Legal Practice Notes

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 examines the actions commonly undertaken by companies in the setting of finance transactions and outlines the steps that can be taken to confirm the capacity and authority of a company incorporated under English law. There are various types of company incorporated in England and Wales that may participate in a finance transaction. For more information on different types of company, see: Types of borrowers— Companies. For the purposes of this Practice Note, the assumption is that the entity in question is a private company limited by shares, since most finance transactions in England and Wales will feature at least one such company as borrower or as a provider of security... Why is it important to understand the acts a company will perform in a finance transaction? Lender's perspective A lender will seek to understand the acts a company will carry out in a...

This Practice Note This Practice Note reviews the range of acts typically undertaken by English law partnerships in the context of finance transactions and sets out the practical steps that can be taken to check and evidence the capacity and authority of an English law partnership. There are two categories of partnership recognised in English law—a general partnership and a limited partnership ( LP). Each is subject to its own legislative regime and associated guidance, as follows: general partnerships are governed by the Partnership Act 1890 ( PA 1890)—see Practice Note: The nature of a general partnership and its legal framework; and limited partnerships are governed by the Limited Partnerships Act 1907 ( LPA 1907)—see Practice Note: The nature of a limited partnership and its legal framework. These are distinct from limited liability partnerships ( LLPs), which are corporate bodies...

A rentcharge A rentcharge is a monetary sum secured on land. It can impact both freehold and leasehold interests, binding each estate alike. Ordinarily, the owner of the rentcharge (the 'rent owner') retains a recurring payment when a property is disposed of on sale, payable at set intervals. Rentcharges were common in the Victorian period, being used to give the seller of freehold land a continuing income from the property after completion of the transaction. The amounts involved were material at the time, but today the yearly sums reserved by rentcharges are typically under £10. They are sometimes, albeit mistakenly, described as 'ground rent' or 'chief rent'. Rentcharges are also employed to make positive covenants, or contributions towards the cost of services, enforceable against successors in title—often called estate rentcharges (see Practice Note: Estate...

Introduction to flood searches Flooding has become a leading environmental hazard in the UK, with wide-ranging consequences for homeowners, lenders, surveyors, developers and other businesses. Rising flood risk is a consequence of climate change. For further insight into climate change and its influence on flooding, see News Analysis: A new era of climate change reality—a rising tide. As extreme weather events increase, urban environments are more exposed because floodwater cannot infiltrate hardstanding paving and be retained within underlying soils. Consequently, places susceptible to flooding can no longer be assumed to be only those close to rivers and streams. Tools and data to evaluate climate risk are now more readily available. Flood searches are a critical component of due diligence, identifying flood risk at a site-specific scale and advising on the best ways to mitigate and adapt to such risks. When are flood searches...

An unpaid vendor’s lien operates as an equitable charge, giving the seller security in equity for the agreed price, and it applies to both freehold and leasehold property. Nature This lien is an equitable right to a charge that exists independently of contract terms and of possession, arising automatically by operation of law. It is grounded in the principle that a person who has obtained possession of property under a contract for valuable consideration cannot retain it without paying that consideration. As an equitable remedy it is subject to the usual equitable constraints, and relief may be withheld if the vendor’s conduct has been improper. When it arises The lien comes into existence on exchange of contracts and is not contingent on completion. It persists even where the vendor executes an outright transfer and surrenders possession of the property (and, if relevant, the title deeds). It arises: whether all or part of 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...

Mandatory licensing A house in multiple occupation ( HMO) satisfying the statutory threshold in section 254 of the Housing Act 2004 ( HA 2004) must hold a licence in law under that statute. This Practice Note explains when a mandatory licence is needed, the compulsory licence conditions, and the local housing authorities’ ( LHAs) discretion to introduce additional licensing designations within their areas. HA 2004, Pt 2 places a duty on each LHA to administer mandatory licensing effectively throughout its district. Discretionary (or additional) licensing captures other private lettings of dwellings where the LHA alone considers it appropriate. In England, the Licensing of Houses in Multiple Occupation ( Prescribed Description) ( England) Order 2018, SI 2018/221 specifies that mandatory licensing covers HMOs with five or more occupants comprising more than one household, without regard to the number of storeys. In Wales, the...

Practice Note Under the Housing Act 1985 ( HA 1985), a landlord seeking possession of a dwelling let on a secure tenancy must first obtain a court order. The process to recover possession differs according to the tenancy type: fixed-term periodic flexible This Note details the requirements for the Notice of Seeking Possession to be served on the tenant and the grounds for possession. For guidance on how a secure tenancy arises, see Practice Note: The tenancy condition. From 1 December 2022, tenancies and licences of dwellings in Wales are governed by the Renting Homes ( Wales) Act 2016 ( RH( W) A 2016), subject to certain exceptions. Secure tenancies may no longer be created and existing secure tenancies will convert automatically into occupation contracts. The terms of both existing and new tenancies must be considered in the context of RH( W) A 2016 to...

This Practice Note discusses the sanctions in place for those who do not comply with the houses in multiple occupation ( HMOs) licensing regime It outlines criminal offences arising from breaches and describes the sanctions available for HMO contraventions, including failures to obtain a licence, non-compliance with licence conditions, or acting in defiance of a banning order. Potential measures include: interim management orders ( IMOs) final management orders ( FMOs) rent repayment orders ( RROs) financial penalties banning orders The Note also summarises how sanctions are pursued and the routes to appeal. Responsibility for enforcing the HMO licensing system sits with the local housing authority ( LHA) for the area where the HMO is located. See Practice Notes: Houses in multiple occupation ( HMOs) and Houses in multiple occupation ( HMOs)—applying for a licence. A range of licensing...

Environmental insurance Environmental insurance is a means of transferring risk to indemnify the insured for losses that may arise from potential environmental liabilities. A variety of policies are available to address the different types of loss linked to such liabilities. For more on environmental insurance, see Practice Notes on: When it is needed Scope of cover Advantages and disadvantages Transactions Businesses Remediation and development projects Contractors and consultants Chemical sites Landfills Petrol stations Scope of environmental insurance Losses covered Environmental insurance solutions can be arranged to cover a broad range of losses stemming from an environmental liability. Typical insurable losses include: On-site and off-site remediation: investigation and remediation costs, reinstatement of damaged property or services, settlement payments, and related legal expenses where contamination is identified Third-party property damage: remediation and restoration costs arising from harm to...

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...

This Practice Note is about the issues that arise on a transfer of a going concern involving land and buildings For VAT purposes, a transfer of a going concern ( TOGC) carries two separate meanings: the ordinary sense, being simply the disposal of a continuing business—this is relevant, in particular, to the purchaser’s VAT registration position; and a transaction treated as a non-supply for VAT purposes, so that, in particular, no VAT is chargeable on it Although both uses are often described as a TOGC, for the remainder of this Practice Note the term is confined to the second of these meanings, referring to a non-supply......

This Practice Note sets out how the capital allowances rules interact with the rules relating to: capital gains tax, including corporation tax on chargeable gains ( CGT) value added tax ( VAT) stamp taxes, namely: stamp duty land tax ( SDLT) in England and Northern Ireland land and buildings transaction tax ( LBTT) in Scotland land transaction tax ( LTT) in Wales It is often, but mistakenly, believed that a claim to capital allowances for plant and machinery will cut the CGT base cost of an asset and so increase any chargeable gain. That is not the case: claiming plant and machinery allowances does not reduce a taxpayer’s CGT base cost in a capital asset...

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...

Nature of duties The distinction between a duty and a power is clear: performing a duty is mandatory, whereas powers are, to varying extents, matters of discretion. A trustee’s obligations to a beneficiary are fiduciary in character. Ordinarily, the court will not force a trustee to exercise a mere power against their wishes; however, it will require the performance of powers attached to a trust that possess the nature of a trust or obligation, as recognised in Mc Phail v Doulton: ‘ Where duty and power are coupled the court can compel the trustees to perform the duty.’ A trustee who does not fulfil their duties commits a breach of trust. Trust property The common law duty A trustee must enquire into the trust property, take control of it, and then ensure its preservation: where there are multiple trustees, title to trust property must be in the joint names of them...

Pool Reinsurance Company Limited (also known as ' Pool Re') Formed in 1993 after a spate of terrorist attacks in the early 1990s across London and elsewhere in England connected to the situation in Northern Ireland, Pool Re arose when the scale of losses exposed how hard it was to insure commercial property against terrorism. Potentially vast claims and the absence of any reliable way to predict future losses meant traditional solutions failed. As insurers relied on reinsurers to shoulder exceptionally large claims, both sides concluded they could no longer offer terrorism cover through conventional means. Pool Re is a mutual reinsurer, funded and owned by the vast majority of insurers and Lloyd’s Syndicates that underwrite UK commercial property. The scheme benefits from a government guarantee that will meet claims if the pooled fund is exhausted, reviewed every five years; HM Treasury extended this in March 2022 for a...

This Practice Note is aimed at real estate practitioners. It sets out the fundamentals of liquidation and highlights the principal provisions that contracts for the sale of land should include where the seller is in liquidation. Liquidation, also known as winding up, is the means by which a company is brought to a close. When a company enters liquidation its business comes to an end, though it may need to continue briefly as part of the winding-up process (eg to enforce any valuable contracts). During that process, the company’s assets are realised and the proceeds are distributed to those entitled......

Agricultural Holdings Act 1986 Under the Agricultural Holdings Act 1986 ( AHA 1986), either party—the landlord or the tenant—may require that the ‘rent properly payable’ for the holding ‘from the next termination date’ be fixed by arbitration or by a third party. The ‘next termination date’ is the earliest point at which the tenancy could have been brought to an end by a notice to quit served on the date of the demand. In practice, this is the first anniversary of the term date falling not less than 12 months after the rent review demand. As framed, this statutory mechanism cannot be used to force a rent review for a fixed term tenancy, because only yearly tenancies are capable of determination by notice to quit (this includes fixed terms that have continued under AHA 1986, s 2 once the fixed period has...

Powers to adopt The Highways Act 1980 ( Hi A 1980) empowers highway authorities to take on new highways by agreement, imposes a duty on them to look after adopted highways at the public expense, and enables payments to be made to highway authorities for highway works and their upkeep, where the authority is content that such works will benefit the public. Section 38 agreement Adoption under Hi A 1980, s 38 is a well-used mechanism for delivering new highways that are maintainable at the public expense. A developer must build streets to an agreed specification, having obtained the highway authority’s technical approval for the designs. This occurs under a legally binding agreement between the developer and the highway authority made pursuant to Hi A 1980, s 38, referred to as a section 38 agreement. The section 38 agreement sets out the...