PropertyLaw.guru Blog

EG 13-06-19

NEWS p.13 New voluntary code or practice to be issued to reduce the tensions between Landlords and Tenants over rent payments, not altering lease terms, ‘rent payment plans’ to avoid forfeiture claims, insurance and service charges (possibly reduced where the property isn’t being used) to be paid as a priority, 
p.15 Flex office space - 50% rent rent reductions but business starting to pick up
P37 June quarter rent date will be a test - in Scotland on 28 May (their rent days are different!) - only 40% of commercial rents were paid!

LEGAL
p.43 The 6 yr saga & the  SC decision - Cardtronics Europe v Sykes [2020] UKSC 21. ATMs on retailers property should not be treated as separate for business rates - resulting in an estimated £500M of refunds due

p.45 Duval quandaries - examples of how the Duval decision affects freeholders asked for consent to alterations in breach of absolute covenants, unless all the tenants agree. But even if there is no mutual enforceability covenant in the leases, consent to alterations that could interfere with other tenant’s enjoyment of their flat could result in a ‘breach of covenant of quiet enjoyment’ claim by the affected tenants (eg where a flat roof is turned into a terrace)

p.46 What happens when a business tenant stays on after the end of their lease? Will a secure periodic tenancy be created? Or will it be a tenancy at will? It depends on whether there is dialogue between L & T over a new lease. A formal tenancy at will may be advisable or a letter at least clarifying the terms of occupation. There are particular problems on portfolio purchases from receivers where due dili isn’t done

p.48 Buyers must inspect registered leases R (HCP (Hendon)) v Chief Land Registrar [2020] EWHC1278 - LR identified and overlap in areas demised by a lease of the "second floor" airspace above  some flats and the existing first floor leases so registered it as a concurrent lease (interposed between the existing occupational lease and the reversion). Its likely the buyer’s solicitors didn’t read the first floor leases to see the extent of their demises and realise that they included the roof and therefore some of the airspace being demised so LR correctly registered a concurrent lease. IMHO Poor quality cheap corner-cutting 'don’t-read-anything-other-than-LR-registers' conveyancing will come a cropper every time, especially with lease plans which are often wrong. Rant over.

p.48 Service charge Sara v Hossein Asset Holdings Ltd v Blacks Outdoor Retail [2020] EWHC 1263. Always a tricky one service charge clauses. L generally charged £50k pa for the SC, but then in 2017 levied a SC of £400,000 ! in anticipation of Blacks lease expiry, and claimed that the landlord’s certificate was conclusive, which had been prepared by L’s  managing agent. Although there were dispute resolution provisions in relation to the proportion of Service Charges, there was nothing about the amount itself being determined independently. The result would be L was judge in its own cause and so the court held T was entitled to raise issues about the scope of the service charge and they were capable of being determined by the court

p.49 Planning. General essay on the uncertainty of making applications for planning and the interplay of NPPF, site specific issues, development plans, sustainable development, what issues are relevant, subjectivity of the design maker - the planning committee or officers, the appeal system, local politics, levels of engagement by members, national politics, etc. The whole process seems fraught with uncertainty 

p.50 Covid in the countryside. The challenges to famers economically- horticulture - loss of orders, loss of stock, lack of seasonal picking labour, the weather, the flour shortages caused by lack of paper bags for the flour (!), etc. Pity the poor farmer..

p.51 Dreams v Pavilion Property Trustees [2020] EWHC 1169 concerned the purchase of a lease of retail warehouse in Margate (out of an administration) which didn’t expire until 2031. However, the buyer Dreams entered into an agreement with the landlord to shorten the term and allow it to be surrendered it 5 years earlier. Dreams served the required notice and L priced a schedule of dilaps, but some of the works were not done on the date due and so L refused to accept a surrender until it got £100k for the work remaining to be done, claiming that it was a condition of completion that the tenant is to pay any money due on completion. Dreams sought specific performance of the agreement to surrender; on a hearing of preliminary issues, Dreams claimed that the money was not ‘due’. The court held that for it to be ‘due’ it had to be identifiable on completion, whereas dilaps claims can only be quantified after the lease ends. The agreement also held that Dreams would be released absolutely on completion of the surrender - meaning they wouldn’t have to pay the dilaps claim! The Court said though this was surprising (some negligent drafting in there?) it was not the court’s job to re-write bad deals. The other point was vacant possession as Dreams hadn’t removed the mezzanine floor. The court held that it might be able to order specific performance conditional on minor breaches but that wasn’t the case here, but this was a contract for transfer of an estate incorporating the SCPC, not a break clause. So not giving VP and since no notice to complete had been served, time was not of the essence so failure to give VP didn’t terminate the tenants rights immediately! Lessons to be learned from this case for anyone doing hurried deals with landlords in the pandemic!
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