The latest property quarterly update aimed at in house lawyers (and other professionals) practising in the property / real estate sector.
The Court of Appeal has reinstated conventional wisdom by ruling that a standard fencing covenant should not be treated as a fencing easement.
A breach of a room size tolerance provision in an agreement for lease does not necessarily give the tenant a right to refuse to complete the lease.
One of the covenants given by a guarantor in a licence to assign was construed as a sub-guarantee and was therefore valid.
A widely drafted landlord’s reservation of a right of entry was given a narrow interpretation by the court.
The court considers the meaning of the phrase “detailed planning permission” in an overage agreement.
A rare case on the validity of the process to contract out of the security of tenure provisions contained in sections 24 to 28 of the Landlord and Tenant Act 1954.
This consultation was launched by the Ministry of Housing, Communities & Local Government in July 2018.
The initial consultation proposed a minimum three year tenancy term, with a six month break right for either party. However, the responses to the consultation showed no consensus around a mandatory tenancy length.
The government is therefore proposing instead to repeal section 21 of the Housing Act 1988 (the 1988 Act), which currently allows a landlord to terminate an assured shorthold tenancy at the end of the contractual term by giving the tenant at least two months' notice, without having to prove any fault on the tenant's behalf. In addition, the government is also proposing to strengthen the existing grounds for eviction under section 8 of the 1988 Act (to include where owners wish to sell or move in themselves) and to simplify the court processes to make it easier for landlords to obtain possession.
The next stage is the launch of a new government consultation on the details of these proposed reforms.
A copy of the government’s response to the initial consultation can be viewed from here.
The RICS has published another consultation on a new code to replace the existing 2007 code (it has been significantly amended since the initial consultation last year). For the first time, it will form part of an RICS professional statement, setting specific mandatory requirements for members, as well as other best practice recommendations. The objective is:
“to improve the quality and fairness of initial negotiations on lease terms and to promote the issue of comprehensive heads of terms that should make the legal drafting process more efficient”.
One of the mandatory requirements in the professional statement is that lease negotiations must be approached in a constructive and collaborative manner. Another provides that where a party is unrepresented, it must be advised about the existence of the code and must be recommended to obtain professional advice.
The professional statement provides that the landlord (or its letting agent) is responsible for ensuring that heads of terms are in place before an initial draft lease is circulated. It goes on to set out the minimum details that must be included in written heads of terms for a vacant possession lease (stated to be ‘subject to contract’). These are as follows:
These details must also be included in heads of terms on lease renewal or extension, except for any terms that are stated to follow the tenant’s existing lease subject to reasonable modernisation.
As with the current code, the new code also contains provisions on best practice for lease negotiation (these are not mandatory and the RICS recognises that there may be exceptional circumstances where it is appropriate for RICS members to depart from the provisions).
As well as the new code, the professional statement also contains a template heads of terms that mirrors the code, a minimum heads of terms checklist (for use where landlords or their agents wish to use their own template) and a supplemental guide (describing some of the main factors for the parties to consider when agreeing a lease).
The consultation ran until 5 May 2019. A copy of the draft professional statement can be downloaded from here.
This report follows the Committee’s pre-legislative scrutiny of the Bill, which will establish a public register of beneficial owners of overseas entities that own or buy land in the UK (to be maintained by Companies House) by 2021.
Key points made in the report include the following:
A copy of the report can be viewed from here.
New versions of CPSE.1 (3.8), CPSE.2 (3.4), CPSE.4 (3.3), CPSE.5 (3.3) and CPSE.7 (1.3) have been published. The changes are minor and mainly remove references to the Carbon Reduction Commitment Energy Efficiency Scheme. There is also an additional enquiry 32.10 in CPSE.1 to cover the new capital allowances on structures and buildings.
A new version (1.4) of the MCL has been published. It can be downloaded (in its different guises) from here.
A document summarising the main changes from the previous version can be downloaded from here (along with a redline version of the changes made to the lease of part of an office and a summary of the changes to the interpretation provisions).
Particular points to note are as follows:
The Law Society has updated this form to coincide with the new Code for Completion by Post (the Code) which took effect on 1 May 2019. Although the changes are minor, it is important that the latest version of the form is used (apart from anything else, the paragraph numbering in the Code has changed, so the old 2nd edition form now refers to wrong parts of the Code).
Details on the changes can be viewed from here (where a specimen copy of the new form can also be downloaded).
The Land Registry has announced that from 20 September 2019, it will no longer accept prescribed forms (e.g. a TR1 or a TP1) submitted for registration executed by a company or an LLP where the execution clause uses the words "signed as a deed". Instead, the words "executed as a deed" must be used.
Over 40 property developers and freeholders have signed a government-backed industry pledge committing themselves to helping leaseholders that are trapped by onerous lease terms.
Amongst other things, freeholder signatories undertake proactively to identify leases in their portfolio where the ground rent doubles more frequently than every 20 years, to contact the affected leaseholders and to offer to amend any increase to one linked to the retail prices index. Freeholder and developer signatories also commit to not including such clauses in new leases.
A copy of the pledge can be viewed from here.
This has been published by the LPSLG in an attempt to agree a common industry wide approach to the issue of property fraud, particularly in the light of recent case-law.
The protocol itself is very short (just the four bullet-points on the second page). Basically, it states that buyer's solicitors should not as a matter of routine ask for confirmation of identity or anti money-laundering checks from the seller's solicitors. Instead, the contract should include a clause requiring the seller's solicitors to give an undertaking on completion that they have the seller's authority to receive the purchase money on completion (which can be achieved by adopting the Law Society Code for Completion by Post (2019)).
The form of suggested contract wording is at the end of the protocol.
A copy of the protocol can be downloaded from here.
Professional Development Lawyer
david.harris@brownejacobson.com
+44 (0)115 934 2019
Browne Jacobson’s private client practice has been ranked as Band One in the 2022 Chambers and Partners High Net Worth Guide for its work in private wealth law.
Conservation Covenants come into force on 30 September 2022. We look at the impact on landowners, developers and responsible bodies.
In March the government proposed a number of changes to the Building Safety Bill. The new amendments propose additional protection for leaseholders to prevent them from being charged for cladding work if they own up to three properties.
The Upper Tribunal (Lands Chamber) could not impose rights under the Electronic Communications Code 2017 where the operator’s expired lease was protected by Part II of the Landlord and Tenant Act 1954.
The latest real estate update aimed at in house lawyers (and other professionals) practising in the property / real estate sector.
Issues about prescriptive rights of way and drainage arose on the redevelopment of dominant land.
The latest property quarterly update aimed at in house lawyers (and other professionals) practising in the property / real estate sector.
A widely drafted landlord’s reservation of a right of entry was given a narrow interpretation by the court.
Last month the government’s advisory Committee on Climate Change published a report urging the government to commit to cutting greenhouse gases by 100% by 2050 when compared to 1990 emissions (known as net-zero).
Brexit has brought with it a great deal of uncertainty for environmental law.
Repaving of land was sufficient evidence on its own to establish a claim for adverse possession of that land.
A couple of cases on the interpretation of easements create no new law, but illustrate a couple of important points.
Failing to assign the copyright in plans on or before completion could have meant that a seller’s notice to complete was invalid.
The Upper Tribunal turns conventional wisdom on its head by ruling that an easement could be implied into a mortgage of part under the rule in Wheeldon v Burrows.
As private businesses, public bodies and universities alike strive to gain a competitive advantage, each increasingly look to each other to develop next generation products and services.
The Government has launched a consultation to consider the introduction of 'Conservation Covenants'.
