Glossary – L

Landlord and Tenant Acts

Landlord’s Consent – Many commercial lease clause’s are tolerant and forbearing, which allow a tenant to make changes or alterations to the property. Although in many cases the landlord’s formal consent is needed, which the lease will contain how this can be obtained and documented.

Lease – A legally binding contract that covers the basis on which a tenant is permitted to occupy the landlord’s property.

Lease Expiry/Renewal – The Landlord & Tenant Act 1954 restricts the way in which a business tenancy may be discontinued. Therefore a tenancy cannot end unless it is terminated in accordance with certain provisions

Leasehold Valuation Tribunal – a body that deals with disputes over service charges and the purchase of leasehold property by tenants holding long leases. It can also appoint managers of leasehold properties when the landlords’ managers are not acceptable. Leasehold valuation tribunals started operating in 1997 whereas previously county courts handled these disputes.

Lease Regear – Consists of renegotiating a lease during it’s term. Usually to extend the tenant’s commitment to the property, through extending the term length or removing a break option. It’s not unusual for the tenant to receive a rent free period in return.

Lease Renewal – Consists of renegotiating a lease with the tenant at the end of the current lease’s contract.

Lease Security – Otherwise know as “Security of Tenure”. The tenant of a commercial premise will have the right to remain in its occupation plus secure a new tenancy unless the parties have opted(contracted out) out of the Landlord and Tenant Act 1954.

Lease Surrender – A agreement to end the lease contract before its expiry nor exercising it’s break option. It usually involves negotiating a surrender premium from one party to the other.

Lease Term – The period or length of time that the lease will run for, they cannot be open ended or undetermined.

Leasehold – Effective ownership over the property or land for the duration of the lease, typically long leases for property e.g. 90+ years. Once the lease has ended the property returns to the original landlord.

Lessee – Legal term for “tenant”.

Lessor – Legal term for “landlord”.

Letting Agent – An letting agent is a person who has the power to represent another legal party (landlord) and has the power to receive income of the non-resident landlord’s rental business, or has control over the direction of that income.

Licence – A license allows an activity to continue and be legal, when otherwise it have been wrongful. This can span a series of examples including lodgers, allowing a tenant to carry out alterations or to sub-let

Lifetime Cost – The total costs relating to holding a property over its lifetime. These costs include business rates, utility bills, maintenance spend and the initial cost to purchase the property.

Liquidity – The capacity to change an asset(property, investment) into cash within a certain duration of time.

Loan to Value (LTV) – The proportion that a bank will lend you as a loan compared to the value of your property. The bank will divide the loan amount by the property’s value to determine the LTV e.g. £80,000 loan divided by £100,000 property value = 0.8 = 80% LTV.

Loan Valuations – A lender will require a loan valuation before receiving the capital to purchase a property. This is to ensure the asset’s value meets the equability and security criteria of the loan contract.

Long Leasehold – Almost all flats (apartments) in England and Wales are owned leasehold. A long leaseholder (tenant) has purchased the leasehold interest and therefore has the right to occupy the property for a fixed term of years. As tenant the leaseholder has certain rights and responsibilities to the landlord who is obliged to manage and maintain the whole building and the common parts.

Loss of Rent – The amount of rent that the landlord has lost because the tenant has broken the terms of their lease.