Legal Practice Notes

Practice Note This Practice Note outlines the distinct regimes applying to overseas companies in relation to registering security at Companies House. The relevant regime depends on when the security came into being. In brief, from 1 October 2011 onwards, overseas companies have not been obliged to register security over UK assets at Companies House; however, they must keep an internal register of charges and mortgages as part of their books and records. Overseas companies are, nonetheless, required to be recorded in the Register of Overseas Entities and to supply particulars of their beneficial owners and managing officers where they acquired land in the UK on or after 1 January 1999. Acquisitions and specified dispositions, including granting security, will not be entered at the Land Registry if the Overseas entity is not listed in the Register of Overseas Entities. For further...

Why have an oversail licence on a construction project? Under English law, a freeholder will in most cases own the column of air above their plot unless the instrument that vested title in them specifically carves it out. A lease does not automatically confer rights to the airspace above the premises; whether it does turns on the wording of the particular lease. That said, it is not invariably obvious if the demised premises include or exclude the airspace (see Can an oversail licence protect a tenant? below). Whether the airspace forms part of the demise is therefore a matter of construction. When a contractor proposes to install a tower crane to execute the works, it should, at the outset of the scheme, assess whether the jib (the horizontal arm) will have to pass over—i.e. oversail—any neighbouring land that is not within the...

Forfeiture clauses in rack-rented occupational leases are widely accepted, because such leases seldom possess capital value. By contrast, long leases (usually carrying only a minimal ground rent) are regarded as akin to freeholds and are likely to hold substantial capital value, with a significant premium often having been paid on their grant. Lenders taking mortgage security over long leases therefore seek to ensure either: the lease excludes any right for the landlord to forfeit; or adequate protections for the lender are incorporated into any forfeiture clause Mortgagee’s rights on forfeiture If the breach prompting the landlord’s right to forfeit is non-payment of rent, a mortgagee may apply for relief from forfeiture (as though it were an undertenant) or for a vesting order (see Law of Property Act 1925 ( LPA 1925), s 146(4)). Where forfeiture arises from breach of any other...

This Practice Note summarises the provisions of the Leasehold and Freehold Reform Act 2024 ( LFRA 2024), much of which is not yet in force. bans the grant or assignment of certain long residential house leases makes major changes to multiple aspects of leasehold enfranchisement and lease extension procedures and provisions (including the price payable) gives long leaseholders a right to replace their ground rent with a peppercorn rent on payment of a premium brings in a set of reforms to the residential service charge regime, regulation of estate management, and leasehold and estate management redress schemes clarifies uses of estate rentcharges and regulates remedies for rentcharge arrears amends various provisions of the Building Safety Act 2022 ( BSA 2022), including defining ‘relevant steps’ a landlord must take to remedy ‘relevant...

Where the parties agree a lease variation so fundamental that it is entirely at odds with the original lease, the law may treat there as being an implied surrender and re-grant taking effect by operation of law. In that scenario, the existing lease is taken to have been surrendered and a fresh lease is taken to have been granted between the parties on the varied terms agreed. An unintentional surrender and re-grant arising in this way can produce serious adverse consequences for both the landlord and the tenant—see ‘ Consequences of inadvertent surrender and re-grant’ below. This Practice Note covers: amendments to lease terms that do, or do not, prompt surrender and re-grant by operation of law, including: enlarging the demise or lengthening the term reducing the demise or the term ...

Under the Health and Safety at Work etc Act 1974 ( HSWA 1974) Employers owe a duty to their staff to secure, so far as is reasonably practicable, their health, safety and welfare while at work. Additionally, any person exercising control over premises owes duties to individuals outside their employment who could be affected by their actions, ensuring, so far as reasonably practicable, that such persons are not subjected to risks arising from the premises, or from the plant and substances situated there. These obligations may originate not only from the physical condition of the premises, but also from shortcomings in the arrangements the duty-holder makes with a third party, such as a contractor. An individual protected by HSWA 1974 does not forfeit that protection by being in a part of the premises where they lack permission to be, or by being engaged in a...

This Practice Note explores the definition of an inherent defect, identifies whether the duty to remedy rests with the landlord or the tenant, considers any obligations implied by law to address inherent defects, and explains the position where a defect causes damage. It does not address repair liabilities under the Building Safety Act 2022 ( BSA 2022). For guidance on liability under BSA 2022, see Practice Notes: Building Safety Act 2022—key provisions and issues and Building Safety Act 2022—landlord and tenant issues... Inherent defects in leasehold property Design flaws, defective installation, or the choice of unsuitable or inadequate materials during construction can create serious issues over time... In a leading authority, failed joints in the basement of an office building allowed water ingress, leaving the basement unfit for use... In another case, inadequately designed double-glazing units caused condensation and black...

Call options Developers commonly employ call options to secure the ability to purchase land if and when planning permission is granted. Opting for this route gives the developer breathing space to prepare and pursue a planning application before being bound to pay for the site. At the outset, the developer’s spending is usually confined to an option fee—namely, the amount settled with the landowner as the price for refraining from disposing of the land to others while planning consent is sought. The developer is, however, likely to shoulder considerable costs in drafting and advancing the planning application. High among the developer’s priorities is the inclusion of terms that permit the option period to be prolonged if the planning process remains in train. Unless the option agreement or the contract expressly authorises extensions of time, the deadline must be observed to the letter (for further...

The Land Charges Act 1972 ( LCA 1972) The LCA 1972 sets out a scheme under which particular charges and incumbrances concerning unregistered land are to be entered as land charges on the land charges register, maintained by the Land Charges Department of HM Land Registry, which is based at its office in Plymouth. That register is completely separate from the register used for substantive title registration. Land charges operate to safeguard the interests, in unregistered land, of third parties who do not possess the title deeds to the land and therefore cannot control when and how the land is dealt with or disposed of. If a charge, or an obligation that affects unregistered land, is not protected by the registration of a land charge, there is a risk that valuable property rights will be lost. In addition, the LCA 1972 requires HM Land...

This Practice Note explains which jurisdictional rules the English courts will use when deciding which court has authority to hear a dispute. Those rules derive from the Hague Convention on Choice of Court Agreements, Brussels I (recast), Brussels I, the Lugano Convention, the Brussels Convention, and from statute or the common law. In international litigation, parties may disagree about the proper forum—ie, the jurisdiction—in which their dispute should be tried. Accordingly, identifying the appropriate venue for issuing and hearing proceedings can itself become contested. It is therefore essential to appreciate that particular rules govern the allocation of jurisdiction to a court. These frameworks direct the court’s analysis when deciding jurisdiction. The UK’s exit from the EU also influences which jurisdictional rules will be applied by the courts of England and Wales when determining which courts have jurisdiction. For discussion of wider...

What happens when a debtor dies? Someone may pass away while insolvent. An estate is insolvent when its value does not suffice to discharge all debts and liabilities in full. In such cases, the estate’s administration is regulated by the Administration of Insolvent Estates of Deceased Persons Order 1986 ( DPO 1986), SI 1986/1999. It applies to estates of the insolvent deceased, including where death follows the presentation of a bankruptcy petition or the making of a bankruptcy application. Its main effect is to adapt the Insolvency Act 1986 ( IA 1986). The interaction between DPO 1986, SI 1986/1999 and IA 1986 is examined in Re Estate of Platon Elenin (aka Boris Abramovich Berezovsky). What should happen to the insolvent estate? Unless a bankruptcy order exists (or a bankruptcy petition has been presented or an application made), an insolvent estate must be managed in one of three...

This Practice Note explores applicable law clauses—also called governing law clauses, proper law clauses or choice of law clauses. It explains why parties agree an applicable law clause and the key matters to weigh up. It also provides insight into circumstances in which parties may alter the applicable law clause in their contract, and considers whether floating applicable law clauses and stabilisation clauses are effective. For an introduction to applicable law, see Practice Note: Applicable law—a guide for dispute resolution practitioners. Contracts may include a single provision combining jurisdiction and applicable law. For guidance on jurisdiction clauses, see Practice Note: Jurisdiction agreements—introduction. What is an applicable law clause? An applicable law clause records the parties’ agreement, reached during contract negotiations, specifying which country’s laws the courts are to apply if a dispute arises between the contracting parties and proceedings are commenced that require a...

Introduction Where a property transaction in England and Wales involves an overseas company, a legal opinion should be obtained. Common examples include: the sale or purchase of land the grant of a lease the provision of a guarantee the taking or granting of any security For this Practice Note, an ‘overseas company’ is any entity incorporated outside the United Kingdom (that is, outside England, Wales, Scotland and Northern Ireland). Companies formed in the Channel Islands and the Isle of Man are treated as overseas companies. This aligns with the Companies Act 2006 and the Land Registration Rules 2003, SI 2003/1417. Note that advice from solicitors qualified in Scotland or Northern Ireland may be needed where the property is located in Scotland or Northern Ireland, or where the contracting party is a distinct legal entity not governed by the Companies Act 2006. Also, a legal opinion will be necessary where a...

Types of security Under English law, four principal forms of security exist: Mortgage Charge Pledge Lien This Practice Note sets out: the nature of a charge (as contrasted with other security interests) the distinction between a fixed charge and a floating charge the asset classes commonly subjected to fixed charges perfection of fixed charges priority issues when taking a fixed charge The Note mainly centres on fixed charges. Practice Note: Floating charges offers fuller detail on floating charges, including factors to weigh when taking a floating charge, and matters of crystallisation and re-characterisation. Special rules govern agricultural charges; for details, see Practice Note: Agricultural charges under the Agricultural Credits Act 1928. Key takeaways Nature of a charge – it grants the secured creditor an equitable proprietary interest without passing title or possession, setting it apart from...

ARCHIVED : This Practice Note has been archived and is not maintained. The Property case tracker presents key 2025 judgments we regard as relevant to property lawyers. Items are ordered with the latest first. The tracker uses the following definitions: AST: assured shorthold tenancy; CVA: company voluntary arrangement; FTT: First-tier Tribunal; HMO: house in multiple occupation; LPA: local planning authority; NPPF: National Planning Policy Framework; RRO: rent repayment order; RTM: right to manage; TCC: Technology and Construction Court; UT: Upper Tribunal ( Lands Chamber); VTE: Valuation Tribunal for England See also the Property key future developments tracker, which follows the progress and outcome of appeal cases, whereas this document provides a summary of all cases that we consider relevant to property lawyers. See further: Property case tracker—2024 [ Archived] Property case...

This Practice Note explains the very limited circumstances in which an easement can be used for the benefit of subsequently acquired land. For broad guidance on what easements are, consult Practice Note: Easements—nature and characteristics. See also: Easements—overview. Where an easement is created expressly, the scope of the land that enjoys it (the dominant land) and the land upon which it is imposed (the servient land) must be certain at the date of the grant. The advantage conferred by an easement does not reach to any land later appended or joined to the dominant land. If an easement is asserted by prescription or long user, the limits of both dominant and servient land must be established by the evidence relied upon to found the claim. As with express grants, the benefit of a right obtained by prescription or long user cannot be...

This Practice Note examines the landlord’s duty to repair at common law, how that duty is typically adapted in repairing clauses within full repairing and insuring ( FRI) commercial leases in Scotland, points to address when drafting and construing such clauses, and the role of a schedule of condition when agreeing the tenant’s repairing obligations under the lease. The Practice Note does not deal with residential or agricultural leases. For agricultural leases, see Practice Notes: Buildings and other fixed equipment in agricultural tenancies in Scotland, Improvements and fixtures—agricultural tenants— Scotland, and Buildings and other fixed equipment in agricultural tenancies in Scotland. For disputes that may arise concerning repairs or dilapidations, see Practice Note: Repair and dilapidation disputes—commercial leases in Scotland. Repair under the common law At common law, a landlord, when compared to a tenant, bears relatively onerous...

Planning permission—does demolition constitute 'development'? Under section 57(1) of the Town and Country Planning Act 1990 ( TCPA 1990), any works amounting to development on land require planning permission. Development is widely cast to include building, engineering or mining operations, as well as any material change of use. By virtue of TCPA 1990, s 55(1A)(a), demolishing a building is specifically identified as a building operation and therefore comes within the statutory concept of development. Accordingly, planning permission is generally needed for most demolitions. See Practice Note: Operational development. For these purposes, ‘building’ in TCPA 1990, s 336 covers any structure or erection and any part of a building, but excludes plant or machinery contained within a building. However, TCPA 1990, s 55(2)(g) permits certain categories of demolition to be removed from the definition of development where the Secretary of State issues a...

This Practice Note sets out how to investigate title to unregistered land, with particular emphasis on compulsory first registration, which party ought to register, the evidence of title that is needed, what constitutes a good root of title, and the significance of maintaining an unbroken chain of ownership. Compulsory first registration A purchaser of an unregistered freehold or a lease with more than seven years unexpired (a ‘qualifying estate’) has a statutory duty to apply for first registration. The purchaser must apply within two months of the event that triggers first registration. If that time limit is missed, the purchaser takes only an equitable title. The legal estate reverts to the seller and is held on a bare trust for the purchaser. This creates a risk that the seller could transfer the land elsewhere, or create further encumbrances, leaving only a claim for breach of...

Creation by transfer of property to trustees In practice, trusts are commonly established when a settlor conveys assets to independent trustees, who then hold the property on trust for named individuals. The formalities for a valid voluntary trust (that is, one without valuable consideration) must be observed. A voluntary trust is regarded as fully constituted when: the instrument declaring the trusts has been duly executed the settlor has, having regard to the nature of the asset, done all that is necessary to transfer the property to the trustees In practice, the property most frequently settled includes: beneficial interests under other trusts insurance policies debts chattels shares in a company land Solvency both before and after an undervalue transaction is significant in guarding against the trust being set aside. Although rare, a settlor may choose to make a...