News

Update – CPI 64 – January 2009

The January 2009 edition of the Commercial Property Information Update has been published on this website.

If you are a subscriber (and you are logged in) you can access the update by clicking on CPI Update – January 2009 and opening the attachment.

The January 2009 issue of the CPI Update contains:

Case law commentary on:

• A worrying case on contracting-out of the 1954 Act – Newham LBC v Thomas-Van Staden;
• A landlord’s refusal of consent to assign – Royal Bank of Scotland plc v Victoria Street (No 3) Ltd;
• Restrictive covenants preventing a nuisance or annoyance – Dennis v Cameron;
• Parking easements – Virdi […]

EPCs – the end of the transitional period

This news item is simply a reminder that the transitional EPC rules for commercial buildings, which had postponed the EPC requirement in many current commercial transactions, have now expired. Unless the building is specifically exempted by the regulations, as from 4 January 2009, all commercial sales or lettings should be accompanied by an energy performance certificate. In addition, by virtue of the same original 2007 regulations, the first inspection of all air-conditioning systems with an output of more than 250 kW should also have occurred by 4 January 2009 (unless the system was first installed on or after 1 […]

ID procedure – Chief Land Registrar’s Direction

A number of readers have questioned the legislative basis of the new Land Registry identification procedure. Although the new ID procedure came into force at the same time as the Land Registration (Amendment) Rules 2008, the ID procedure is not contained in those rules. It is based on a Chief Land Registrar’s Direction issued under section 100(4) Land Registration Act 2002. To view the text of the direction, click on Registrar’s ID Direction.

Note that the exception in favour of UK banks and building societies only applies where it is the bank or building society itself that is […]

Contracting-out of the 1954 Act – an accidental drafting error voids the order of the court

Take care with your lease drafting. A Court of Appeal case from earlier in the year, which has only just been fully reported, held that where a lease, which had seemingly been contracted-out of the 1954 Act by court order, demised a term for a fixed period of time, but stated (accidentally, one assumes) that the expression “the term” included any period of holding over or extension whether by statute, or at common law or by agreement, the effect of the drafting was to prevent the lease from being a “term of years certain”. Accordingly, the contracting-out had failed. Ouch! […]

SDLT – abnormal rent increase calculator

Highly relevant to tenants now that SDLT has passed its fifth anniversary are the SDLT rules relating to abnormal rent increases – see commentary in the December CPI Update. Where rents rise abnormally following the end of the fifth year of a lease, the increase can be regarded as a consideration for the grant of a new lease, and therefore subject to SDLT. Sadly, despite the complexities of ascertaining when an increase is to be regarded as abnormal, it appears that the Revenue has no intention of abolishing or overhauling the rules – as shown by today’s publication of an […]

VAT rate change – HMRC advice

Following the VAT rate change on December 1, HMRC has now made an announcement on the SDLT treatment of leases where VAT is payable on rents. See Calculating VAT on leases from 1 December 2008. As suggested in the CPI Update for December, a more complicated assessment of SDLT is now required, because VAT is now chargeable at 15% until 31 December 2009, and thereafter at 17.5%. Interestingly, HMRC state that the effect of the 1 December rate change is that rents which include VAT will be viewed, for SDLT purposes, as rents which are variable or uncertain; yet when […]

December 2008 Property Update

The December edition of the Commercial Property Information Update has been published on this website.

If you are a subscriber (and you are logged in) you can access the update by clicking on CPI Update – December 2008 and opening the attachment.

The December 2008 issue of the CPI Update contains:

Case law commentary on:

• The implications of a tenant’s administration – Innovate Logistics Ltd v Sunberry Properties Ltd;
• Midill (97PL) Ltd v Park Lane Estates Ltd – section 49(2) LPA 1925 and the return of deposits;
• Chantry Estates (South East) Ltd v Anderson – extending an option period;
• Alchemy Estates Ltd v […]

EPCs – expert guidance

The City of London Law Society has updated and republished its Guidance on the Application of the EPC Regime to Commercial Property, produced by the London Property Support Lawyers and the Association of Property Support Lawyers. This guide contains the pooled resources of a large number of expert professional support lawyers, and is well-worth reading where uncertainties arise as to how to interpret the EPC rules in commercial property transactions.

Build a bonfire

Land Registry is getting ready to set light to its mound of unwanted original title deeds. Many documents are now held by the Land Registry in electronic format. Retention of the original is therefore considered to be unnecessary. Whilst the paper originals of scanned documents have been stored in the past, the Land Registry has given notice on its website of its intention to begin destroying the originals on 28 February 2009. (5 November might have been more appropriate). If you want an original back, now is the time to act.

VAT rate change

VAT goes down to 15% on Monday. It will come back up again to 17.5% in 13 months time. (If you believe the Tories, it will go up again to 18.5% sometime thereafter). Remember that a chargeable consideration for SDLT purposes is taken to include VAT that is chargeable on the consideration. This means that, on acquisitions, the SDLT bill goes down. However, on new leases, although the SDLT bill also goes down, the calculation gets a little more complicated than one would wish – since, of course, you are required to make use of the rents (plus VAT) payable […]

When is a house not a house?

Q: When is a house not a house? A: When 88.5% of the house is now used as offices.

The Court of Appeal, in Grosvenor Estates Ltd v Prospect Estates Ltd [2008] EWCA Civ 1281 seems to have taken a different view from that expressed by Lord Neuberger in the penultimate paragraph of his opinion in Boss Holdings Ltd v. Grosvenor West End Properties Ltd [2008] 1 WLR 289 . In Boss, Neuberger opined that an 18th century building, which had originally been “designed” as a house, could remain a house for the purposes of the Leasehold Reform Act 1967 […]

Tenant insolvent? Landlord loses control

One suspects that tales of default and insolvency will come to dominate these pages over the next few months. This week’s case in the Court of Appeal – Innovate Logistics Limited (in Administration) v Sunberry Properties Limited [2008] EWCA Civ 1261 – shows how the process of administration can remove from the landlord the carefully negotiated controls imposed in the lease on use, occupation and disposal of the property. Once a tenant is in administration, a general stay on proceedings arises. Landlords will not be able to bring proceedings to enforce lease provisions without leave of the court, or the […]

New ID rules hitting home

The Law Society Gazette is carrying an article this week – Proof of identity rules will hit home hard – on the Land Registry’s new ID procedures.

Many concerns are being raised by delegates in training courses relating to the new rules. For example: What is the shelf-life of an ID Form? (There isn’t one). Can we take an ID form at face value if it appears to have been signed by a solicitor? (No. Check that the solicitor is genuine. The Land Registry may well do so.) Who is a “conveyancer”? (See rule 217 LRR 2003). Is a foreign […]

Amended content on the website

Following the introduction of the Land Registration (Amendment) Rules 2008, drafting of restrictions in Property PSL documents (i.e. transfer of part clauses, the deeds of easement and covenant, overage clauses, and the deed of positive covenant) has been amended. Previously, these documents provided a choice of either the old or the (slightly different) new style restriction. The old-style has been removed. (All of the now old-style standard form restrictions are still available at http://www.propertypsl.co.uk/node/51).

ID rules – Land Registry forms AP1, FR1 and DS1

(Very) temporary relief has been granted by the Land Registry in relation to the compulsory use of the new forms AP1, FR1 and DS2. Although these forms are supposed to be used in respect of all applications for registration lodged on or after 10th November, Land Regsitry announces on its website that it will allow continued use of the old versions of the forms for applications up to and including 21 November 2008. Applications lodged after that date with an old version of the form (or without compliance with the new confirmation of identity rules where required) will be […]

Section 49(2) LPA 1925 – return of a deposit

Often not considered by a contracting seller is the seemingly wide discretion vested in a court, under section 49(2) LPA 1925, to award a return of a buyer’s 10% deposit. Section 49(2) reads: “Where the court refuses to grant specific performance of a contract, or in any action for the return of the deposit, the court may, if it thinks fit, order the repayment of any deposit.”

In Midill (97PL) Ltd. v Park Lane Estates Ltd & Anor [2008] EWCA Civ 1227, (a case involving a contract for the sale of shares, but where the parties had conceded that section […]

Wider first registration triggers

The Land Registry’s quest for total registration has moved on – at a slightly slower pace than might have been envisaged (or threatened) when the Land Registration Act 2002 was first introduced. The Land Registration Act 2002 (Amendment) Order 2008 will extend first registration triggers next April to include (a) the appointment of a new trustee of unregistered land held in trust where the land vests in the new trustee by deed or by a vesting order under section 44 of the Trustee Act 1925; and (b) the partitioning of unregistered land held in trust amongst the beneficiaries of the […]

ID rules – Monday 10th November

From Monday, when applying to register transfers, leases, surrenders, charges and discharges on forms AP1, FR1 or DS2, to avoid an application rejection, you will have to do one of three things:

• provide the name, address and reference of the conveyancers acting for all key parties to the transaction (i.e. buyers, sellers, landlords, tenants, borrowers and lenders); or
• confirm that you are satisfied that sufficient steps have been taken to verify the identity of any unrepresented party; or
• enclose a Form ID1 or ID2 in relation to an unrepresented party (i.e. a form upon which that person’s identity has been independently verified).

What […]