PropertyLaw.guru Blog

EG 25-01-19

News articles on the BTR sector growing, and repurposing failing retail parks for resi or logistics

Plus a must read interview of Reza Merchant, the charismatic founder of The Collective - https://www.thecollective.com the coolest place to stay in London (I’ve stayed at the Canary Wharf one a few times and bumped into him in the gym!). Co-living, combining high spec but small living quarters with huge up-market amenity areas plus co-working spaces, gyms, swimming pool, saunas, roof level restaurants, entertainment, you name it thrown in  for about £400 pwk is the next big thing IMHO, and many people are getting into this - despite it being a sui generis planning use that doesn’t fit into resi or office. Its not just for hipsters &  graphic designers, and way better than a grotty flatshare in Ealing…Planning a ten-fold increase to 100,000 beds in 5 years and has £1bn backing right now..

Again looking to future trends - p.45 Australia is 10 years ahead of Europe in office trends, also articles on how big tech is demanding sustainable buildings with good EPC, PVs, roof gardens electric charging points, etc, etc

Legal

p.49 Enfranchisement. Reviews the Law Commissions proposals on the valuation of lease extensions and enfranchisement paper issued in early January, and the three schemes proposed. Must read if you haven’t read the paper already as it summarises it well. But it's going to be months till the final papers and years till HMG responds so the question is what do tenants do in the meantime?

p.51 Utilities - gas water electric and drainage  are vital to any development. What happens when the utility provider/operator enters into a wayleave or easement with the land owner rather than use their cumbersome and lengthy statutory procedures? Is the ‘way leave’ binding on the successor to the landowner or can they dig up the pipe or cable!? If its an ‘easement’ but there isn’t a dominant tenement, and what ‘end’ of the pipe/cable is it? Bate v Affinity Water [2019] EWHC 3425 held that just because there was a private easement it didn’t mean the statutory powers were not in play too, so it could not be removed by the successor to the original landowner even though it was difficult to identify a parcel as being dominant

p.52 Specialised Supported Housing is a type of social housing provided for vulnerable adults with special needs, and the demand is increasing. Explains what it is, who provides it, how it is funded, opco/propco structures (like hotels), 20 year sale & leasebacks on FRI leases with indexed rent uplifts, paid by above market rent housing benefit income streams by an RP, and private investors all want a part of this! If you are getting involved in this area for the first time it will help understand the commercial drivers involved.

p.54 L&TA87 - rights of first refusal by tenants on sale of the freehold. What were the developments in 2019? Looks at the York House case on what is a 'building’ and ‘premises’. The premises is identified on an objective basis (without reference to the proposed transaction) so it included the commercial units in that case. Building was held to include the subsoil and airspace up to its full height. So a grant of a lease of the subsoil or airspace will be caught, and any part of the surrounding courtyards and outbuildings will be an appurtenance if not the building itself and therefore caught. Common parts can include even boiler rooms that the Ts never visit, and a caretakers flat and roof space up to the chimney height. So a grant of a lease of common parts is caught by the Act. In that case, the grant of a reversionary lease between the husband and wife were not caught. Flats were held not to come into existence until their construction was sufficiently advanced that they were capable of being occupied. Until that point L can make disposals without being caught by the Act.

p.55 Relaxation of restrictive covenants under s.84 LPA25. In Berkeley Square Investments Ltd v Berkeley Square Holdings, the tenant of a townhouse succeeded in widening the user provisions to allow use as a private members club from office use. This was held to be a reasonable user under (aa) and (no Injury under (c) and no compensation was payable to L.

p.56 Telecoms Code - RICS issues guidance to surveyors dealing with such matters, non-mandatory though, and clarifies their professional duties and application of the Red Book to valuation issues

p. 57 Right to Manage claims. Lexham House RTM Co Ltd V European Investment & Development Properties its 2019 UKUT 390.Failiure to serve notice on an intermediate landlord was not fatal to the claim as the reality was the the intermediate landlord (who effectively had the airspace value element) had not any real responsibility for the building
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