Legal News

In this issue: Commercial tenancies Statutory compliance Property development Transferring property Additional property updates this week Daily and weekly news alerts Trackers New Q& As Commercial tenancies Compensation for misrepresentation in opposed lease renewal proceedings ( Mc Donald’s Restaurants v Shirayama Shokusan) In the earlier reported decision of Mc Donald’s Restaurants v Shirayama Shokusan [2024] EWHC 1133 ( Ch), the court awarded compensation under section 37A of the Landlord and Tenant Act 1954. This followed findings that, at a previous County Court trial concerning a disputed lease renewal, the landlord had knowingly misrepresented what business it said it intended to run from the demised premises once the tenancy ended. That misstatement induced the County Court Judge to refuse the grant of a new lease. See the News Analysis by Alexander Hill‑ Smith, barrister at New Square...

Mc Donald’s Restaurants Ltd v Shirayama Shokusan Company Ltd [2024] EWHC 1133 ( Ch) What are the practical implications of this case? As is widely understood, a landlord opposing a tenant’s bid for a fresh tenancy under the LTA 1954, Pt II generally relies on two key bases: an intention to carry out redevelopment of the property (ground 30(1)(f)); or an intention to occupy and run its own undertaking from the demised premises (ground 30(1)(g)). The requisite intention must be in place on the date of the hearing of the disputed renewal and must be firm and settled. There must also be a realistic prospect that the landlord can implement that intention in practice. For s 30(1)(g), the landlord must plan to conduct the business within a reasonable period after termination as at the hearing date. In reality, in defended renewals the...

In this issue: Key developments and horizon scanning Leasing property Transferring property Environment, energy and buildings Additional property updates this week Daily and weekly news alerts Trackers New Q& As Key developments and horizon scanning Response to consultation on High Street Rental Auctions The Department for Levelling Up, Housing and Communities has released a summary of replies, together with its own response, to the High Street Rental Auctions consultation, which ran for 14 weeks from 31 March 2023 to 7 July 2023. The exercise asked for views on elements to be included in the High Street Rental Auction policy, created by the Levelling Up and Regeneration Act 2023, including how the standardised lease should be configured (its make-up and operation of clauses), how the costs of the High Street Rental Auction process should be shared, how Minimum Energy...

In this issue: Environment, energy and buildings Easements, rights and covenants Property transfers Property lettings Property taxation Further property updates this week News alerts—daily and weekly Trackers New Q& As Environment, energy and buildings Japanese knotweed—no damages where causation test not satisfied In Davies v Bridgend County Borough Council [2024] UKSC 15, the Supreme Court unanimously allowed the appeal. Applying the ‘but for’ causation test, it determined that damages are not recoverable where the fall in the claimant’s land value was not brought about by the defendant’s tortious conduct. The ruling is particularly significant for claims where the spread of Japanese knotweed began before the duty to treat it arose in 2013. Tom Carter, Barrister at Ropewalk Chambers and legal representative for the respondent, comments on the implications of the judgment. See: LNB News...

R (on the application of Strack (on behalf of The Woodcock Hill Village Green Committee)) v Secretary of State for Environment, Food and Rural Affairs [2024] EWCA Civ 420 What are the practical implications of this case? This decision highlights that, in compiling applications and in inspectors assessing proposals to remove land from the register of town and village greens, a clear separation must be drawn between categories of interest: (a) those of individuals who hold rights over, or are in occupation of, the land proposed for deregistration; and (b) those of the neighbourhood. The decision-maker must consider both sets when resolving whether to deregister land as a town or village green, as required by Co A 2006, s 16(6). What was the background? ......

In this issue: Leasing property Transferring property Property development Environment, energy and buildings Property taxes Property in Scotland Lex Talk®Property: a Lexis®Nexis community Further property updates this week Daily and weekly news alerts Trackers New Q& As Leasing property Competing views on a tenant’s ‘holding’ in renewal claims for business tenancies arose in Sainsbury's Supermarkets Ltd v Medley Assets Ltd [2024] Lexis Citation 358, a contested application under the Landlord and Tenant Act 1954 ( LTA 1954). The landlord relied on ground (f), contending it reasonably needed possession to undertake substantial works. A significant subsidiary issue was the scope of the tenant’s holding, turning on the meaning of that expression in LTA 1954, s 30, and whether it matched or differed from ‘holding’ in LTA 1954, s 32 (property to be comprised in any new tenancy). This, in turn, framed the breadth of the court’s inquiry into what works were practically achievable. The court...

Simon and Joanne Holding v HMRC [2024] UKFTT 337 ( TC) The FTT heard an appeal against a closure notice assessing the appellants to SDLT on the footing that a purchase of a property (being a dwelling) together with land was entirely residential for SDLT purposes. The taxpayers contended, unsuccessfully, that a number of fields comprised within the property were not the grounds of the dwelling for the purposes of section 116(1)(b) of the Finance Act 2003 and instead were non‑residential land, with the consequence that the lower non‑residential rates of SDLT ought to have applied to the transaction. HMRC, however, successfully argued that the whole of the land, including the fields, amounted to the grounds of the relevant dwelling for SDLT, so the higher residential rates were engaged. In addressing whether land forms part of the ‘grounds’ of a dwelling, the FTT applied an...

Sainsbury's Supermarkets Ltd v Medley Assets Ltd H00MK414 What are the practical implications of this case? This ruling will interest those advising or acting in the field of business tenancies and applications for renewal. It stands as a classic illustration of the principles governing opposed renewal claims. The judge also delivered severe criticism of one expert and his responsibilities to the court. It is a pointed reminder that experts must be fully aware of their obligations under the CPR and within applicable professional codes, here the RICS framework being relevant. What was the background? The court considered, as a preliminary issue, whether the landlord had a defence to a claim for a renewed business tenancy under the LTA 1954, predicated on proposed works to a staircase (ground floor) and the basement. It was common ground that the tenant occupied only the ground floor, apart from a small...

In this issue: Transferring property Property management Residential property Property insolvency Property in Scotland Additional property updates this week Daily and weekly news alerts New and updated content Trackers New Q& As Transferring property No summary judgment where specific performance claim not fanciful Valbonne Estates Ltd v United Homes Ltd [2024] EWHC 876 ( Ch) related to the disposal of a leasehold interest. The agreement was subject, among other things, to the landlord’s written consent. Because that consent proved difficult to obtain, completion did not occur, and a dispute followed over whether the contract had been rescinded. It was accepted that, as at 4 November 2020, the landlord had not granted consent. At the core of the application were the consequences of the missing consent for the parties’ equitable rights in the property, and the...

In this issue Transferring property Leasing property Property development Property taxes Additional property updates this week Daily and weekly news alerts New and updated content Trackers New Q& As Transferring property Guidance on removal of overseas entities from register Companies House has released guidance on applying to remove an overseas entity from the Register of Overseas Entities where it is not, or is no longer, the registered owner of relevant UK property or land. This covers property acquired on or after 1 January 1999 in England and Wales, and 8 December 2014 in Scotland. The entity must have disposed of all UK property and the transfer must be shown on the land register at HM Land Registry before submitting a removal application to Companies House. See: LNB News 17/04/2024 44. Source: Apply to remove an overseas entity from the register. HM Land Registry updates Practice Guide 8 HM Land Registry has updated Practice Guide 8:...

R (on the application of Suffolk Energy Action Solutions SPV Ltd) v Secretary of State for Energy Security and Net Zero [2024] EWCA Civ 277 What are the practical implications of this case? This decision was highly consequential for the sector. Had the Court of Appeal upheld the claim on the basis that land acquisition agreements featuring non‑objection clauses were unlawful due to ‘stifling’, established industry practice would have been significantly disrupted. Government guidance treats compulsory purchase powers as a last resort, so those considering such powers are encouraged to negotiate with landowners and secure acquisition by agreement. In that setting, it is common to offer incentive payments to encourage early commitment, to avoid resorting to compulsory purchase, and to oblige the landowner not to object to the scheme and/or to retract any objection already made. Any such contract is entered into by the...

In this issue: Residential property Property management Property insolvency Property in Wales Property in Scotland Additional property updates this week Daily and weekly news alerts Trackers New Q& As Residential property Undue influence—test in ‘hybrid’ cases In the earlier reported One Savings Bank plc v Waller- Edwards [2024] EWCA Civ 302, the Court of Appeal examined whether a lender’s awareness that part of a joint advance would be used for a purpose benefiting only one borrower was enough to trigger the ‘ Etridge protocol’, obliging the bank to follow the steps set out by the House of Lords in Royal Bank of Scotland plc v Etridge ( No 2) [2002] 2 AC 773 to avoid being taken to have notice of any undue influence one co-borrower may have exerted over the other. The Court of Appeal decided that such knowledge, on its own, does not activate the protocol. Both the court and the lender must assess the...

What are the practical implications of this case? From a purchaser’s perspective, the decision emphasises qualifying tenants’ statutory right of first refusal under LTA 1987 when a landlord proposes to dispose of its reversionary interest in a block of flats in question. Where LTA 1987 applies, the landlord is prohibited from transferring any estate or interest in the property unless it first serves a s 5 notice offering the reversionary interest to the qualifying tenants on the same terms as offered. A landlord who omits this step may commit a criminal offence, and there are significant consequences for the buyer as well in practice. Under s 12B(2), more than 50% of the qualifying tenants of the constituent flats can serve a purchase notice on the buyer, requiring the buyer to pass to the tenants’ nominee the estate or interest that formed the...

Lowe v The Governors of Sutton’s Hospital In Charterhouse [2024] EWHC 646 ( Ch) What are the practical implications of this case? Tenancy deposit law is no exemplar of lucid drafting and has generated a raft of technical disputes. This decision provides helpful certainty: the relevant limitation period for these claims is six years under section 9 of the Limitation Act 1980 ( LA 1980) a certificate of information containing a plain error should be read as one reads a statutory notice; if a reasonable recipient would grasp that the correct details were conveyed, the statutory requirements are satisfied the absence of a signature on the certificate of prescribed information was not determinative. In this case, a signed covering letter from the landlord’s agent accompanied the certificate, so the information was delivered in a form ‘substantially to the same effect’ as that required by the Housing ( Tenancy...

In this issue: Residential property Insurance Transferring property Property in Scotland Lex Talk®Property: a Lexis®Nexis community Additional property updates this week Daily and weekly news alerts Trackers New Q& As Residential property Undue influence—test in ‘hybrid’ cases In One Savings Bank Plc v Waller- Edwards [2024] EWCA Civ 302, the Court of Appeal, Civil Division, rejected the defendant’s appeal to resist the bank’s possession claim. She maintained the lender should have been alerted to undue influence when she and her former partner obtained a loan partly for their mutual non-commercial aims and partly for the partner’s benefit alone. The defendant suggested the proper test was that a lender is put on inquiry unless the aspect conferring a sole benefit on one borrower is insignificant. The Court concluded that test was incorrect, and that Royal Bank of...

What is the background to the current changes? The CA 2022 secured Royal Assent on 24 February 2022. It followed the Government’s 2021 response to the Law Commission’s ‘ Technical Issues in Charity Law’ report, first issued in 2017. Aimed at removing technical legal hurdles and improving the efficient running of charities, the CA 2022 has been rolled out in stages. Phase one arrived in October 2022, phase two in June 2023, and a third instalment, containing most of the remaining provisions, took effect on 7 March 2024. Each phase has delivered discrete reforms towards the same objective. What is the impact of the implementation of the third tranche of measures in the Charities Act 2022? While this third wave may not revolutionise the sector, it can deliver meaningful advantages depending on a charity’s operations, so taking time to understand the changes and refreshed guidance is...

Unsdorfer v Octagon Overseas Ltd and others [2024] UKUT 59 ( LC) What are the practical implications of this case? This ruling clarifies who can be an accountable person and, in turn, who ultimately carries responsibility for the various building safety risk functions set out in BSA 2022, Pt 4. Even so, it also presents practical difficulties. For new management orders (made after 6 April 2023), or for management orders that do not assign any building safety risk duties to the manager, the manager’s remit will omit the Part 4 functions, leaving those tasks with the accountable person. As a result, management responsibilities will be split, necessitating a measure of co-operation between the manager and the accountable person. For existing management orders, where the order does confer building safety risk duties on the manager, that allocation will result in duplication or overlap with the...

In this issue: Key developments and horizon scanning Residential property Property management Property development Transferring property Property taxes Property in Scotland Additional property updates this week Daily and weekly news alerts Trackers New Q& As Key developments and horizon scanning Law Society responds to Leasehold and Freehold Reform Bill amendments The Law Society has signalled its backing for newly tabled changes to the Leasehold and Freehold Reform Bill (which had its second reading on 27 March 2024—see the Trackers section below). The revisions would curb the sale of new leasehold houses and ensure every new home in England and Wales is freehold from day one, save in exceptional cases. Nonetheless, Law Society President, Nick Emmerson, noted that, without current moves to advance commonhold tenure, the Society supports the Law Commission’s 2011...

Investment and Securities Trust Ltd v HMRC [2024] UKFTT 230 ( TC) The dwelling at the heart of the option was owned by a director of the appellant, who was also a majority shareholder in the appellant’s parent. HMRC issued an SDLT assessment and closure notices, with the effect that ATED became payable in relation to the option, on the footing that the option was neither acquired nor held by the appellant exclusively for development and resale within a property development trade; consequently, reliefs from the 15% SDLT rate and ATED were not available. In their submissions, HMRC contended that the option was not obtained or retained exclusively for the prescribed purpose and emphasised the key distinction between an “exclusively” test and a “main purpose” test. HMRC maintained that further purposes for taking the option included: to give the appellant additional time to raise finance to...

Harjono and another v HMRC [2024] UKFTT 228 ( TC) The taxpayers acquired a property comprising a residential barn conversion with three acres of land. Roughly half of the acreage was a fenced paddock. This paddock bordered the garden and had two gates: one opening from the garden and another giving access to the road. The taxpayers agreed with a friend that she could graze her horse on the paddock for a fixed six-month period in return for a £50 monthly payment. Both parties signed the agreement before completion of the purchase, but it remained undated until after completion, when the taxpayers’ solicitor added the date as the effective date. The taxpayers filed their SDLT return on a mixed-use basis. They maintained that the paddock did not constitute part of the dwelling’s grounds because it was being used for commercial purposes...