Legal Practice Notes

Practical issues for commercial landlords and tenants— EPCs This Practice Note explores key practical issues for commercial landlords and tenants when dealing with energy performance certificates ( EPCs). It sits within a series of Practice Notes on EPCs and minimum energy efficiency requirements ( MEES). An EPC assigns a property an energy efficiency rating from A (most efficient) to G (least efficient), using a complex assessment that considers factors such as the building’s age and type, its construction, insulation and heating systems. For more about what an EPC is and when one is needed, see Practice Note: Energy performance certificates ( EPCs)—what are they and when are they required? The principal regulations governing EPCs are the Energy Performance of Buildings ( England and Wales) Regulations 2012, SI 2012/3118 ( EPC Regs 2012) and the Building Regulations 2010, SI 2010/2214 ( Building Regs 2010), which...

STOP PRESS: From 24 February 2025, the core elements of the Procurement Act 2023 ( PA 2023) now apply. Any procurement launched on or after this date must proceed under PA 2023, while procurements initiated under earlier regimes (the Public Contracts Regulations 2015 ( PCR 2015), the Utilities Contracts Regulations 2016, the Concession Regulations 2016, and the Defence and Security Public Contracts Regulations 2011) must continue to be run and overseen in line with those rules. See Practice Note: Introduction to the Procurement Act 2023— PA 2023. PCR 2015 as assimilated law PCR 2015 are EU-derived domestic rules and therefore constitute assimilated law under sections 2 and 6 of the European Union ( Withdrawal) Act 2018. For practical guidance on the standing and construction of assimilated law, see Practice Note: Assimilated law. Public procurement in the UK Public procurement concerns public bodies buying goods, works or...

This Practice Note explores agreements made under sections 38 and 278 of the Highways Act 1980, assessing the duties they create and, in particular, the contractor’s stance in respect of them. Providing new roads and footpaths (together called ‘highways’ in this Practice Note) is a routine element of many schemes. Equally, numerous schemes call for alterations or upgrades to existing roads and footpaths. In some instances, a planning permission may even stipulate that fresh highways are constructed or that modifications to current highways infrastructure are delivered. See Practice Note: Planning conditions—key points. Ordinarily, the developer envisages that, once those works are finished, the new and/or modified highways will be taken over and maintained by the local highway authority ( LHA). Consequently, agreements under the Highways Act 1980—particularly, here, Highways Act 1980, ss 38 and 278—are frequently concluded between the LHA and the...

This Practice Note This Practice Note reviews the standard form novation agreements issued by the City of London Law Society ( CLLS) and the Construction Industry Council ( CIC). Novation is now widespread on construction schemes. It arises in various contexts and has, in particular, become routine on design and build procurements. For more on novation generally, see Practice Note: Novation in construction projects. Parties often adopt their own bespoke novation agreements, so numerous versions circulate. In 2004, two standard forms appeared—one from the CLLS construction committee and one from the CIC. The CIC later released an ‘ab initio’ form in November 2018, and a second edition of the ‘switch’ form in July 2021. Each agreement is a brief, straightforward document that avoids unnecessary provisions, though they adopt different approaches to novating the consultant. They do, however, each tackle the key issues arising from Blyth &...

The need for environmental insurance Bringing brownfield or previously developed plots back into use can boost a client’s property value. Yet the client could encounter the following liabilities: undetected contamination present on the site unrecognised continuing effects on third parties outside the site boundary worsening of existing pollution on-site (for example through contractors’ piling works), and the creation of new contamination at the location While some clients might choose to bear these risks, others—and stakeholders such as funders, prospective tenants and neighbours—may insist on the purchase of insurance. For further detail on environmental insurance in general, please refer to Practice Notes: Environmental insurance—when is......

A collateral warranty is an agreement that is ancillary to, or runs alongside, the underlying or primary contract (ie the construction contract or a consultant’s appointment). Most collateral warranties pick up the duties and obligations set out in the underlying contract, and the warrantor promises to a third party that it has carried out those duties and obligations in accordance with that contract. For further general information on collateral warranties, see Practice Note: What are collateral warranties? The JCT suite of collateral warranties The JCT has issued a number of standard form collateral warranties, with the following being the most commonly used: JCT Contractor Collateral Warranty for a Funder ( CWa/ F) JCT Contractor Collateral Warranty for a Purchaser or Tenant ( CWa/ P& T) JCT Sub- Contractor Collateral Warranty for the Employer ( SCWa/ E) JCT Sub- Contractor Collateral Warranty for a Funder ( SCWa/ F) JCT Sub-...

Key legislation, licences and guidance Source Details Legislation The Feed-in Tariff ( Fi T) scheme is principally founded on the Feed-in Tariffs Order 2012 ( Fi T 2012), SI 2012/2782, which has been updated by: Feed-in Tariffs and Contracts for Difference ( Amendment) ( EU Exit) Regulations 2018, SI 2018/1092 Feed-in Tariffs ( Closure, etc) Order 2018, SI 2018/1380 Feed-in Tariffs ( Amendment) ( Coronavirus) Order 2020, SI 2020/375 Feed-in Tariffs ( Amendment) ( Coronavirus) ( No 2) Order 2020, SI 2020/957 Feed-in Tariffs ( Amendment) Order 2023, SI 2023/127 Fi T 2012 was made under the Energy Act 2008 ( En A 2008). Licence provisions Beyond the legislation, the operation of the Fi T scheme is set out in the Standard Conditions of Electricity Supply Licences ( SLCs), Conditions 33 and 34. Guidance Ofgem publishes the core guidance for the Fi T scheme, notably: Feed-in...

This Practice Note considers the status of the programme in a construction contract, what difference it makes if the programme is a contract document and the approach of standard form contracts to the programme. The programme sits at the heart of every construction scheme. It enables the contractor to arrange the job and map out how the works will be executed. It likewise allows the employer and contract administrator to track progress, gauge the contractor’s output and evaluate delay. So, what duties do the parties have concerning the programme? Broadly, save where the construction contract provides to the contrary, the contractor may schedule the works and execute them in whatever sequence it considers appropriate, with the employer having limited sway over the order and tasks. In GLC v Cleveland Bridge and Engineering (1984) 34 BLR 50 (not available in Lexis Nexis®), the court...

Stop Press : On 24 February 2025, the core provisions of the Public Procurement Act 2023 ( PA 2023) take effect. We are currently reviewing, auditing and refreshing our materials accordingly. Please note that any procurement launched on or after 24 February must proceed under PA 2023, whereas procurements initiated under the earlier regime—the Public Contracts Regulations 2015 ( PCR 2015), the Utilities Contracts Regulations 2016, the Concession Regulations 2016, and the Defence and Security Public Contracts Regulations 2011—must continue to be conducted and overseen in accordance with that legislation. For background reading, see Practice Note: Public procurement law—reform [ Archived]. Securing value is a central concern in public procurement, since public services are ultimately financed by the taxpayer. The law therefore imposes specific obligations on public authorities that outsource services, so that they achieve the best possible value. The...

The Green Deal The Green Deal was a government initiative allowing households and firms to carry out energy efficiency upgrades to homes and business premises, financed via a ‘pay-as-you-save’ model. Approved providers secured low-cost funding for these works under the scheme, requiring no upfront outlay whatsoever. Rather than pay immediately at the outset, the expense of the efficiency measures was added to the property’s energy account and repaid over time in instalments by the bill payer, consistent with the Green Deal Golden Rule: that projected monetary savings from the measures would match or exceed the charges applied to the bill for that property. Responsibility for repayment stays with the property, so it passes to any new owner or occupier when the building is sold or let. The Energy Company Obligation ( ECO)—which superseded the Carbon Emissions Reduction Target and the Community Energy Saving...

This Practice Note provides guidance on exclusions and limits of liability relevant to engineer, procure and construct ( EPC) contracts. It ought to be read with Practice Note: Limiting liability in construction contracts, which provides more detailed guidance on limits of liability generally. When examining any limitation or exclusion of liability clause within an EPC agreement, a central issue is the governing law that applies to that contract. That choice often affects both how the clause is construed in practice and whether it can be enforced. Considering the differing consequences arising under other jurisdictions lies beyond this note, and, unless expressly stated otherwise, all references herein are to the position under English law, together with the implications that flow from that position accordingly. When drafting any limitation or exclusion of liability clause, it is vital to use wording that is entirely clear and...

Taking occupation before practical completion In most building contracts, the contractor has sole possession of the site and the works, and that position continues until practical completion of the works occurs (see Practice Note: What is practical completion?). At practical completion, exclusive possession of the site/works transfers back from the contractor to the employer. This is usually the case in practice unless the contract states otherwise through express terms (for example, terms dealing with sectional completion). However, the realities of construction and the commercial pressures on employers mean that, from time to time, an employer may decide it wishes to, for example, access, use, occupy or even sell a part or parts of the site/works before the whole of the works is finished or completed in full. A common rationale for doing so is to permit it (or a...

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Hard FM Facilities management ( FM) appointments are, in essence, commercial service contracting agreements. Hard FM refers to works tied to the upkeep and physical fabric of premises, for example landscaping, routine repairs, and mechanical and electrical systems maintenance. By contrast, Soft FM concerns in-building support functions such as cleaning, security, and helpdesk provision within a building. See subtopic: Facilities management for construction lawyers. Head contract This expression describes the overall agreement for the whole of the works and their delivery between the employer and the contractor, including circumstances where parts are let to sub-contractors by the contractor. It is commonly recognised as the head, or main, contract, clearly setting it apart from any...

W options These set out the provisions in NEC3 and NEC4 contracts that deal with dispute resolution. Under NEC3, one of two alternatives— W1 or W2—must be chosen. For NEC4, a choice must be made from three possibilities: W1, W2 or W3. For further details, see Practice Note: NEC contracts—dispute resolution. See also the X options, Y options and Z clauses......

Lenders and other financiers commonly obtain an assignment of the benefit of the suite of construction documents in respect of a development as an extra element of the security package supporting their loan to fund the project. See Practice Notes: Assignment in construction contracts and Legal and equitable assignment in construction contracts for further guidance and practical context. This Practice Note also examines the various approaches used for such an assignment and highlights some of the risks involved. For convenience in this note, all funders are called ‘banks’. Why does a bank wish to take an assignment? It should be noted that assigning the construction documents is only one of a number of security measures that a bank will hold. It will also probably register a charge against the employer itself and will also benefit from a suite of collateral warranties from the...

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z ABI Model Form of Guarantee Bond A performance guarantee bond template issued by the Association of British Insurers ( ABI) and commonly applied to construction projects, though it is frequently amended. See Practice Note: Amendments to ABI Model Form of Guarantee Bond. Acceleration In construction law, acceleration is generally taken to mean adopting measures to increase the pace of the works so as to complete them earlier than would otherwise be the case. See Practice Note: Acceleration of construction works, Precedent: Acceleration Agreement and Clause: Acceleration clause. ACE See the Association for Consultancy and Engineering ( ACE) below. Activity schedule A schedule of activities the contractor anticipates carrying out in completing the works......

Concurrent delay This Practice Note examines the definition and significance of concurrent delay on construction projects, the contract provisions that address concurrent delay, and the contractor’s entitlement to an extension of time and/or loss and expense where concurrent delay arises. Concurrent delay describes a scenario on a construction project experiencing delay in which two or more independent events occur that, if each were considered in isolation, would have caused critical delay to the project. Commonly, one of the delaying events sits at the employer’s risk (often termed a ‘relevant event’), while the other is either the contractor’s risk or is neutral (that is, at neither the contractor’s nor the employer’s risk, such as adverse weather). These delays may happen exactly at the same time (although that is uncommon) or may overlap to some extent. Applying the usual ‘but for’ test of...

Where an agreement for lease contemplates building works, it is standard for the landlord to secure collateral warranties (or grant third party rights) for the tenant’s benefit. This Practice Note explains the drivers behind tenant requests for such warranties, identifies the usual warrantors, and sets out points for construction lawyers when settling warranty terms and the linked provisions within the agreement for lease... Why does the tenant require warranties? Post-completion defects are a familiar aspect of construction schemes. A significant number emerge within the defects liability period, during which the contractor is typically required under the building contract to make good any faults (see Practice Note: Defects liability period and rectification of defects). Yet other, often more material, issues can surface later—at a time when the contractor no longer has a contractual duty under the building contract to revisit the site to remedy them—and after the...

Agreement for lease—construction obligations, defects liability and collateral warranties Under an agreement for lease that includes construction duties, the landlord is bound to deliver a specified building (or part) to an agreed standard by a set date. However, it will typically accept responsibility for defects in the works only for a limited period following completion—usually up to the end of the defects liability period (see, for instance, the Defects Liability clauses in Precedent: Agreement for lease—developer landlord to carry out major works incorporating the Standard Commercial Property Conditions ( Third Edition)). As a result, the tenant will wish to keep track of the construction phase and obtain extra contractual protection, such as collateral warranties or third party rights, to safeguard its position if defects emerge after the landlord’s liability to the tenant has expired. For further detail on collateral warranties and third party rights in this...

This Practice Note This Practice Note clarifies the meaning of applicable law—sometimes, depending on context, called governing law, proper law or the choice of law—namely the law applied to resolve a dispute between parties. It does not encompass procedural law. It identifies which applicable law regime operates in the courts of England and Wales ( English courts). The regime engaged will differ according to whether the dispute is contractual or non-contractual and, for contractual matters, whether the parties selected the applicable law via a choice of law (governing law) clause, including any subsequent variation of that agreement. In a world where international travel, trade and communication are routine, cross-border complications arise with ease. Parties conclude contracts daily across different countries and continents. Goods and services move across frontiers, and individuals suffer accidents outside the states where they ordinarily live and work. When a claim has a...