Legal Practice Notes

Practice Note Across England and Wales, Scotland and Northern Ireland, leases sit at the core of any UK property-related business. Interests in land of any meaningful duration are commonly structured as leases, allowing landlord and tenant to benefit from the legal rights and obligations that accompany that relationship. While the legal mechanics of granting a lease operate in the same way in all cases, there is no single tax outcome for a grant. The tax position of the landlord granting the lease, and the tenant to whom it is granted, depends on their particular circumstances and on the features of the lease itself. This Practice Note considers only the direct tax position (income tax, corporation tax and CGT) on the grant of a lease. In this note, CGT is used to mean both capital gains tax and corporation tax on chargeable gains. For the direct tax...

Protected areas and protected sites Under section 55(1) of the Town and Country Planning Act 1990 ( TCPA 1990), development is taken to include carrying out building, engineering, mining or other works in, on, over or beneath land, as well as any material change to the use of buildings or other land. Anyone who has acquired, or is considering acquiring, land for development, or who plans to undertake development activity, must first assess whether the land is a protected site or supports protected species. It is the developer’s duty to establish whether proposed works could impact a protected area or site. They should check, in advance, whether their proposals are likely to affect any such areas or sites at all. Protected areas and protected sites include: national parks—areas designated for their natural beauty and for the opportunities they provide for open-air...

The Building Safety Act 2022 ( BSA 2022) contains extensive provisions and paves the way for significant changes to the law on building safety. For an overview of the reforms introduced by BSA 2022 and its principal measures, see Practice Note: Building Safety Act 2022—key provisions and issues. Parts 3 and 4 of BSA 2022 establish the framework for a new regulatory system for ‘higher-risk buildings’ ( HRBs), meaning buildings that are at least 18 metres tall or have a minimum of seven storeys and contain at least two residential units. By amending the Building Act 1984 ( BA 1984), Part 3 allows the creation of a stringent building control regime applying to the design and construction of works to HRBs. Part 4 of BSA 2022 imposes extensive risk-management and reporting obligations on those responsible for occupied HRBs. Together, these measures are known as the HRB...

This Practice Note on deceit claims sets out the elements required to pursue the common law tort of deceit: a false representation, an intention to deceive, reliance, and resulting loss. Deceit arises where a party knowingly makes a misrepresentation to defraud another, and that conduct causes loss to the victim. For further guidance on pursuing deceit claims, see: Deceit claims—pleading and standard of proof Remedies in deceit claims Deceit claim—what is it? Deceit occurs where a misrepresentation is made with the intention of cheating a party, and that intention later results in loss to that party. The common law tort of deceit is separate from, though closely aligned with, a claim in misrepresentation; see Practice Note: Deceit claims—pleading and standard of proof. Illustration— Connolly v Bellway Homes—property transaction In Connolly v Bellway Homes, the seller of development land secured damages from the buyer after relying on the...

A commonhold scheme can be set up: during a new development (for example, a block of flats); or where there is an existing block of flats run on a leasehold basis, provided the freehold owner and the current long leaseholders (those with leases granted for more than 21 years) agree to convert to commonhold New development with no existing unit holders Typically, a developer establishes the commonhold framework before any of the units—that is, individual flats—are sold......

This Practice Note sets out the commercial rent arrears recovery ( CRAR) framework found in section 72 of the Tribunals, Courts and Enforcement Act 2007 ( TCEA 2007), which superseded the common law entitlement to levy distress. It outlines which leases permit CRAR to be used, what kinds of rent fall within scope, and the steps to follow, including appointing enforcement agents, notifying the tenant, entering the premises, and taking and selling goods. It also addresses the ability to claim rent from sub-tenants within the statutory confines of the process, as described. Right to recover rent Under CRAR, a landlord may remove a tenant’s goods located at the demised premises to recover arrears of rent. The former common law remedy of distress has been abolished and replaced with this more tightly controlled statutory process; among other requirements, only certificated enforcement agents may act and tenants must...

ARCHIVED: This archived Practice Note is no longer updated and is supplied solely for background and reference purposes only. What is the background to the changes? The coronavirus ( COVID-19) outbreak, together with the ensuing lockdowns and social distancing rules brought in by the UK government, has had a significant impact on companies and the wider economy. On 20 March 2020, ministers ordered the closure of businesses such as restaurants, pubs and leisure centres, and by 23 March 2020 a nationwide lockdown was in place, putting vast areas of the private sector into a deep freeze. Compulsory shutdowns have imperilled the finances of many once-viable firms, and for enterprises already under pressure they proved to be the final straw. To soften the economic fallout of coronavirus and keep the economy on basic life support, the government rolled out a suite of...

Business interruption insurance This form of cover is commonly packaged and sold within standard commercial property policies. Ordinarily, business interruption protection only responds when disruption to, or interference with, operations directly stems from physical damage to insured property at the insured location. Some wordings, however, add ‘non-damage’ extensions that insure loss of income in other scenarios— for example, where entry to, or use of, the business premises is temporarily blocked or materially impeded by circumstances not involving property damage. In March 2020, after the coronavirus ( COVID-19) lockdown, numerous firms sought to claim for such losses under their business interruption insurance, yet few received indemnity, largely because of uncertainty over how non-damage extensions should react to a nationwide outbreak of infectious disease. The Financial Conduct Authority ( FCA), in consultation with policyholders and insurers, commenced and pursued a test case under the...

Covenants for title Where a property is disposed of (by conveyance, transfer or charge), the disponor will in most cases give a title guarantee, which carries with it the usual covenants for title. Although a landlord can give a title guarantee on the grant of a lease, in practice this happens infrequently. For this Practice Note, we describe the parties as the seller and the buyer, and call the instrument that effects the disposition the transfer. Covenants for title operate as warranties; they are contained in sections 1–13 of the Law of Property ( Miscellaneous Provisions) Act 1994 ( LP( MP) A 1994) and they apply to transactions of both freehold and leasehold land. Despite often being treated as boilerplate, it remains essential that both buyer and seller understand the impact of title guarantees and the implied covenants, the ways they apply in various...

The key corporate documents for a corporate real estate ( CRE) joint venture to develop a property are: the joint venture agreement ( JVA), and the articles of association of the joint venture company ( JVC) Further documents that will be needed include: the property sale agreement, see for eg Precedents: Contract for sale—freehold vacant possession conditional on planning and Contract for sale—leasehold vacant possession conditional on landlord’s consent the development funding agreement, see Practice Note: Real estate finance—development facilities—key features development management agreement, see Precedent: Development management agreement Brexit impact For guidance on how Brexit could affect CRE corporate joint ventures, and what this might mean for the drafting, negotiation and enforceability of CRE JVAs, see Practice Notes: Brexit—impact on corporate joint ventures and Brexit—drafting boilerplate clauses [...

Introduction This Introductory Guide sits within the Lexis Nexis series of Introductory Guides to Property. Aimed at apprentices, paralegals and others, the series explains both the transactions a property lawyer typically undertakes and the legal framework in which they occur. This Guide concentrates on Property Taxes. The series also includes: Introductory Guide to Commercial Property Introductory Guide to Land Law Introductory Guide to Property Development Introductory Guide to Property Finance Introductory Guide to Residential Property Each Guide is accompanied by a Glossary of Property Terms, providing definitions and, where appropriate, explanations of many words and phrases used daily by property practitioners. Terms appearing in bold within this Guide are defined in the Glossary. Contents Overview Value Added Tax ( VAT) Stamp Duty Land Tax / Land Transaction Tax Further...

Types of land contamination liabilities There are several liability types linked to contaminated land, summarised as follows: Regulatory action: planning regime; contaminated land regime; environmental damage regulations; water pollution legislation; environmental permitting regime Third party liabilities: private nuisance claims for off-site migration; public nuisance claims; personal injury claims; claims relating to negligent advice; misrepresentation; insurance disputes Contractual liabilities: indemnities in sale contracts; indemnities in corporate and sale and purchase agreements; remediation agreements Other liabilities: landlord and tenant obligations; clean-up, investigation and monitoring costs; loss of property value; delay or aborted transactions; accounting provisions; negative publicity Planning regime In most cases, contamination is addressed voluntarily when land is developed or redeveloped via the planning system. The National Planning Policy Framework sets the planning policy for managing contamination risks. Question Who is liable? Answer The developer is responsible for making sure a development is safe and that the site is...

Due diligence in contaminated land transactions Lambson Fine Chemicals Ltd v Merlion Capital Housing Ltd underlines the need for robust technical and legal due diligence on brownfield schemes. Former chemical site in the spotlight The 40‑acre Castleford site had hosted chemical production since the 1860s. In the late 1940s, Laporte owned it and manufactured sulphuric acid. Lambson Fine Chemicals then operated there for three decades, and in 2004 sold to Merlion Capital Housing for £12.25m for planned commercial and housing development. Lambson took a one‑year leaseback to demolish the plant, while Merlion retained £500,000 to meet clean‑up costs arising from those works. Most of that sum was returned to Lambson, leaving £150,000 unpaid. Dispute over clean up costs After completion, Merlion identified 14,000 tonnes of soil at the site’s centre containing “ Blue Billy”, a waste by‑product with high cyanide...

In 2020, the Law Society published a revised practice note on contaminated land. That Law Society note superseded the 2016 iteration of the practice note. Earlier, the version issued on 18 December 2014 had taken the place of the Society’s former green card warning on contaminated land. What does the practice note cover? The note outlines the Law Society’s view of sound practice in relation to contaminated land for solicitors involved in property transactions and related matters. It advises that practitioners should always assess whether contamination arises in every conveyancing matter, and flags that contamination can be a significant concern in certain transactions. For legal purposes, land is only treated as ‘contaminated land’ under Part IIA of the Environmental Protection Act 1990 ( EPA 1990) where it presents an unacceptable level of risk and has been formally determined as such by the local...

ARCHIVED: This Practice Note has been archived and is no longer maintained. FORTHCOMING CHANGE: Sections 224 to 251 of the Digital Markets, Competition and Consumers Act 2024 will, once commenced, revoke the Consumer Protection from Unfair Trading Regulations 2008 and substitute them with broadly comparable primary legislation to enhance consumer law enforcement. The new framework will begin on a date set by regulations made by the Secretary of State. This Practice Note examines consumer protection law and its connection to property, especially conveyancing transactions. It chiefly considers unfair contract terms and unfair commercial practices as treated by the Consumer Rights Act 2015 and the Consumer Protection from Unfair Trading Regulations 2008. Consumer protection legislation The main legislation The principal legislation relating to consumer rights protection in property law is: Consumer Rights Act 2015 ( CRA 2015) Consumer Protection from Unfair Trading...

When funding any development or construction scheme, the lender (or funder) and its advisers will adopt a range of measures to safeguard the lender’s position. These protections are designed to ensure that, at the very least, the lender can recover the monies advanced if the borrower (or developer) becomes insolvent or the project encounters difficulties. A principal document in any development financing is the contract between the lender and the borrower (the ‘facility agreement’), which sets out detailed provisions specific to the development. For guidance on the key construction matters that should be addressed in facility agreements, see Practice Note: Facility agreements—construction provisions. Another significant element of a development financing is the lender’s lawyers reviewing the construction documentation prepared by the borrower and its lawyers to confirm that it is correctly drafted and affords suitable rights to the borrower and any relevant third...

What is a facility agreement? Many construction projects, especially larger developments, often need external finance from banks or other lenders to support them during the build phase. The borrower will usually enter a facility agreement with the lender (or a group of lenders), which sets out the terms and conditions of the deal. It records the financing arrangements reached between the parties. It covers obligations, core pricing and timing requirements mutually agreed between them. Typical structure The precise make-up of a facility agreement varies according to factors such as the form of facility provided and the proposed application of the funds. Nonetheless, its core purpose is to see the lender’s capital repaid on time and to secure the return the lender expects on the loan at the agreed point. Consequently, most facility agreements contain broadly comparable provisions, commonly set out in a similar...

Managing contaminated land liabilities is an important consideration in construction projects Liabilities for land contamination commonly emerge within the planning framework and the contaminated land regime contained in Part IIA of the Environmental Protection Act 1990 ( EPA 1990). Remediation via the planning route: across England and Wales, most contamination matters are addressed through the planning system. To make sure a site is fit for its proposed use, and to avoid unacceptable pollution risk, the effects of contamination on a scheme should be examined through planning so far as they are not dealt with by other regimes, including the EPA 1990, Pt IIA, the Building Regulations and environmental permits (see: Environmental permits and exemptions—overview). Before permission is issued, the developer together with an environmental consultant ought to evaluate the potential contamination risks. Applicants are advised to liaise early with the local planning...

This Practice Note explores the mechanics of construction due diligence and the ways a construction lawyer becomes involved when a client is acquiring a property, or purchasing a company holding property assets, as part of a transaction. It also highlights the principal points to address when drafting construction provisions in a sale and purchase agreement, which will vary according to the stage reached by the relevant construction works. What is construction due diligence? Where a client intends to buy a property (or properties) or to buy a company whose assets comprise properties, due diligence must be undertaken to confirm the properties are satisfactory and that good title can be secured, in each case as part of a careful and proper pre-acquisition review. If the property includes a building completed less than 12 years ago, or if significant construction activities have been undertaken at the...

What are conservation covenants? In essence, conservation covenants are voluntary, private undertakings between a landholder and a responsible organisation or body, for example a conservation charity or a public authority. Their purpose is to safeguard the natural environment and heritage assets for the benefit of the public at large. They stipulate duties tied to the land itself and bind present and future owners, offering the prospect of enduring conservation outcomes and benefits. A common illustration is a farmer committing to manage a woodland and permit public access, with oversight by a local woodland charity or similar body. They are viewed as complementing statutory or policy-led designations—such as Sites of Special Scientific Interest or National Parks—by enabling the private protection of land with conservation merit that sits outside the public designation regime. Part 7 of the Environment Act 2021 ( EA 2021) addresses...