Planning Permission: Drawing a line under Copyright Infringement

Written by Freeths on 24/04/2017

In a recent High Court case (Signature Realty Ltd v Fortis Development Ltd and Beaumont Morgan Developments Ltd) the court ruled that a property developer (Fortis) had infringed copyright in an architect’s drawings by using them without having commissioned the drawings and without having a licence to use them.

Background

The Claimant (Signature) identified a site in Sheffield city centre suitable for development into a block of flats for student accommodation and engaged architects, Corstorphine & Wright (“C & W”) to prepare drawings for the site. Signature obtained planning permission based on C & W’s drawings, but were unable to complete the purchase and development of the site. The site was subsequently sold to Fortis who developed the site in accordance with C & W’s plans.Architect Diagram

Although Fortis did engage their own architects, a condition of the planning consent required the development to be carried out exactly as illustrated in C & W’s drawings. The drawings were owned by C & W and were published on the Sheffield Planning Portal with a copyright notice limiting their use.

After Fortis purchased the site, C & W assigned the copyright in the drawings to Signature to enable them to bring a claim against Fortis for infringement of copyright. Signature claimed that copyright in the drawings had been infringed in a number of ways, including the construction and development of the site.

Judgment

The judge began by ruling that there are no statutory or intellectual property rights in a planning permission. The judge ruled that Fortis had infringed Signature’s copyright in the drawings on several grounds, including developing the building in accordance with the drawings. The judge made an order for an enquiry as to damages or an account of profits to be determined, but ruled against an order for additional damages. The level of award pursuant to such enquiry is still currently awaited.

Conclusion

This case is a warning to all developers of a potential issue which may arise when buying land which has already been granted planning permission. In order to avoid infringing copyright in an architect’s drawings it is essential to obtain a licence to use such drawings or obtain an appropriate assignment of copyright. If the appropriate licence or assignment cannot be obtained, then beware of potential copyright infringement…
James Woodcock 2015 H&S small (1)
James Woodcock
Trainee Solicitor
Real Estate Group

Let your Light Shine Through

Written by Freeths on 10/04/2017

In a recent Court of Appeal case (Ottercroft Limited v Scandia Care Ltd and Dr Mehrdad Rahimain) the Court unanimously upheld an injunction to prevent a minor interference with a right of light, forcing the developer (Scandia) to alter, replace or remove a metal staircase it had erected as part of development works.

Background:
In 2011 Scandia undertook redevelopment works to its property without first consulting with its neighbour, Ottercroft, and without complying with the Party Wall etc. Act 1996. Ottercroft corresponded with Scandia and requested various undertakings in connection with the redevelopment works along with working drawings, neither of which were provided. Light Pic

Ottercroft made an application to the court seeking declarations about a claimed right to light, an injunction preventing Scandia and Mr Rahimain (Scandia’s director) from interfering with that right and other relief. In response, Mr Rahimain provided undertakings on his behalf and on behalf of Scandia which included an undertaking not to interfere with Ottercroft’s right to light.

Despite giving the undertakings, the redevelopment works continued and Scandia constructed a metal staircase which infringed Ottercroft’s right to light. At first instance the court ordered Scandia and Mr Rahimain to alter, replace or remove the staircase so that it ceased to interfere with Ottercroft’s right to light, even though the court accepted that the interference was only minor.

Scandia and Mr Rahimain appealed against the decision. The Court of Appeal unanimously upheld the decision to grant injunctive relief for the staircase to be taken down.

Lessons to be learnt:

1) After the recent decision of the Supreme Court in Coventry v Lawrence, many expected that it would be more difficult to persuade a court to grant injunctive relief to prevent interference with rights of light and that monetary damages would be more readily awarded. The decision in the Ottercroft case means that this may not necessarily be so.

2) The conduct of the Defendants (which was described as being ‘high handed’ and ‘oppressive’) appears to have played a significant role in the decision of the court to grant injunctive relief, even though the court accepted that the interference with Ottercroft’s right to light was ‘minor’. It would therefore be prudent to consult with any adjoining landowners whose rights of light may be affected by any proposed developments rather than ploughing ahead and worrying about the consequences later.

This is a complex area of law and if you are planning to undertake development works which affect light to adjoining properties, you should seek specialist advice before commencing works so that your plans can go ahead come rain or shine…

Beth Jenkins H&S small
Beth Jenkins
Solicitor
Property Litigation Group…

Do actions speak louder than words?

Written by Freeths on 03/04/2017

Guardian schemes are an increasingly popular way for property owners to protect vacant premises against squatters and vandalism. Management companies arrange for individuals to live in such properties as licensees. However, the recent case of Camelot Property Management Limited and Camelot Guardian Management Limited v Roynon [2017] is a reminder that when it comes to determining the basis of someone’s occupation of property, the situation ‘on the ground’ is just as important as what the agreement between the parties actually says.

BackgroundGuard2

Bristol City Council own a disused former care home. They engaged the services of Camelot Property Management Limited, who placed ‘guardians’ in the property in order to secure it. One such guardian, Mr Roynon, occupied two specific rooms to which only he had access. He also had use of other facilities such as a communal kitchen and bathroom. Mr Roynon entered into a written agreement in January 2014 which stated that it created a licence and not a tenancy. However, when the management company served notice to quit upon Mr Roynon in May 2016, he refused to leave the property.

Law

When determining whether an agreement is a tenancy or a licence, a Court will look beyond whatever label the parties have put on a document and take into account the reality of the occupation. As outlined in last week’s Practical Property Guide blog, a tenancy grants “exclusive possession” of a property for a specified period of time (being a right to use a property to the exclusion of others), whilst a licence is simply a permission to do something on someone else’s property.

Decision

The Court found that the provisions of the agreement did not reflect the reality of Mr Roynon’s occupation ‘on the ground’. Whilst the agreement provided that the guardians would not be given designated rooms, Mr Roynon had exclusive possession of two rooms to which the other guardians at the property did not have access and would not enter without his permission.

The agreement also prohibited overnight guests, limited the number of guests to two at any one time (and provided that they must not be left unsupervised) and stated that any guests must be escorted off the property at the end of each visit. The Court felt that whilst these restrictions were onerous, they only restricted the way in which Mr Roynon could use his rooms. Such restrictions are a common feature of tenancies and so do not by themselves prevent exclusive possession. The absence of any power to move Mr Roynon between rooms as and when the Council required, was considered to be a significant factor in indicating that there was a tenancy and not a licence. The Court found that these specific facts were sufficient to give Mr Roynon exclusive possession and that he had an Assured Shorthold Tenancy.

Consequences

This case is a reminder that it is not simply enough to label a document a licence if the reality of the situation is something different. The consequences for failing to recognise when an agreement is a tenancy can result in a landlord having to terminate such agreement in accordance with the relevant statutory procedures.

Guardian providers may need to embrace the likelihood that their existing arrangements constitute ASTs and adapt their procedures accordingly. Landowners should be sure that documents are carefully drafted and arrangements put into place to ensure that any attempts to keep trespassers out do not result in letting unwanted tenants in.

So don’t be caught off guard by letting your guard down…


Ben Gant
Solicitor
Real Estate Group…

Practical Property Guide 2017: Navigating the road to recovery (of possession)

Written by Freeths on 27/03/2017

In the final instalment of our Practical Property Guide series, we look at the difficulties that can arise where an owner of commercial property allows someone into occupation of their property, without documenting such occupation adequately.Curved asphalt road

This is a common occurrence in practice and often happens when:

  • a landlord does not want to incur the time and cost of negotiating a new lease; or
  • an occupier is allowed into a property before the terms of the proposed occupation have been finalised; or
  • the parties have not considered the actual nature of occupation.

Whatever the reason, this can cause issues for both parties, particularly when a landlord wishes to recover possession of a property.

What legal interest has been created?

The most common interests that can arise are:

  • A licence to occupy. This does not create an ‘estate in land’ and the occupier does not enjoy exclusive possession. This merely creates a personal right which can be revoked by the Landlord and the occupation brought to an end.
  • A tenancy at will. This does grant exclusive possession to the occupier and can be revoked by either party at any time. Tenancies at will are often used where a person is allowed into occupation of a property whilst a new lease is being negotiated (or where a person remains in occupation at the end of a lease, again whilst a new agreement is negotiated).
  • A periodic tenancy. This can be created by express agreement and can also arise by implication where there is deemed to be a landlord and tenant relationship due to the fact the tenant has exclusive possession and is paying rent. The period of the tenancy is based on how often the rent is paid (if the rent is paid weekly there will be a weekly periodic tenancy and if paid monthly there will be a monthly periodic tenancy etc).

Unlike with a licence or a tenancy at will, a landlord cannot simply terminate a periodic tenancy and obtain vacant possession. It must serve a notice which must be at least equal to the period of the tenancy and expire at the end of the relevant period (i.e. with a monthly periodic tenancy, the landlord must give one month’s notice expiring on the last day of the period).

However, with a periodic tenancy it is not possible to contract out of the security of tenure provisions of the Landlord and Tenant Act 1954 (“the Act”) and so if a property is occupied for business purposes, the occupier will automatically gain the protection of the Act after 6 months of occupation. This means the landlord is faced with a secure business tenancy. It can therefore be very difficult for a landlord to obtain vacant possession where a periodic tenant does not want to leave a property.

Which document to use?

The absence of the correct documentation can lead to unintended relationships being created. Where the parties intend occupation to be brief (under 6 months) the best course of action is to enter into either a licence to occupy or a tenancy at will, as both can be brought to an end immediately. Where occupation is to be for a longer period then a lease that has been contracted out of the Act should be entered into at the outset. This would allow the landlord to have control over the way in which the property is used and the date on which it is to be returned.

In particular, if an owner does not want an occupier to obtain security of tenure under the Act, it should ensure that the occupier occupies by way of a licence, a tenancy at will or a ‘contracted out’ lease.

And if in doubt, document, document, document!
Claire Lees H&S (1)small
Claire Lees
Trainee Legal Executive
Real Estate Group…

“They’re back…” Is possession really 9/10′s of the Law?

Written by Freeths on 22/03/2017

As a property litigator, when you get a message from a client you are not expecting to hear from asking you to call urgently at 7.30am on a Friday morning, you know that your day is not going to go the way you thought it was.  “They’re back” was the message.
IMG_2442
Our client had bought a 3.5ha site for development and in May last year, before putting a spade in the ground, a number of trespassers got onto the land and began fly tipping waste on it. It appeared that these individuals were collecting rubbish from people for a price and then dumping it on our client’s site. Our client asked the Police to get involved but they declined to do so.

We urgently commenced Court proceedings seeking an order for possession in the County Court.  By the time the order was granted and the trespassers left, they had dumped over 1000 tonnes of rubbish on the site which cost the client circa £150,000 to clear.  The photos show the state the trespassers left the site in.IMG_2440

Fast forward to last Friday morning.  When our client told me “they’re back“, this of course referred to the return of the trespassers to the site.  Our client had previously secured the site with locked gates and erected concrete blocks to prevent access but the trespassers simply cut through the locks and broke through the concrete blockade and had begun dumping waste on the site.  Once again, the Police declined to act and directed our client to obtaining an order for possession in Court.

In view of the urgency of the situation, we decided to make an application for permission to issue a claim for possession in the High Court and shorten the time for the service of the claim. We wrote a letter advising the trespassers of what we were doing and asked them to attend the High Court in London at 2pm that afternoon.  We then quickly prepared all the paperwork and arranged for Counsel to go to Court.  Whilst the Judge took some persuading, he agreed that in view of the history of fly tipping and the potential for further damage to the site, it was appropriate for the claim to be issued in the High Court and for the time for service to be shortened. A key factor in this was that the trespassers had been given notice of our application. The Judge ordered that the trespassers give up possession immediately, that the claim documents be served at the same time as the order for possession and issued a writ authorising High Court Enforcement Officers to remove the trespassers from the site.

By 7pm on Friday evening, all of the trespassers had been removed and the site made secure. All in all, a fantastic turnaround for our client given the potential nightmare of having the trespassers on site dumping waste whilst the matter made its way through the County Court system.

So what lessons can be learnt from this?

1.  The vast majority of trespass cases still must be issued in the County Court.  This process can take a number of weeks for a trespass order to be granted and in the intervening period, the trespassers can cause extensive damage to the property they occupy without any real recourse for the owners on the basis the trespassers are “Persons Unknown“.  The Police rarely get involved leaving the site owner with potentially huge clean-up costs whilst the trespassers walk away scot- free. The law desperately needs reforming so that the cards are not stacked so much in the trespassers’ favour.

2.  The High Court issued a guidance note in September 2016 as to the types of trespass cases it considers would be appropriate for issue in the High Court.  One of the specific circumstances referred to is fly tipping of waste so if you can prove there is a real danger of extensive fly tipping by trespassers, it may well be possible to issue in the High Court. However, the Court will need persuading the matter is sufficiently serious to merit issue in the High Court.

3.  By moving quickly great results can be achieved.  Here this was possible due a collective team effort between our client, the High Court Enforcement Officers (Constant & Co), Counsel (Jamal Demachkie of Harwicke Chambers) and ourselves.
Paul Tomkins
Paul Tomkins
Partner
Property Litigation…

Hope Living

Written by Freeths on 21/03/2017

On Friday I attended the launch of Hope Living, and assisted with a presentation by Phil Woolas and Jason Highet at the Conservative Party Spring Conference at the SSE Swalec stadium, Cardiff.Hope Living

‘Hope’ is an initiative to relieve ‘bed-blocking’ by making available accommodation on a long term basis to Local Authorities and Clinical Commissioning Groups (CCGs) at a rental linked to Local Housing Allowance (LHA) rates, the rent for which is met by Housing Benefit. The way in which the private funding is made available makes it possible for £15,000 to be applied to refurbish each unit of accommodation. Tenants are nominated by the Authority, who are then granted an assured shorthold tenancy.

The Mirror online reported on this over the weekend but please also see Hope Living’s website for further information on the initiative.
Matthew Grocock
Matthew Grocock
Partner
Real Estate Group…

EPC Ratings: as easy as A B C?

Written by Freeths on 20/03/2017

We’re taking a brief hiatus from our Practical Property Guide, with the final instalment returning next week. In the meantime, the Department for Business, Energy and Industrial Strategy (BEIS) have recently published their long awaited guidance on the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (SI 2015/962) (MEES Regulations) and its application to non-domestic privately-rented property.

The MEES Regulations set a minimum level of energy efficiency for privately rented property, being an energy performance certificate (EPC) rating of at least ‘E’. Where a property has an EPC rating of ‘F’ or ‘G’ the MEES Regulations mean that:ABC - Small

a)    from 1 April 2018, landlords are restricted from granting new leases or renewing / extending existing leases; and
b)    from 1 April 2023, landlords cannot continue to let the property;

without carrying out works to improve the energy performance of the property to raise its rating to at least an ‘E’ rating or alternatively, registering an exemption (where one applies).

When do the Regulations apply?

The MEES Regulations apply to all non-domestic properties in England and Wales which are legally required to have an energy performance certificate and are let under any type of ‘tenancy’. The Regulations also state that the provisions will not apply to a tenancy which is:

a)    granted for a term not exceeding 6 months (except where the tenancy contains provision for extension or renewal beyond 6 months or where the tenant has been in occupation for a period of more than 12 months); or
b)    granted for a term of 99 years or more.

It is worth noting that as the Regulations only apply to properties which are let under a ‘tenancy’, lettings of sub-standard properties under a licence or agreement for lease arrangement are unlikely to be caught by the provisions.

Recap: When is an EPC required?

Ordinarily, the owner or landlord on the sale, letting or construction of a property is required to make an EPC available to the prospective buyer or tenant.

An EPC may not be required in a number of circumstances, such as temporary buildings, buildings used as places of worship, buildings due to be demolished and protected / listed buildings.

BEIS have provided clarification in respect of the exception relating to listed buildings, confirming that although some listed buildings may be exempt from the requirement to provide an EPC, this is not automatic. An EPC will not be required only in so far as compliance with energy performance requirements would unacceptably alter its character or appearance.

Exemptions

In limited circumstances, an exemption may apply to the prohibition on letting a sub-standard property. The landlord will need to provide details and evidence of the exemption to a centralised self-certification register (the PRS Exemptions Register).

Some exemptions that may apply include where the energy efficiency measures would reduce the market value of the property by more than five percent, or where consent is legally required to undertake the improvement works (i.e. from a lender, planning authority or superior landlord) but that consent is not forthcoming.

The exemptions will usually only apply on a five year temporarily basis and it must be noted that any exemptions claimed by a landlord will not pass to a new owner or landlord upon sale, or transfer of the property. Any new owner must either carry out the improvement works to bring the property up to the minimum standard or, if they intend to continue to let a ‘sub-standard’ property, must register an exemption where one applies.

A date for the diary!

With just over a year to go until the first wave of minimum energy efficiency regulations come into force, commercial landlords should at least bear in mind the current EPC rating of their properties, particularly where any might fall foul of the minimum requirements.

An enforcement authority may impose financial penalties of up to £5,000, or 10% of the rateable value of the property whichever is greater (to a maximum of £50,000) where the landlord has been in breach for less than three months. Where the landlord has been in breach for three months or more, penalties increase to £10,000 or 20% of the rateable value (to a maximum of £150,000).

So if you’re a Landlord make sure you learn your ABC’s of EPC ratings…
Thomas Goodwin
Tom Goodwin
Legal Assistant
Real Estate Group…

Save the Date: Business Rates – Have you overpaid?

Written by Freeths on 17/03/2017

In October 2015 we considered the implications of a Court of Appeal case on business rates for buildings that were vacant and undergoing extensive refurbishment in our blog, Testing the Case for Business Rates. The appellant argued that the rateable value should be nominal because the relevant property could not be occupied. However, the Court of Appeal decided that a vacant property will not automatically be listed with a nominal rateable value. calendar, date, month, year, diary

The decision was reversed by the Supreme Court who adopted what many consider to be a ‘common sense’ approach. The Supreme Court held that buildings undergoing significant construction works (for example, a refurbishment or development to another use) will not be liable for business rates whilst such works are ongoing.

This unanimous ruling will be welcome news for developers as business rates add significant costs to development projects. The Supreme Court decision also means that developers who have been paying business rates during significant construction works may be able to recoup money already paid. Developers will need to act fast as the deadline to submit an application to claim a refund is 31 March 2017.

If you need further advice then please get in touch. Otherwise, get your skates on to make a claim…

Hannah Westcott 2015 H&S small (2)
Hannah Westcott
Legal Assistant
Real Estate Group…

Practical Property Guide 2017: Don’t Bury Your Head(s) in the Sand

Written by Freeths on 13/03/2017

In the latest Practical Property Guide 2017 instalment, we are considering the benefit of ‘good’ Heads of Terms.

Land agents or the parties themselves often produce the draft Heads of Terms for a deal, which in many cases follow a standard template or precedent that someone has seen or used before. However, as lawyers, we sometimes get asked to input on (or approve) aspects of the Heads of Terms. Unsurprisingly this tends to happen on more complex transactions.

CaptureWhen preparing or evaluating Heads of Terms, it’s important to ask yourself “what’s missing?” Most experienced land agents will identify key areas which a ‘standard’ set of Heads of Terms doesn’t address. Some of these gaps can then be covered by lawyers and other real estate advisors who may have certain knowledge of a property or the client itself. This can help to prevent any nasty surprises further down the line.

One of the main reasons that we find transactions do not proceed, is because one party learns something during due diligence or the negotiation of the legal documents which either it didn’t expect or doesn’t like. Most of the time, solutions can be found (and / or ‘views taken’) - but that’s not always possible. Heads of Terms should therefore be as accurate as possible in framing the deal that the parties have agreed. Spending a little bit more time on Heads ‘up-front’ can prevent costly and time-consuming negotiations during the legal process. Of course, it’s a balance. You don’t want to negotiate the deal in its entirety in a set of Heads, but does one page with some address and contact details tell both parties all they need to know?

The following aide memoire may assist when drafting and agreeing Heads of Terms:

H – honest and candid detail of the transaction;
E – exclude information at your peril;
A – accurate terms help minimise negotiation and (potentially) conflict later on;
D – devil is in the detail (don’t leave all the flesh to be put on the bones later on);
S – stop and think; is the deal properly captured and is it right?

O – ok, you get the message….

There is no one size fits all with Heads of Terms. Each deal is different and each party has its own priorities and aspirations. The key is not to treat them as just a signpost that the deal is going in the right direction. When done properly, they help all involved ultimately get to the end goal quicker and more cost-effectively.

So focus on the detail and on what’s important – and don’t bury your Heads in the sand!!
James Clamp 2015 H&S large (3)
James Clamp
Senior Associate
Real Estate Group…

French Toast

Written by Freeths on 09/03/2017

Yes it’s here again. MIPIM. Is it really a year since the rain sheeted down and the price on the cocktail stick brollies from the street sellers trebled in 10 minutes?!
French Toast
Freeths are out there as usual and are flying out with Marketing Birmingham on Tuesday and back on Friday.  The UK looks pretty well represented with combined display areas and presentations. I’m predicting a busy and bustling one. Our diaries are as full as ever and a lot of people seem to be positive about it despite the Brexit backdrop.

Here’s to the sun staying bright and a bit of a flashback from last year with this photograph.

I hope to see you all there…
Darren Williamson H&S large
Darren Williamson
Head of Real Estate…