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On the Horizon

Posted on 17 November 2023

Commercial

On 10 October 2023 the High Court handed down judgment in B & M Retail Ltd v HSBC Bank Pension Trust (UK) Ltd [2023] EWHC 2495 (Ch). This was an appeal of a decision in uncontested lease renewal proceedings and related to the decision of the County Court to insert a redevelopment break clause in the new lease exercisable immediately upon 6 months' notice. The tenant appealed the decision, claiming that the inclusion of the break right defeated the purpose of the Landlord and Tenant Act 1954 in that it removed the reasonable security of tenure that should be given to a tenant.

The High Court confirmed that the County Court was right to include a redevelopment break in the new lease and that this did not defeat the purpose of the Act. In coming to its decision the Court considered the balance to be struck between the landlord's right to develop the property and the tenant's right to security of tenure and considered the conflict between the two. On the facts the Court decided the right result was to include the break clause because without the inclusion of the break right there was a risk that the proposed development would be prevented or unreasonably delayed, causing a potentially serious impact on the landlord. 

BMW (UK) Limited v K Group Holdings Limited, a decision of the County Court handed down in July 2023, also concerned the inclusion of a landlord break right in uncontested lease renewal proceedings. Here the landlord wanted a break right so it could occupy the premises for the purpose of a business run by it. The Court carefully considered the evidence put forward by the landlord to support its claim, but found it vague and unsupported and that it could not justify the dramatic effect the break would have on the tenant.

Penalties on overseas entities who have failed to register themselves on the register of overseas entities have been expanded. Companies House is now able to impose civil penalties for non-compliance with fines of between £10,000 – £50,000 per property plus statutory interest of 8% for unpaid penalties.

On 1 October 2023 the Fixed Recoverable Costs regime was extended. The regime now includes claims with a value up to £100,000 which do not involve multiple parties or great complexity. Exceptions are available, but if your claim falls within the regime then the claim should follow a more streamlined procedure, and what costs are recoverable from the other side will depend on the complexity band that the claim has been set. This depends on the complexity of the issues involved in the claim.

Residential

On 23 October 2023 The Renters (Reform) Bill had its second reading in the House of Commons. We have summarised the key provisions of the Bill here. The government have set out that whilst the Bill includes provisions which will bring an end to no-fault evictions, this will not be implemented until reforms to the justice system have been put in place. The identified areas for improvement in the justice system include digitising more of the court process, exploring prioritisation of cases and bailiff recruitment. In effect, it the ban will not come into effect for quite a while.

On 15 May 2023 following a judicial review the High Court ruled in favour of the Ministry of Defence, finding that the MoD had acted lawfully in enfranchising properties sold to Annington Homes (owned by Guy Hands) in 1996. In a test case Annington Homes had challenged the enfranchisement arguing that the MoD was not entitled to enfranchise and also that there were public law grounds that meant the action was unlawful. The MoD succeeded on all grounds. Annington Homes were granted permission to appeal by the Court of Appeal on 11 October 2023.

Construction

After the closure of the government consultation on the new proposed draft professional conduct rules for Registered Building Control Approvers in February 2023, the results of the consultation have now been published. The new rules are expected to come into force in April 2024.

The deadline for the "Accountable Person" for any building classed as higher risk to register with the new Building Safety Regulator passed on 1 October 2023. Failure to register is a criminal offence.

Telecoms

The Court has handed down judgment in Vodafone Ltd v Potting Shed Bar & Gardens Ltd (formerly Gencomp (No 7) Ltd) & AP Wireless II UK Ltd.

This case had drawn attention to a gap in the drafting of the Code and concerns the procedure for renewal of agreements under the Electronic Communications Code in the context of a concurrent lease, but the Court has confirmed that tenants of concurrent leases can terminate Code agreements. Read all about the judgment here.

Sections 68 (Interim arrangements) and 69 (Use of alternative dispute resolution) of the Product Security and Telecommunications Infrastructure Act 2022 are due to come into force on 7 November 2023.

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