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This briefing note is only intended as a general statement of the law and no action should be taken in reliance on it without specific legal advice.

REAL INSIGHTS - Property Update - April 2015
 Briefing 
Date
30 April 2015

REAL INSIGHTS - Property Update - April 2015

MISHCON and CAPITAL & REGIONAL HOST PRE-ELECTION DEBATES

As the countdown to the general election began, Mishcon de Reya hosted two pre-election Q&As with Housing and Planning Minister Brandon Lewis MP and Shadow Communities and Local Government Minister Roberta Blackman-Woods MP to get their views on Planning for the Future of our Towns and Cities.

Co-hosted with shopping centre owner Capital & Regional plc and chaired by Estates Gazette's Deputy Editor Samantha McClary, the events offered our guest audiences the opportunity to hear the planning strategies of the two main political parties. The Q&A with Brandon Lewis MP was originally planned as an evening debate for an audience of over 100 guests but, thwarted at the last moment by a three line whip in the house, it was hastily rescheduled as a small breakfast roundtable.

Please click here to read about the Q&A with Roberta Blackman-Woods.
Please click here to read about the Q&A with Brandon Lewis.



New rules for assured shorthold tenancies

If you grant assured shorthold tenancies (ASTs) you need to read this and file it away as important information.  You might even want to pick up the phone and discuss it with one of us.  

The Deregulation Act 2015, passed just before Parliament was dissolved, imposes new rules for ASTs.  This article looks at some of them.

Tenancy deposits

First a brief reminder.  If a tenant pays a deposit on an AST, the landlord has 30 days to:

  1. register the deposit with an approved tenancy deposit scheme;  and
  2. give the tenant prescribed information setting out how the deposit scheme works.

If the landlord fails to comply, the court must impose a penalty of between one and three times the amount of the deposit.  The landlord also cannot serve notice to terminate the tenancy.

Note that if you don't grant a tenancy, but merely buy a property with tenants already in place, you need to check the formalities have been followed or you could have difficulties too.

The deposit rules were introduced in April 2007, but the original legislation caused difficulties with older tenancies and renewals.  The Deregulation Act now aims to clarify the position:

  • If a deposit was taken before April 2007 and was not protected at the time, then the deposit must be registered now and the prescribed information served. If this is not done, the landlord will be unable to serve notice terminating the lease.
  • If a deposit was taken after April 2007 and properly protected, but the prescribed information was not re-served following a renewal, then so long as the deposit continues to be protected and the tenancy details have not changed there will be no breach. 
  • If a deposit was taken prior to April 2007 and the tenancy was renewed after April 2007, then the deposit must be protected by 23 June 2015 or the penalties set out earlier will be imposed.

"Retaliatory" eviction

From October 2015, new rules will make it harder for a landlord to serve a termination notice if the tenant has made a complaint regarding the condition of the premises and the landlord has not responded (or its response is inadequate). 

If the landlord does attempt to serve a termination notice following a complaint, the tenant may contact the local housing authority. They will consider the complaint and could issue a notice invalidating the termination.

The changes are aimed at landlords who avoid carrying out repairs by simply evicting any tenant who complains, then re-letting to someone else.  However, the new rules need to be monitored closely as there could be scope for unscrupulous tenants to cause problems for their landlords.

Jonathan Warren is an Associate in our Real Estate litigation team.



NEW REGULATIONS TURN UP THE HEAT FOR LANDLORDS

New regulations have been introduced to control the metering and billing of heating, cooling and hot water in commercial and residential properties.

Landlords of properties with more than one tenant and a communal heating system will be caught by the rules. Failure to comply is a criminal offence and can lead to a fine. There are three main obligations:

1. Billing

If sub-meters are already installed, bills must be based on actual consumption and comply with other detailed requirements set out in the regulations.

The regulations will override the lease provisions. So, for example, if the lease provides for the tenant to pay a fixed percentage of the heating costs based on floor area, the bill must instead be based on actual consumption. If this is more than the fixed percentage, the regulations do not make it clear whether the tenant can be required to pay the higher amount.

2. Duty to notify

A landlord caught by the rules must notify certain information (e.g. the estimated consumption of energy and the type of meters) to the National Measurement and Regulation Office ("NMRO") by 31 December 2015. This information must be updated at least every 4 years.

3. Duty to install meters

By 31 December 2016, landlords must install meters and temperature control devices. There is an exemption where the landlord can show, in line with detailed provisions set out in the regulations, that this is not cost effective or technically feasible.

If this exemption applies, the landlord must still install heat cost allocators, thermostatic radiator valves and hot water meters, except where the same exemption applies again.

There is no exemption if the landlord cannot obtain entry to the property to install the apparatus. However, in most cases it seems unlikely a tenant would object, as it is usually in the tenant's interests and the inconvenience should be minimal.

It obviously depends on the exact wording of the lease, but landlords should be able to recover the costs of installing the meters and other apparatus through the service charge.

These regulations will be another headache for landlords and it is questionable whether they will do much to achieve the aim of reducing CO² emissions. We will wait to see how rigorously the NMRO enforce the regulations, but most landlords are unlikely to want to risk the penalties of failing to comply.

Lucy Smith is a Professional Support Lawyer in the Real Estate Department.


 

INFRASTRUCTURE ACT 2015: WHAT IMPACT WILL IT HAVE ON THE PLANNING SECTOR?

The Infrastructure Act became law on 12 February 2015 introducing new measures to make it easier, quicker and simpler to get Britain building. These measures include:

  • allowing the deemed approval of discharges of planning condition;
  • provision for Mayoral Development Orders; and
  • amendments to the consideration of the nationally significant infrastructure projects (NSIPs).   

Deemed approval of planning conditions

Developers will certainly welcome the proposal for regulations allowing deemed approval of planning conditions. Developers may have more certainty that they can get an approval of planning conditions within a specific timescale. Anything which reduces the unknowns associated with the planning system will always be appreciated.

The regulations do not, of course, prevent the local authority from rejecting the planning condition application, so a developer's timescale is still not completely certain. It will, however, be particularly useful where a developer is seeking to discharge pre-commencement conditions and implement a permission which is close to expiring. What is not clear is how easy it will be to demonstrate that a deemed discharge has occurred when selling on a development.

Mayoral Development Orders

The Mayor is being given powers to create permitted development rights specifically for parts of London. This power already exists for local councils and even neighbourhood forums where there is an adopted neighbourhood plan. It therefore seemed anomalous that the Mayor did not have equivalent powers.

Changes to national permitted development rights such as the office to residential change of use, demonstrates that London has arguably different needs and pressures from other parts of the country. While not capable of removing national rights, a Mayoral Development Order could certainly supplement existing rights and powers London wide, or just in certain boroughs. These powers can also be exercised on a site-specific basis, e.g. allowing the Mayor to loosen planning constraints on a particular growth point or existing business park.

NSIPs

The changes to the process are streamlining more than radical. They are more likely to result in swifter decision-making than have a direct effect on the final result. Objectors may be concerned at the power to reduce the level of consultation required when making minor changes to the approved scheme – however, this echoes the existing regime for non-material and minor material amendments to planning permissions.

Although the Act received Royal Assent, Mayoral Development Orders and NSIPs remain partly in force and will only be fully implemented if approved by the new government in May. 

Daniel Farrand is Joint Head of Planning and Environment.