Business Tenancies Research Articles

Efforts of South Korean Local Governments to Expand the Good Landlord Movement: Focus on Property Tax Reduction and Exemption

Purpose: This study aimed to review whether local governments in Korea introduced the Good Landlord Property Tax Reduction and Exemption System (GLPTRES) in a timely and organic manner and promoted the expansion of the Good Landlord Movement by analyzing the system's problems and proposing improvements. Design/methodology/approach: To obtain data about the GLPTRES and tax reduction and exemption outcomes, this study used the Ministry of the Interior and Safety's Information Disclosure System. On January 26, 2022, the researcher requested information disclosure about 15 regional local governments and 187 basic local governments under such regional local governments. Between January 27 and February 25, 2022, the author was notified by all basic local governments of their decisions to disclose information or the non-availability of such information, which was reflected in the analysis. Findings: The timing of property tax reduction and exemption decisions for good landlords was generally late. There was a relationship between regional local governments and their basic local governments in its implementation. Furthermore, the effectiveness of the GLPTRES was found to be generally low. Research limitations/implications: The period of this study was restricted to 2020, and the analysis focused on the 123 local governments that implemented this system. The lessons learned from Korea can be applied to other countries implementing government support for small businesses during crises. Originality/value: This is the first study to analyze the timeliness of resolutions made by local governments on the GLPTRES implemented in Korea for the first time in 2020 to support small business tenants in trouble due to COVID-19, the relationship between local governments, and its effectiveness.

Dilapidations update: The effect of the COVID-19 pandemic on insolvency claims and landlord and tenant disputes

This paper addresses the ongoing impact of the COVID-19 pandemic on insolvency claims and real estate disputes between landlords and tenants. In particular, focus is given to the effect on, and changing consumer patterns in relation to, the retail and hospitality sectors and the knock-on effect this has had on landlords of business tenants. The number of company voluntary arrangements (CVAs) has grown significantly and is likely to remain high throughout 2021 and into 2022. While the Government tried to reduce the number by the introduction of the CIGA 2020 Restructuring Plan, which has several benefits over the usual CVA route, this is but one of various pieces of legislation brought in by the Government in an attempt to address the issues raised by COVID-19. There have been many restrictions introduced which limit landlords and their ability to bring insolvency claims, to seek forfeiture of a lease or to pursue rent arrears which are being phased out as of 1st October, 2021, with some landlord restrictions being wholly removed by 30th March, 2022. From recent government announcements, it appears some of the restrictions are here to stay. While both tenants and landlords struggled to survive in the midst of the UK’s national lockdowns, the Government now seems to be making it clear the economy is open for business, not quite as usual, but heading in that direction. It remains the case that some are still struggling and that negotiation with regards to payment of rent and possible rent reductions are an important tool on both sides. It will also be important for landlords to consider their options with regards to seeking repayment from third parties should it prove unviable to recover from tenants directly. Overall, it is likely we will see a change in the relationship between landlords and tenants and the terms on which they are willing to engage in the future.

Lease Price Differentiation and its Influence on the Attraction of Micro, Small and Medium Enterprises’ (MSMES) to Major Shopping Malls in Zambia

Abstract Subject and purpose of work: Based on community-wide charges that shopping malls discriminate against small business tenants, this paper seeks: firstly to identify the principal determinants of shopping mall rentals, and secondly to understand if there exists a statistically significant dispersion in rentals against MSMEs. Materials and methods: Relative Importance Index and SPSS (statistical tests) were used to analyze the survey-based data which was acquired from eleven shopping malls in Lusaka. Results: The MSME tenants pay on average $20.32/m2 more t han anchor tenants and $19.12/m2 more than chain stores, ironically on account of capital limitations. MSMEs also face an additional risk during sudden economic shocks due to untenable lease provisions and poor negotiating influence. Conclusions: The study concludes by acknowledging that the MSME sector is covertly vitiated by the imposition of high rental premiums. It recommends that shopping malls should have an affirmative simpler letting policy. Furthermore, a shopping mall association should-be commissioned to exclusively safeguard the interests of MSMEs.

COMPENSATION FOR BUSINESS TENANTS: MISCHIEF AND MALADY

AbstractThis article focuses upon the provisions and underlying policy of the Landlord and Tenant Acts of 1927 and 1954. It surveys the mischief that each Act was designed to address and, from the perspective of compensation for business tenants, examines critically the legislative response. It demonstrates that the safeguards afforded by the 1927 Act were poorly conceived, ill-constructed and ineffectual. Although the 1954 Act was intended to instil simplicity, certainty and fairness, it fails on all counts. The law remains highly technical, unduly complex, arbitrary in operation and in need of major overhaul.

The Business Tenancies (NI) Order 1996: to agree or not to agree?

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Compensation for disturbance under the Business Tenancies (NI) Order 1996: some queries

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Willing landlords, unresponsive business tenants

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When leases end: Some thoughts on recently reported cases

This paper considers three recent cases that look at different situations when leases end. The first of these concerns a landlord’s determination to defeat a business tenant’s statutory security of tenure under the Landlord and Tenant Act 1954, where the landlord’s intention to redevelop was designed for that purpose. In particular, is the landlord’s motive relevant to their intention to redevelop? The second case looks at whether a tenant had failed to give vacant possession of premises on the break date in their lease, when they had served notice and given up occupation of the premises. In particular, had they failed to comply with a pre-condition for a valid exercise of the break option and thereby lost the opportunity to break the lease which then continued for a further five years? The final case considers dilapidations. Whilst a breach of a repair is a continuing breach, can a landlord by words or actions temporarily waive a tenant’s repairing obligation, such that the tenant is only obliged to repair the premises with effect from the date that the obligation is reinstated?

Peningkatan Kapasitas Entrepreneurship Melalui Pelatihan dan Magang Bagi Tenant di Universitas Muhammadiyah Sidoarjo

Universitas Muhammadiyah Sidoarjo is one university located in Sidoarjo from year to year working to improve its quality. During this time centered on the entrepreneurial activities of SMEs entrepreneurial student affairs, but in an increase in the capacity to be entrepreneurial is not optimal. The purpose of science and technology program for Entrepreneurship (IBK) at the University of Muhammadiyah Sidoarjo (UMSIDA), namely the establishment of new independent entrepreneurs tenacious, resilient, creative and able to provide innovation into market demand. With the IBK this program, students are expected to be part of society that can create jobs, reduces unemployment and become change agents of social life that is more powerful and useful. Method approach entrepreneurship capacity building program is using PALS (Participatory Action Learning System). So that the target output of this activity is the training to increase the capacity of tenants (students) in biddng kewirauahaan and to improve the quality of products for business tenants.

Landlord and Tenant Act 1954: time for a change?

Purpose – This legal update examines recent decisions on the security of tenure given by Landlord and Tenant Act 1954 to business tenants, and asks whether it is time to revisit or remove a piece of legislation that was drafted to deal with the consequences of war damage and short supply of commercial premises during the 1950s. It highlights the narrow, technical rules and distinctions that make little sense to commercial parties. The paper aims to discuss these issues. Design/methodology/approach – The paper considers recent court rulings in the light of the original purpose of the Landlord and Tenant Act 1954, focusing on provisions that were reformed in 1969-reflect changes in market conditions since the immediate post-Second World War period. Findings – Narrow, technical rules and exceptions carry considerable risks for commercial landlords and may not be appropriate or necessary in current market conditions. Research limitations/implications – The paper examines only a recent selection of court rulings, but highlights the potentially harsh impact on commercial landlords of legislation designed to protect tenant interests in market conditions radically different from those prevailing some 60 years after its enactment. Practical implications – With no immediate prospect of reform, the paper highlights the need for landlords to adhere closely to the precise technical requirements of the Act. Originality/value – The paper is based on the author’s reading and analysis of recent Court of Appeal rulings.

Issues that commonly have an impact upon corporate occupiers and how they can be avoided with appropriate foresight and planning

A corporate occupier party to a commercial lease on standard terms can reasonably expect to encounter a wide variety of issues during the life of its tenancy. At the heads of term and lease negotiation stages, matters including protection under the Landlord and Tenant Act 1954 (the Act) and rent review clauses will be considered, together with the relevant implications. As the tenancy progresses, common landlord-tenant exchanges may involve processes such as the application of service charge mechanisms, conduct of rent reviews and applications for landlord consents to alter, assign or sub-let to enable an occupier to deal with a property more freely. Towards the end of a lease, issues concerning business tenancies may once again arise, as parties consider how Act rights should be best utilised or defended. Also of importance may be the exercise of break clauses, an area of practice that commonly creates major disputes. Finally, not all disputes require a landlord and tenant relationship, for example third party neighbour matters such as disputes regarding rights to light and nuisance. This paper considers these issues from a practical, commercial and legal perspective.

SECTION 30(1)(g) OF THE LANDLORD AND TENANT ACT 1954: THE UNJUST RELEGATION OF RENEWAL RIGHTS

AbstractPart II of the Landlord and Tenant Act 1954 regulates the renewal of business tenancies. Within highly technical confines, it promotes the continuation of the tenant's business and addresses the risk of tenant exploitation. Nevertheless, it is argued that section 30(1)(g) unnecessarily prioritises the occupation needs of the landlord over the tenant's renewal rights and without imposing effective procedural safeguards. Although compensation for loss of renewal rights may be available, the award disregards any loss of established goodwill. This inadequacy of compensation undermines the anti-profiteering ethos of the Act and contravenes Article 1 of the European Convention on Human Rights.

Material compliance and conditional break clauses: some implications for practice

PurposeThe purpose of this research is to examine the awareness and understanding of break clause management by small business tenants in the light of the Appeal Court decision in Fitzroy House Epworth Street (No. 1) Ltd and another v. The Financial Times Ltd [2006].Design/methodology/approachThe empirical data were collected using detailed questionnaires distributed to occupational tenants in three sub‐markets across the West Midlands. The questionnaire incorporated Likert‐scale and close‐response questions.FindingsThe general conclusions were that the tenants surveyed were dangerously unaware of the barriers that exist in trying to effect break clauses, a position exacerbated by the decision in Fitzroy.Practical implicationsThe research points to an increasing need for tenants to be made more aware of the technical and management problems that surround the option to determine clause.Originality/valueThe paper offers an applied examination in an important aspect of contemporary lease management. It provides a platform on which to base further studies in other geographical areas for comparative and aggregate purposes.

Flexible Property Leasing and the Small Business Tenant

Small businesses and commercial property leasing are two important policy areas for the UK Government. Hence, it has been promoting flexibility and choice in commercial leases as part of a wider enterprise and productivity agenda, and attempting to improve the awareness of small business tenants on property leasing issues. This article addresses issues of flexible leasing specific to small business tenants. Through an analysis of lease data from Investment Property Databank and a questionnaire survey of tenants in England and Wales, it examines the negotiation process, outcomes, and trends stemming from that process. There are major differences between small business leases and those for medium and larger sized companies. Small businesses have shorter leases, fewer rent reviews and earlier breaks. There are also differences in the negotiation process, most noticeably as between the very small micro business and other small businesses. A significant number of very small tenants take no commercial advice when negotiating leases even though many of them have no prior experience of taking leases; the smaller the business the less likely they are to take advice. While flexibility and choice in leasing has improved in recent years, the awareness of small business tenants on leasing issues is less good. Part of the problem may lie in the difficulties of dissemination to a diverse group. However, if voluntary mechanisms cannot demonstrably improve information flows to micro businesses, the small business issue may yet be the catalyst for legislation on all business leases, legislation the UK property industry has fought desperately to avoid for the last 13 years.

The statutory regulation of business tenancies: private property, public interest and political compromise

The need for the statutory regulation of business tenancies was officially recognised towards the end of the nineteenth century. The mischief complained of was that some landlords held their tenants to ransom by demanding an inflated rent as a condition of a lease renewal. This was particularly harsh for the tenant who had built up business goodwill and carried out improvements to the premises. Despite the organisation of commercial tenants and the growth of political lobbying, it was not until Landlord and Tenant Act 1927 that controls emerged which provided compensation for loss of goodwill and improvements. The inadequacy of these provisions, however, entailed that tenant discontent and lobbying persisted until the enactment of the Landlord and Tenant Act 1954. This paper charts the social and political change which brought about this significant retreat from market forces and the gradual recognition that security of tenure, as opposed to financial safeguards, was the necessary response. The controls established in 1954 have, remarkably, survived almost intact and, subject to some fine tuning, will continue to do so. This paper addresses the issue why the commercial code has, in marked distinction to its residential and agricultural counterparts, remained immune to shifts in political policy during a sustained period of deregulation in landlord and tenant law.

Business tenancies and interventionism: the relegation of policy?

Part II of the Landlord and Tenant Act 1954 is a measure of protective legislation that concerns purely commercial relationships and it is apparent that the degree of protection, and the need to redress inequality, is less than, say, with the housing market. The Act represents an unusual and complex measure of political and economic engineering. By an interference with the parties' freedom of contract, the policy of the Act is to provide security of tenure and to promote equality ofbargaining strength between commercial landlord and tenant. The aim was to prevent a tenant at the end of the contractual term facing business closure or being compelled to accept a new lease at an exorbitant rent. Although a derogation from the common law rights of the landlord, the Act was intended to make only limited inroads on the free market. In contrast to such areas as employment law and residential lettings, the transition from contract to status was to occur with a minimal disruption of market forces.

‘Practical Property Problems 1986’

The occasion of the expiry of a lease is an important time. It brings to an end a lease which may have run for 10, 20 or many more years and it provides a mutual opportunity for landlord and tenant to concentrate their minds on the appropriate action to take. I propose to limit my comments to business tenancies.

Renewal of business tenancies

Renewal of business tenancies

The Law of Landlord and Tenant

Part A - Creation of Tenancies. Relationship of Landlord and tenant. Leases and licences. Creation of form and leases. Part B - Rights and Obligations of the Parties. Covenants generally. Implied covenants. Express covenants. Rent and rent review. Repairing obligations. Rights and liabilities as between landlord or tenant and third parties. Devolution of title. Part C - Termination of Tenancies. Modes of termination. Landlord's rights on termination. Tenant's rights to fixtures. Part D - Residential Tenancies. Rent Act protected and statutory tenancies. Assured tenancies. Special residential tenancies provisions. Long residential tenancies. Part E - Business Tenancies. Application of Part II of the 1954 Act. Restrictions on contracting out. Continuation and termination of business tenancies. Grounds of opposition. Dismissal of tenant's application. Court order of a new tenancy. Compensation for improvements. Part F - Agricultural Holdings. Introduction and terms of the tenancy. Variation of the terms of the tenancy. Notice to quit and succession. Rights on termination. Tenant's rights to compensation. Market gardens. Arbitration. Smallholdings and allotments. Part G - Secure Tenancies. Secure tenancies.