PropertyLaw.guru Blog

EG 09-05-20


Lots of articles on predictions for the future with covid, some saying its a buying opportunity as interest rates are low, predictions of  rents falling next year by 20+%, and problems with with the flexible space market being at 20% occupancy, plus businesses rethinking their office needs with the success of home working being apparent,  plus the problems of going back to work in an office with social distancing in place - you can’t fit as many people in!

Legal articles
p.51 Testing times for landlords. The proposed banning of statutory demands, winding up petitions ad CRAR - process servers refusing to undertake service of demands and petitions, despite the legislation not even being in draft at present. Points out the banning of forfeiture was off as many tenants can’t operate from shops and offices at present, and landlords aren’t likely to end the lease. Many Ts opted not to pay any rent on 25th March, even big tenants who are not struggling financially, and are not even talking to the landlords, hence Ls using demands and so on. The press release mentioned action would be banned ‘where a a company can’t pay its bill due to coronavirus ‘ - but is this going to be the test?! But what about Ls? Govt is ‘working with banks and investor’ on this - meaning? Many Ts don’t realise they will have to pay interest and costs if action is taken and points out any county court fee alone for £10k-£200k of rent is 5%, and for more than £200k its a fixed fee of £10k! Also Ls may be able to take action on 30th June and insist on 2 quarters rent...

P.52 Banishing Banner Homes - prize winning essay arguing why the SC should separate domestic and commercial equity and arguing the overruling of that case, which applied Pallent v Morgan  equity to commercial cases. 'Pallant v Morgan equity’ arises from a pre-acquisition agreement (which need not be legally binding) between a 7 B, where A will acquire land, and B will have ’some interest’ in the land. A then fails to honour this agreement to either the advantage of A or the detriment of B, the result being that A is considered to hold the land on trust. The transposition of this domestic common intention constructive trust to the commercial sphere has been criticised judicially. Arguments that Stack v Dowden cases where ownership is redistributed should be limited to such domestic home ownership situations alone.

p.54 Edgeware Road (2015) Ltd v Church Commissioners [2020] UKUT 0104. Twantd to turn the 1st % 2nd doors of the basement into a pod hotel, and had obtained planning permission for this use. T sought modification of the lease covenants that prevented this. The Church opposed as it would be detrimental to their  interests and other tenants, plus if released, they would lose their ability to grant long leases as they would have no confidence of being able to enforce user covenants. They would then grant short leases but wouldn’t be able to raise capital. Tribunal (in short) refused to modify the covenants as the disadvantage could not be adequately measured or compensated, so their ability to enforce the covenants did secure a practical benefit of substantial advantage.

p.54 Telecoms Code case - Code rights.More arguments in the EE v Meyrick Trust , over the details of the works sought, Tribunal condemned the Trustees apparent tactics to prolong the dispute over the code, raising objections etc at the last minute, saying co-operation is expected in these disputes

p.Zero Carbon & tax incentives. Govt has introduced a number of tax reliefs and exemptions, but many ones are not aware of them. 1 Plant & machinery - first £1M can have 100% tax relief in the first year. @ thermal insulation qualifies for capital allowances 3 Contaminated land relief - extends to Japanese knotweed, oil tank and asbestos removal 4 Repairs eg replacing single glazing with double glazed units 5 Structural and buildings expenditure. Also R&D tax incentive scheme 

p.56 The 5G conspiracy lunatics - protecting phone mast  What can landowners legally do to predicted themselves against the idiots who think covid is causde by 5G.  Security, where is the risk - operator or landlord, court action, etc

p.57 The application of the Braganza duty to disputes over the sale of plots of land.  The Braganza duty (Braganza v BP Shipping Ltd [2015] UKSC 17) applies to the exercise of a contraction discretion to judgement or evaluation of some state of affairs, which affects the interests of both parties to the contract when there is a conflict of interest between them. The duty required rationality as opposed to reasonableness. The court will first consider the decision making process - did the decision maker ignore something that should have been taken into account or to consider something that was irrelevant ? The second limb is to consider whether the outcome was so perverse that no reasonable person, acting reasonably could ahh made it, even though the decision making process itself could not be faulted? The court is more likely to imply the duty where there is inequality of bargaining power. In this case Kwik Lets v Khaira [2020] EWHC 616, certain companies had agreed in a settlement agreement (settling a court case)  to repurchase certain plots from the buyers to whom they had been sold. The price of £1.5M was payable by instalments, but the companies were entitled to serve a default notice and to suspend payment of the instalments if they considered the plot owners to be in breach of the agreement. The companies took the view the the plot owners were in breach of the confidentiality provisions, served a default notice and stopped paying. The plot ones asked to court to imply a Braganza duty into the provisions for service of the default notice and that there was no reasonable ground for serving it. The Court held a Braganza duty should not be implied in this case.  Rights to revoke rescind or terminate a contract are not the exercise of a discretion, and so the companies were entitled to act entirely in their own interest in serving the default notice. The settlement agreement contained dispute resolution provisions in any case.
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