News

VAT implications where a house-builder temporarily lets

One by-product of the credit crunch is the increase in house-builders seeking temporarily to let empty units that cannot currently be sold. Such letting activity changes the nature of the house-builder’s VAT activity from a taxable zero-rated supply of new houses for sale, to exempt short-term lettings. This can have a knock-on effect on the ability to recover input tax incurred by the builder. HMRC has published an information sheet: VAT: Partial Exemption – adjustments when house builders let their dwellings.

This sheet explains that, for many house builders, the amount of “exempt input tax” related to their temporary lets is […]

EPCs – transitional rules for Oct 1st commencement date

At last, some transitional rules are being made to deal with the final EPC commencement date on October 1st. DCLG announces that similar arrangements to those put in place in April and July will apply to commercial buildings already on the market. These rules will mean that a commercial building that was on the market before 1st October and which remains on the market will not necessarily immediately need an EPC, but will need an EPC by 1st January at the latest. If it is sold or rented out in the meantime, an EPC must be commissioned and then handed […]

Land Registry restrictions – Property PSL precedents

Any Property PSL documents containing the text of Land Registry standard form restrictions (e.g. overage clauses, easements, deeds of covenant) have been updated to give the user a choice between the current standard form of wording (to be used where it is known that an application to register the restriction will be made before 10th November 2008) and the new, slightly altered, form of wording which, if the user wants to ensure that the restriction remains in “standard form”, must be used where the application to register the restriction will be made on or after 10th November 2008.

Withdrawing a break notice

If a landlord consents to the withdrawal of a tenant’s break notice, does the original lease remain alive, or is there an effective termination and re-grant? If a tenant is concerned about the SDLT implications of a re-grant, the Revenue states as follows: “In circumstances where a break notice or notice to quit is withdrawn, by agreement between the parties, before it takes effect the lease will be treated as continuing for SDLT purposes, notwithstanding any rule of law to the effect that a break notice or notice to quit may not be withdrawn and that any purported withdrawal creates […]

New standard form Land Registry restrictions

From 10th November 2008, the wording of the majority of the standard form restrictions changes. Only standard forms A, E, I, U, V, W and Y are unaltered. Four new standard form restrictions are introduced (Forms MM, NN, OO and PP). The text of all of the standard forms of restrictions (in Microsoft Word form), and further relevant information, has been posted into the precedent bank at New Standard Form Restrictions. If you know that your Land Registry application will be lodged on or after 10th November, you should start providing for the new forms of restriction now.

Credit crunch – new SDLT exemption

Presumably, no-one has missed today’s announcement of a new one-year SDLT exemption for (purely) residential property acquisitions with a chargeable consideration not exceeding £175,000. Details of it can be found on the Revenue’s website at: Temporary exemption for residential property.

New content on the website

New content on the website includes:

• A precedent Report on Title for use on acquisitions. The practicalities of reporting on title (and contract) to a client will be the subject of a series of CLT property seminars commencing September 2nd – see Effective Reporting on Title by Alan Riley
• A precedent oversail licence (with an accompanying scaffolding licence soon to follow)
• A deed for the release of a covenant and the release of an easement
• Key drafting points when dealing with overage clauses

Just click on the links.

Mortgage fraud

The Times adds a sobering postscript to an item in today’s edition headed Lenders face huge hit on mortgages fraudulently obtained by crime gangs. It concludes: “Lawyers [say] that mortgage fraud could be difficult to prosecute, because many fraudulent borrowers abscond before the fraud is discovered. Lenders and insurers are therefore likely to pursue legal action against solicitors and brokers who were either complicit or failed to conduct sufficient checks.”

The Law Society’s Practice Note on Morgage Fraud (issued in March 2008) should be considered as an essential read for all property lawyers. It gives sensible advice on how to stay […]

September 2008 property update

The September 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 from CPI Update – September 2008.

The September 2008 issue of the CPI Update contains:

Case law commentary on:

• Yeoman’s Row Management Ltd v Cobbe – Development land, proprietary estoppel and constructive trusts
• R (on the application of Lewis) v Redcar & Cleveland BC – Village greens and the effect of prohibition signs, and deference to other uses
• Landlord Protect Ltd v St Anselm Development Co. Ltd – Landlord and tenant – guarantees and […]

Empty property rates relief – bad timing

The current state of the economy has had a range of dire consequences for the property market. Some legislative changes (e.g. EPCs, HIPs) have sadly arrived at precisely the wrong time. Reduction in empty property rates relief is another example of a legislative change that is ill-timed for the commercial market. The Rating (Empty Properties) Act 2007 amended Part 3 of the Local Government Finance Act 1988 so as to increase the empty business property rate from 50% to 100% of the basic occupied business rate. (The aim being to provide an incentive to owners to re-let, re-develop […]

Land Registration Rules – 2008 changes

Following publication of the Land Registration (Amendment) Rules 2008, a consolidated version of the Land Registration Rules 2003 now appears on the Land Registry website – see http://www1.landregistry.gov.uk/assets/library/custom_items/documents/Land_Registration-Rules-2003_v6.pdf

Of more immediate relevance is a detailed HMLR action booklet explaining the changes:
http://www1.landregistry.gov.uk/assets/library/documents/take_action.pdf

The changes (effective from 10th November 2008) include a whole new set of forms (with a transitional period, so that use of either the new form or the old form will be acceptable until 9th February 2009), new identification requirements, changes to the wording of the majority of standard form restrictions, and a few other miscellaneous changes. Beware – although […]

EPCs – Oct 1st commencement date approaches

EPCs is a recurring theme in these news items. August is normally a quiet month, but the Government is pumping out information in the run up to the next big EPC/DEC commencement date on October 1st. See, for example, Energy Performance Certificates (EPCs) and renting homes: A tenant’s guide (because, of course, as the Guide says, from 1st October, “the landlord (or someone acting on their behalf, such as an estate agent) must give you an EPC free of charge for the home you are interested in renting as early as possible.”

See also Getting ready for DECs – since, on […]

EPCs – CPSE amendments

CPSE general enquiries have been updated to version 2.8 to include enquiries relating to EPCs, asking (at enquiry 14) whether a valid EPC has been supplied and, if not, where one can be inspected, or why one is not required. Enquiries are also raised as regards the statutory requirement for inspection of air-conditioning systems. See CPSE.1 – (version 2.8) – general enquiries to be raised in connection with every commercial property transaction.

Shall, will, may, must…

Property PSL documents try to avoid use of the heavily overused word “shall”. If you spot one, let me know. The word is rarely used in every day speech, so why should it be used in a legal document? Good drafting practice involves writing in the present tense (e.g. not “if the Tenant shall fail to observe its covenants” but “if the Tenant fails…”) and using the word “must” to create an obligation (e.g. not “the Tenant shall decorate the Property…” but “the Tenant must decorate the Property…”).

Used inappropriately, the word can create ambiguity, leaving doubt as to whether […]

Community Infrastructure Levy – CIL

Need to read more about Community Infrastructure Levy (the Government’s substitute for Planning Gain Supplement)? The Government has published further details of its proposals for CIL – see http://www.communities.gov.uk/publications/planningandbuilding/communityinfrastructurelevy
Provisions of the Planning Bill enable regulations to be laid to facilitate the introduction of CIL. This report envisages regulations coming into force in the spring of 2009.

EPCs for Commercial Buildings – updated guidance

The DCLG Guidance on Energy Performance Certificates for non-dwellings (first published in January 2008) has been updated by the DCLG and can be seen at http://www.communities.gov.uk/documents/planningandbuilding/pdf/nondwellingsguidance.pdf

Land Registration Rules – major 2008 changes

Still time for some light summer reading? The Government has published major amendments to the Land Registration Rules 2003 in the form of the Land Registration (Amendment) Rules 2008 (see http://www.opsi.gov.uk/si/si2008/uksi_20081919_en_1). These changes will take effect from 10th November 2008. At present, charting the changes is difficult, as the new regulations simply amend the 2003 rules. However, a consolidated version of the rules showing all changes made by the 2008 amendment rules (including those to the prescribed forms) will be available on the Land Registry website from 18th August. Needless to say, the CPI Update will extensively examine the rule […]

Finance Act 2008

The Finance Act 2008 received Royal assent on 21st July 2008.