What's coming up in the property world in early 2022? Ros Monk, a Managing Associate in the Property Litigation Group, considers the key developments and decisions expected.
As predicted in our September edition, the much anticipated draft Commercial Rent Arrears (Coronavirus) Bill and revised Code of Practice have now been published. The Bill seeks to establish a legally binding arbitration process for commercial landlords and tenants in England and Wales that have not already reached agreement. It is expected to come into force in 2022 and will apply to commercial rent, service charge and insurance arrears, but only those that accrued in periods when businesses were legally required to close fully or in part (e.g. restaurants that remained open for takeaways).
The Bill is expected to be considered by the Public Bill Committee from 7-16 December 2021. If you want to express your views on the Bill to the Committee, you can do so here.
Joanna Lampert and Johnny Kelly set out the details of the Bill in their recent article here.
Continuing on the theme of rent arrears, the recent judgment on rent arrears in BNY Mellon v Cine UK will be considered by the Court of Appeal in February 2022. The Court of Appeal will consider the tenant's arguments in relation to the construction of the rent cesser clause in the lease, that there should be implied into the lease a rent cesser term and that there was a partial failure of consideration. Mishcon is instructed by the landlord in this case. Whilst the tenant in the other recent arrears decision, London Trocadero (2015) LLP v Picturehouse Cinemas Ltd, has permission to appeal, we wait to see if it proceeds with the appeal.
Finally, in the September edition we said that the review of commercial landlord and tenant legislation including the 1954 Act was expected to start shortly. Unsurprisingly that review has been delayed until 2022. We will provide further updates on this next year when more is known about the scope of the review and any proposed reforms.
The proposed White Paper on rental reform, which included proposals to abolish section 21 notices, was due to be published this year but has again been postponed until 2022.
We are waiting to hear what the Supreme Court decided in FirstPort Property Services ltd v Settlers Court RTM Company Ltd and others, which was heard on 10 and 11 November 2021. The question being considered in this case is whether a Right To Manage company in respect of a single building on a wider estate acquires just the right to manage that building or if it also acquires the right to manage the wider estate to the extent that leaseholders of the building enjoy rights over that wider area.
Another appeal to the Supreme Court in relation to residential property but which has wider significance is the case of Fearn and others v Board of Trustees of the Tate Gallery. The appeal was heard in the Supreme Court on 7 and 8 December 2021. As you may remember, this case concerns residents of a neighbouring block to the Tate Gallery complaining that the Gallery is committing a nuisance by operating a viewing gallery harming the amenity of the flats belonging to those residents. The issue at the crux of this appeal is whether a visual intrusion can be a nuisance: click here for more details.
The Government has published its conclusions on the responses to the consultation on the Telecoms Code. Unfortunately for landowners, the Government has no intention of revisiting the valuation frame work. The Government does intend to bring forward legislation to improve the Code provisions, including a new duty on operators to consider using alternative dispute resolution, with the courts taking into account any unreasonable refusal to engage in ADR when awarding costs, amending the Landlord and Tenant Act 1954 to align the procedures and a new procedure for operators to quickly obtain Code rights when a landlord fails to respond to repeated requests for access.
What property disputes do we expect to see in 2022?
We expect dilapidations claims will be on the rise, particularly those involving disputes where the remedial work includes some eco upgrading. We also expect more claims against guarantors will be made and potentially (depending on what happens with Covid variants) we would expect a marked increase in insolvencies when the various restrictions are lifted.