Legal Practice Notes

The Electronic Communications Code Section 4 and Schedule 1 of the Digital Economy Act 2017 introduced into the Communications Act 2003 an updated Electronic Communications Code, replacing the earlier Code on 28 December 2017. For guidance on the Code’s provisions, see the following Practice Notes: The Electronic Communications Code—code rights The Electronic Communications Code—terminating and renewing code rights Previous Electronic Communications Code [ Archived] This Practice Note addresses the obligations on electronic network providers designated as ‘ Code operators’ by the Code to comply with conditions showing they hold sufficient funds to satisfy their liabilities. These conditions are contained in the Electronic Communications Code ( Conditions and Restrictions) Regulations 2003, SI 2003/2553. The Communications Act 2003 and the Digital Economy Act 2017 ( Consequential Amendments to Secondary Legislation) Regulations 2017, SI 2017/1011—which deal with consequential amendments to secondary...

Wrongful interference with an easement as a private nuisance This Practice Note addresses wrongful interference with an easement as a form of private nuisance and explains: what amounts to actionable interference alteration and deviation of rights of way estoppel through acquiescence by a beneficiary remedies and damages procedural steps to bring and defend an easement infringement claim Interference with an easement amounts to private nuisance. A claimant must first prove the easement exists for any action to succeed. For broader guidance on private nuisance, see Practice Note: Private nuisance—general principles. In Gosling v Bradbury, the claimants sought a declaration confirming a legal easement entitling them to take water from a borehole on the defendants’ farm, together with an injunction preventing any further interference or obstruction of that supply. They also contended that there was an ancillary easement permitting...

Highway drain For the purposes of section 100 of the Highways Act 1980, a ‘highway drain’ is taken to encompass a ditch, gutter, watercourse, soak-away, bridge, culvert, tunnel or pipe. Yet, to qualify as such, it must have been built to convey away surface water from a road, and that was the purpose for which it was constructed. A ‘highway drain’ is not a sewer because it is not employed for draining buildings or yards, though it may become one if its role comes to include draining those premises. When a dispute arises about the character of a pipe, the decisive question is: for what purpose was the pipe installed? The same approach applies where there is disagreement over whether a feature is a land drain or a highway drain, and the analysis is identical. The point is determined by asking whether, viewed against all the...

At times, a beneficiary seeks to reclaim a particular asset. In such a scenario, tracing is the remedy of choice, as the claimant aims to demonstrate a proprietary entitlement to the item. A crucial distinction must be drawn between pursuing the very asset once owned and identifying a replacement property that now stands in for what was formerly held. A clear illustration is an attempt to prove title to a house purchased with the proceeds from selling a house that formed part of a trust. In the first situation, the claimant need only show that the property was theirs; in the second, the path is less direct, because equitable principles are engaged. Although the expression tracing is commonly used, and will be used here, it is often clearer to describe the former as ‘following’ and the latter as ‘tracing’. As a leading case...

Shared Ownership ( SO) Shared Ownership ( SO) is a government-backed route intended to widen access to home ownership, predominantly for leasehold properties. Purchasers begin by buying a stake in their home and paying rent on the remaining share. They can then acquire additional slices of equity over time through staircasing, ultimately reaching full ownership at final staircasing. Although often called ‘part rent part buy’, a more accurate description is that the SO buyer holds an equity interest while renting under a lease. Across England, excluding Greater London, SO is delivered via Homes England ( HE) funding programmes: for SO homes delivered 2016–21, under the Shared Ownership and Affordable Homes Programme 2016–21 ( SOAHP 2016–21) since 1 April 2021, under the Affordable Homes Programme 2021–26 ( AHP 2021–26) The rules and requirements governing SO are set out in Chapter 1 of HE’s Capital...

Structure This Practice Note proceeds on the basis that the funder supplies finance only to the JV (ie a cash loan to be repaid with interest). If, however, the funder wishes to join the JV as a participant, see Practice Note: Property development joint ventures—acting for an investor, which considers a funder’s position when investing. Likewise, where the funder is to forward fund the scheme (often called a ‘forward funding’ or ‘forward sale’), it would typically purchase the property itself and grant the developer a licence to undertake the works. In substance, that is an investment by the funder, with returns realised through lettings or other disposals of the finished scheme. Strictly, it is not a joint venture and may instead be documented contractually via a forward funding agreement or forward sale contract. For more detail, see Precedents: Forward funding agreement and Forward funding...

This Practice Note aims to outline the principal distinctions between Scots law and English law concerning the creation of fixed security over land and buildings. These differences extend from the forms of security that can be taken over real property, to the ways in which such security is perfected and the significance of those perfection requirements. For broader guidance on taking security over land and, in particular, the position in England and Wales, see Practice Note: Taking security over land. Land and buildings A helpful place to begin is by considering what is meant by land and buildings for the purposes of fixed security. Under Scots law, a standard security can be taken as fixed security over property owned outright (heritable property) or property held under a lease. For leasehold property, a lease for a term of 20 years or less cannot be...

This Practice Note describes the searches to be completed ahead of completion (pre-completion searches), namely: official searches with priority land charges searches company and bankruptcy searches It sets out when each search is required, how to carry it out, the aim and effect of each search, the applicable priority period, and the steps to take if adverse entries are uncovered. It also points out that additional pre-completion searches may be necessary where a document is executed under a power of attorney. These searches are undertaken for the buyer, tenant or lender to verify that the title information obtained during due diligence remains correct at completion. If a lender is financing the acquisition and taking a charge over the property, it may perform some or all of the pre-completion searches itself, or insist on conditions precedent relating to the provision of...

For wider background on Guernsey, see Practice Note: Private client— Guernsey— Q& A guide. Guernsey as a trust jurisdiction Although Guernsey acknowledged the trust concept as early as the eighteenth century, the island’s modern trust services industry took shape in the 1960s and 1970s, prompted by foreign exchange controls, tax and succession planning, and the movement of wealthy residents. It has since adapted to serve an increasingly mobile international client base and to meet a changing international regulatory environment, and now hosts approximately 150 professional licensed fiduciaries (based on primary licensee statistics), spanning large international firms through to independent boutique companies. Trusts were commonly created in Guernsey before the Trusts ( Guernsey) Law, 1989 (the 1989 Law), as evidenced by statutes and court decisions. The 1989 Law affirmed the validity of both Guernsey and foreign trusts and set out the principles applying to them. It has been...

This Practice Note This Practice Note reviews how farming enterprises are structured and financed, the forms of security they may grant, and the enforcement avenues open to creditors. It also examines the risks and considerations before commencing enforcement within the agricultural sector (including matters tied to a lender’s collateral); the operational and practical challenges on the appointment of an insolvency practitioner, and the factors relevant to deciding whether trading should continue. The UK farming sector covers roughly 70% of the nation’s land and helps preserve landscapes of cultural significance. The sector is commonly divided into three principal areas: dairy, arable and livestock. Of total farmland, about 70% is owner-occupied, with the remainder let to tenants. Many farmers rely on subsidies to keep operating. For some, as much as 50% of their receipts are subsidy payments, leaving smaller holdings especially exposed....

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...

Purchasers, sellers, landlords and tenants alike should be mindful of the common law principle of ‘caveat emptor’—‘let the buyer beware’—under which a seller has no obligation to volunteer material facts to a prospective purchaser. For further guidance, see Practice Notes: Property—enquiries before contract and Misrepresentation, misstatement and non-disclosure in property matters. Do note, however, that where a seller wishes to invoke the ‘sold with information’ exclusion under the contaminated land regime in Part IIA of the Environmental Protection Act 1990 ( EPA 1990), relevant information must be supplied... Numerous environmental concerns can expose parties in property transactions to liability, so a proportionate level of environmental due diligence is advisable whenever property is transferred. This Practice Note considers how environmental consultants support clients during property deals and identifies environmental matters most likely to carry material financial or legal consequences, which should therefore be...

The Land Registration Act 2002 ( LRA 2002), succeeding the Land Registration Act 1925, empowers HM Land Registry to continue maintaining the register of title to land in England and Wales. For each title, the register comprises a property register and a proprietorship register and, where needed, a charges register. Historically, HM Land Registry provided a paper land certificate (or, where the property was charged, a charge certificate) to the registered proprietor as proof of ownership; these were rendered obsolete when the LRA 2002 commenced. Ownership is now demonstrated by official copies of the register. See Practice Note: How to obtain official copies of the register from HM Land Registry. This Practice Note considers the separate registers of title, the effect and conclusiveness of registration, and the owner’s powers under the LRA 2002. Property...

This Practice Note explores certain matters that can arise when enforcing security by appointing a receiver over property held on trust. It also addresses trust considerations in the setting of security granted by a partnership. Several banks have experienced issues when relying on standard-form security documents where their client is a partnership and the secured property is either used by the partnership or constitutes a partnership asset. Commonly, enforcement pitfalls have not been anticipated when the security is taken, and the standard documentation has not been modified to accommodate this. Trusts of land HM Land Registry’s Land Register records ownership of the legal estate in land—the ‘paper title’—that is, the rights of the registered proprietors to execute a valid transfer passing ownership to another person. The Land Register does not record the beneficial (equitable) interest and, as a result, the Land Registrar is not fixed with...

In real estate finance, a property’s valuation is critical to any lender, because it is the principal asset over which the loan is taken as security. Accordingly, valuations are required to calculate the loan to value ( LTV) financial covenant (see Practice Note: Real estate finance—financial covenants). Such valuations are typically supplied as a condition precedent to drawdown (often defined as the ‘ Initial Valuation’) and then obtained periodically for the duration of the facility. Where to start with drafting the valuation provisions in a real estate finance transaction The Loan Market Association ( LMA) includes clause language to address these requirements within its real estate finance facility agreements—see clause 16.3 ( Costs and expenses—valuations) and clause 19.15 ( Representations—valuation) in each of the: Single Currency Term Facility Agreement for Real Estate Finance Multiproperty Investment Transactions ( LMA REF Investment Facility...

Responsibility for flood management and drainage in England and Wales has evolved through a tangled past. In 1927, a Royal Commission on land drainage observed that arterial drainage was overseen by a bewildering patchwork of authorities created by five centuries of piecemeal law, with liabilities governed by no consistent scheme and often out of date or unclear. That inheritance persists, though reforms over the last 25 years have helped to rationalise the regime. Historically, individual landowners held primary duties, and some still apply; see Practice Note: Flood management and drainage—landowner rights and responsibilities. Today, public bodies play leading roles in protecting communities from flooding. Key legislation The responsibilities of public bodies for flood management and drainage in England and Wales are outlined in separate Practice Notes: Flooding— UK policy and legislative framework Land Drainage Act...

This Practice Note sets out what acts an unincorporated association, together with its members or office-holders, may undertake in a finance transaction. Any mention of an association refers to an unincorporated association. It also explains the steps to investigate capacity and authority under English law. Unincorporated associations are often used by clubs, societies and charities. This Practice Note does not address the charity law issues that apply to unincorporated associations which are charities. For information on charities, see: Practice Note: Charitable incorporated organisations Practice Note: Taking security over charity assets—key considerations Practice Note: Mortgaging charity land—mortgagee’s considerations Practice Note: Mortgaging charity land—charity's considerations Charity regulation—overview What is an unincorporated association? The courts have described an unincorporated association as ‘an association of persons connected by identifiable rules and with an identifiable membership’. An unincorporated...

Background to the scheme The Association of British Insurers ( ABI) and government operated an accord, the Statement of Principles ( So P), in effect from 2000. Through the So P, the insurance market pledged to make flood cover for homes and small enterprises available widely as part of standard household and small business insurance policies where flood risk was not considered material (typically interpreted as no worse than a 1 in 75 year annual chance of flooding). The So P also placed an obligation on insurers to consistently keep offering flood cover to existing domestic policyholders and small business customers at significant risk (more than a 1 in 75 year annual probability of flooding). The continuation of such cover relied on the Environment Agency having publicly announced plans to bring the local flood risk down to below a 1 in 75 annual...

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......

Environmental insurance has become a routine instrument for managing environmental risk, used by operational businesses and across numerous transactions and development projects. Further guidance on environmental insurance generally can be found in the following Practice Notes: Environmental insurance—when is it needed? Environmental insurance—extent of coverage Environmental insurance—types Some of the principal advantages and disadvantages of environmental insurance are set out below: Advantages Competitive pressure in the market has lowered premium levels Gives reassurance where the strength of an indemnity covenant is in doubt Can serve several stakeholders (seller, purchaser, tenants, funder) and assist in closing transactions Cover can be arranged for defined scenarios (eg concerns about a contractor disturbing legacy contamination) Tackles worries and uncertainties around unknown contamination (eg the environmental report or remediation may have missed significant areas) Offers protection for...