% of the total number of flats (whether let or not)? Please supply full details of:
(a) the number of flats in the Building;
(b) those flats which are let and those which are unlet; and
(c) which tenants are and are not qualifying tenants and why.
If the answer to this enquiry is "No", please proceed direct to enquiry 14.6.
14.4 If part only of the Building is used for residential purposes, does the internal floor area of that part represent 50% or more of the internal floor area of the Building as a whole (disregarding common parts)?
Please give details of the areas of that part of the Building used for residential purposes and of the remainder of the Building.
If the answer to this enquiry is "No", please proceed direct to enquiry 14.6.
14.5 Is the Landlord any of the following:
(a) an exempt landlord (as defined in section 58(1) of the LTA 1987);
(b) a resident landlord (as defined in section 58(2) of the LTA 1987); or
(c) a landlord who is not the immediate landlord of the qualifying tenants (except in the circumstances specified in section 2(2) of the LTA 1987)?
14.6 Please supply copies of all notices and responses to notices served or received by you (or, to your knowledge, any predecessor in title) in respect of the Building pursuant to the LTA 1987, together with copies of all correspondence sent or received by you (or, to your knowledge, any predecessor in title) in respect of the Building relating to the LTA 1987.
15. Rent Act 1977 tenanciesWhere any Tenancy is regulated under the Rent Act 1977, please answer the following enquiries:
15.1 Please state:
(a) when the Tenancy was first granted;
(b) whether the rent is registered and, if so, the amount of the current registered rent and the date of the most recent registration; and
(c) whether there has ever been a statutory succession of the Tenancy and, if so, full details of each such statutory succession.
15.2 If not already supplied with the Tenancy Documents please provide copies of
(a) the rent book;
(b) the most recent rent register; and
(c) any Notice of Increase (in rent) served and evidence of its service.
15.3 Where any Tenancy is considered to be a letting by a resident landlord under section 12 of the Rent Act 1977, please state:
(a) (unless apparent from the Tenancy Documents supplied) when the Tenancy was granted;
(b) the property occupied by the Landlord (including any family members) when the Tenancy was granted;
(c) whether you or any predecessor in title has continuously occupied that other property since the Tenancy was granted; and
(d) (where relevant) what steps (if any) you have taken, or propose to take, to terminate the Tenancy and recover possession.
15.4 Where any Tenancy is considered to be a restricted contract under sections 34-36 of the Housing Act 1988, please state:
(a) (unless apparent from the Tenancy Documents supplied) when the Tenancy was granted;
(b) what furniture or services the Landlord is contractually obliged to supply to the Tenant;
(c) what furniture or services the Landlord actually supplies to the Tenant; and
(d) (where relevant) what steps (if any) you have taken, or propose to take, to terminate the Tenancy and recover possession.
15.5 Where any Tenancy is considered to be a protected shorthold or a periodic protected tenancy under section 52 of the Housing Act 1980, please state:
(a) (unless apparent from the Tenancy Documents supplied) when the Tenancy was granted;
(b) what steps were taken to ensure that the statutory requirements for the creation of a protected shorthold tenancy were met;
(c) (where relevant) what steps (if any) you have taken, or proposes to take, to terminate the Tenancy and recover possession; and
(d) what steps (if any) have been taken by the Tenant to terminate the Tenancy.
16. Secure tenanciesWhere any Tenancy is considered to be a secure tenancy for the purposes of the Housing Act 1985, please answer the following enquiries:
16.1 (unless apparent from the Tenancy Documents supplied) when was the Tenancy granted?
16.2 Has there ever been a statutory succession of the Tenancy? If so, please provide full details of each such statutory succession.
16.3 Where relevant, what steps (if any) you have taken, or propose to take, to terminate the Tenancy and recover possession?
16.4 Where relevant, please state the statutory grounds upon which you propose to seek to recover possession.
16.5 Is there any right to buy application pending? If so, please supply full details.
17. Long leases
17.1 Were any of the current Tenancies originally granted for a term certain of more than 21 years ("long leases")?
17.2 Have any applications been made under section 35 of the Landlord and Tenant Act 1987 for the variation of any of those long leases?
17.3 Are any of the Tenants under those long leases continuing in occupation of the relevant Let Unit pursuant to Schedule 10 of the Local Government and Housing Act 1989 or Part 1 of the Landlord and Act 1954?
17.4 For any Tenancy which is a long lease for the purposes of the Local Government and Housing Act 1989, please answer the following enquiries:
(a) For how long has the current Tenant been the tenant of the Let Unit comprised in the long lease?
(b) Have any notices been served to terminate the long lease or to propose a statutory tenancy? If so, please provide full details.
18. Assured tenancies and assured shorthold tenancies
An assured tenancy created before 28 February 1997 could not take effect as a shorthold tenancy unless the landlord first served a health warning notice on the tenant in a prescribed form.
Where any Tenancy is considered to be an assured tenancy or an assured shorthold tenancy under the Housing Act 1988 (as amended by the Housing Act 1996) please answer the following enquiries:
18.1 Was the Tenancy granted to a person who, immediately before the Tenancy was granted, was a protected or statutory tenant or sub-tenant of the Landlord?
18.2 For how long has the current tenant actually been in occupation of the Let Unit?
18.3 For any assured shorthold tenancy created before 28 February 1997, what steps were taken to ensure that the statutory requirements for the creation of an assured shorthold tenancy were met?
18.4 Have any notices been served by either the Landlord or the Tenant in relation to the Tenancy? If so please provide full details.