Draft Revised NPPF: Key Planning Changes

Written by Freeths on 14/03/2018

Following on from the Government’s Housing White Paper, “Fixing Our Broken Housing Market”, in February 2017, the Government has published its revised draft National Planning Policy Framework (NPPF). This was accompanied by various supporting documents including a supplementary draft Planning Practice Guidance (PPG) for viability, and a Housing Delivery Test ‘Draft Measurement Book’.

The draft NPPF includes consultation proposals which cover issues such as: housing delivery, plan making, green belt policy and the viability of planning applications. Consultation responses must be submitted by 10 May 2018.

To view our summary of the keys changes to the revised NPPF, which are relevant to land owners, developers, local authorities and others, click here.

To view the revised draft NPPF and PPG, along with the consultation, click here.
Izzy Tennyson H&S small 2017 (2)

Izzy Tennyson
Legal Assistant

Working like a Dog

Written by Freeths on 09/03/2018

It is Crufts week at the NEC Birmingham and I for one will be glued to the excellent TV coverage (happily, there will be more coverage this year than ever before). It is also Chinese Year of the Dog of course, so what better time to talk about pets and property!


First of all, residential landlords who have traditionally been loathe to allow tenants to have pets in their properties are thinking again. Private landlords have realised that because so few accept pets, they can charge a premium. Furthermore, being flexible means increasing the pool of potential tenants, and once let, tenants (and their precious pets) are likely to stay longer as there may be limited scope to move to another property where the landlord is less accommodating.

Private Rented Sector operators have also seen the light. Many offer pet-friendly options and report that over half of those who take that option do so despite the fact that they don’t currently have a pet – but aspire to own one in the future!

Landlords of commercial premises (particularly office buildings) are also getting on board. After all, dogs are great for reducing stress. A recent study reported positive results for employers who allowed employees to bring their pets to work in areas such as job satisfaction, commitment to work and stress reduction. It is certainly the case that when our Managing Partner brings his dachshund, Dylan (pictured above) to the office she always gets a great reception. Whilst we may briefly lose a little productivity we save a fortune on stress balls!

Of course, some landlords (and employers) have very good reasons for not allowing pets into their buildings (given concerns relating to hygiene and allergies etc). Those who are prepared to do so, should take care when preparing Leases and Tenancy Agreements to ensure that they retain the ability to exercise proper control for the benefit of other tenants in their buildings.

Something for those in the property business to chew on as we tune in to watch Clare Balding and her furry friends in the coming days.

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Hannah Greatbatch
Legal Assistant
Real Estate Group…

High Street Woe: Advice for Landlords

Written by Freeths on 06/03/2018

The news of Toys R Us and Maplin entering administration will not have come as a surprise to most retail experts. According to analysis by Deloitte, the number of retailers entering into administration in 2017 increased by 28% from 2016 figures. This increase certainly appears to indicate that companies are struggling within the sector and we shall have to see what 2018 brings.High Street Woe

The focus is often on the tenant company when it enters into administration, but what should landlords do? Here is a reminder of 5 key points for landlords:

1. The lease continues. The lease does not automatically come to an end when a tenant company enters into administration so if a landlord finds a new tenant it will need to take steps to end the lease before re-letting. An administrator has no right to disclaim a lease (unlike a liquidator) so the lease can only be determined if both parties agree or the landlord forfeits (see below for more on this). The administrator will be liable to pay the rent calculated on a daily basis whilst the business continues to occupy the property for the purposes of the administration. Once the administrator ceases to use the property for the purposes of the administration, his/her liability to pay the rent will end.

2. The landlord does not automatically become liable for business rates. Once the administrator has ceased to use the property for the purposes of the administration, he/she will often invite the landlord to agree to a surrender. A landlord should think very carefully about this before agreeing as whilst the lease remains in place (even if the administrator is not using the property for the purposes of the administration), the landlord will not have a liability for business rates. As such, a landlord would be well advised only to accept a surrender once it has a new occupier lined up, it intends to occupy itself or it is pursuing an alternative scheme for the property such as a redevelopment.

3. Check your guarantees. This is where guarantees can come in very handy both for the recovery of rent if the premises are not being used in the administration and/or to call upon a guarantor to take a new lease directly. Back in 2008 when Woolworths entered into administration, I acted for the landlord of Woolworths’ main distribution depot. The rent was significant, but the landlord was able to successfully pursue a guarantor for the outstanding rent and in the end that guarantor decided to take a new lease of the property.

4. Forfeiture is an option (although not a straightforward one). When a company enters administration, there is a moratorium against claims meaning that a landlord cannot take steps to forfeit a lease (even though most leases give a landlord the right to do so when its tenant enters administration) without the permission of the administrator or the leave of the court. An administrator is likely to consent where the company has ceased to use the property for the purposes of the administration, but may well not grant his/her consent where the property is still needed for the administration. Where no consent is given, a landlord needs to apply to court for its permission to forfeit. The court would carry out a balancing exercise of the interests of the landlord and the creditors of the company before determining whether to allow the landlord to forfeit.

5. Beware the phoenix from the flames. It is far from unusual for an administrator to sell part of the business to a phoenix company. When this happens, the phoenix company is often granted licence to occupy premises without the landlord’s consent to give it time to manage the transfer of the business to it and/or negotiate new occupational terms with the landlord. In the vast majority of cases, these licences will be granted in breach of the lease. If a landlord accepts rent from an administrator with knowledge of the licence, it may make it difficult to take action to require the administrator to revoke the licence in the future, so landlords should be careful before accepting monies in these circumstances.
Paul Tomkins
Paul Tomkins
Property Litigation …

MEES Regulations – The Winners and The Losers

Written by Freeths on 27/02/2018

The built environment is a major contributor to greenhouse gas emissions in the UK and the MEES Regulations are just part of the government’s approach to meeting its carbon reduction targets.

Under the Regulations, it will be unlawful for a landlord to grant, renew or extend a lease of privately rented property with an Energy Performance Certificate (EPC) rating of F or G (described in the Regulations as ‘sub-standard property’) from 1 April this year. From April 2020, the Regulations will also apply to existing lettings of residential property, with existing leases of commercial property affected from April 2023.Award, envelope, and the winner is

The Regulations may affect some more than others, so who are the winners and who are the losers?

1. Landlords

If you grant, renew or extend a lease of a sub-standard property, you may face enforcement action from your local authority. You will need to make improvements to such properties to ensure you do not receive penalty notices or find yourself with properties you cannot lawfully let.

If you own properties that are currently D or E rated, be aware that these could drop to F or G upon re-rating, as the threshold of EPC assessment may rise in the future (this point is particularly concerning for properties with EPCs which are nearing the end of their 10-year validity).

2. Tenants

As a tenant, you may be able to use the Regulations to improve your bargaining power in lease negotiations, as landlords may be keen to grant new leases prior to 1 April. However, the Regulations also apply to the grant of sub-leases, so you need to be aware of this if you’re thinking of granting a sub-lease of substandard property.

Landlords might try to shift the cost of complying with MEES onto you, either through service charge provisions or a dilapidations claim. Whether or not this is valid will depend upon the particular drafting of the lease. However, a sub-standard property will not necessarily be in ‘disrepair’, and tenants should not usually be compelled to carry out energy improvement works simply because the property has an F or G rating.

3. Investors

Investors should be alive to the impending application of the Regulations as they may lead to a reduction in value of property (on the basis that it cannot be lawfully let). If you haven’t already done so, you should review your portfolio to assess the potential impact of the Regulations and whether any exemptions will apply.

4. Developers

Developers may find that timescales for future development programmes are affected by the obligation to comply with the Regulations. However, opportunities may also exist for developers to acquire sub-standard property at a bargain rate.

With just over a month to go until the Regulations come into force, players across the real estate sector need to be aware of how they will be affected by them. If you are unsure as to how the Regulations will impact you, please get in contact with a member of our Real Estate team.
Mattie Green small
Mattie Green
Legal Assistant
Real Estate Group …

Turn down the noise!

Written by Freeths on 21/02/2018

UK Music recently reported that approximately 35% of music venues across the UK have closed in the last decade. One of the reasons is said to be frequent noise complaints by local residents. With the current demand for housing in the UK, apartments are often built close to existing, noise emitting businesses including music venues and nightclubs. Smaller venues, in particular, may struggle with the viability of significant noise attenuation measures.

What is the Law?Drum Set on Stage

Noise and/or vibration from premises can be a statutory nuisance under the Environmental Protection Act 1990.

A local authority has a statutory duty to inspect its area to detect statutory nuisances and to take reasonably practicable steps to investigate complaints. Where the local authority is satisfied that a statutory nuisance exists, or is likely to recur, it should serve an abatement notice. Failure to comply with the terms of an abatement notice is a criminal offence.

What can I do?

An abatement notice may set out specific steps required to abate the alleged nuisance, but more commonly it will simply say that the recipient must abate the nuisance, leaving him/her to determine what to do. Where the noise is from live music, options might include:

  • restricting operating hours;
  • retrofitting sound insulation;
  • reducing sound levels (particularly at lower bass frequencies).

The challenge, of course, is how you achieve this within financial and other practical constraints, without adversely affecting the ambience of the venue.

Can I appeal?

You can appeal against an abatement notice but you must act quickly: the period for issuing the appeal is very short. Grounds of appeal include:

  • the abatement notice is not justified (usually, on the basis that there is no statutory nuisance);
  • the requirements of the notice are unreasonable;
  • the business has used best practicable means (“BPM”) to prevent the nuisance. BPM is assessed on a case by case basis and steps that are considered practicable for one venue may not be for another. It is therefore crucial to evidence what has been achieved by any adopted noise control measures, as well as justifying any decision to reject other measures.

You cannot build a case of BPM overnight. As well as legal support, you will need the input of an expert acoustic consultant and perhaps a structural engineer where building constraints are an issue, all of which takes time.

Environmental solicitor Emma Tattersdill enjoys a strong track record of successfully appealing abatement notices and defending noise abatement prosecutions. Emma’s advice is to obtain legal support as soon as you receive any noise complaints, rather than waiting for an abatement notice or formal legal proceedings.

Emma Tattersdill H&S small
Emma Tattersdill
Planning & Environmental…

Investors and buy-to-let landlords take note…

Written by Freeths on 07/02/2018

Research carried out by Property Partner, an online property investment marketplace, has ranked Stoke-on-Trent as having the best combination of affordability and rental return for landlords.


The research took into account average property prices, rents and incomes in Britain’s 100 key towns and cities and Stoke came out on top. Predictably, the research saw a North-South divide, with the 10 most efficient areas to become a landlord being in the North.

The buy-to-let market came under strain last April, when tax changes meant that in certain circumstances buyers have to pay an extra 3% stamp duty land tax. However, landlords who are thinking of buying residential investment properties under £40,000 as renovation opportunities, will not be affected by additional SDLT as the price is below the SDLT threshold.

Even with these tax changes, it appears that many investors are still considering purchasing properties and it seems that now, more than ever, investors and buy-to-let landlords are considering opportunities in the Stoke-on-Trent area.

Stoke is home to an array of high profile worldwide pottery and ceramics manufacturers such as Portmeirion Group, Wade Ceramics and Valentine Clays Ltd to name but a few. Situated about halfway between Manchester and Birmingham, the city has excellent access to road infrastructure such as the M6 and the A50, and train journeys to both Manchester and Birmingham take less than an hour.

Stoke was named the UK’s European City of Sport for 2016 and recently reached the final of the City of Culture 2021, which was used as an opportunity to attract more investment into the city. The Council has pledged to invest around £52 million in the city’s cultural infrastructure, which should lead to some exciting changes in the near future. There are also a number of Enterprise Zone commercial sites available for letting or self-build in the city and so a higher level of investment is anticipated in the future.

Our Stoke real estate team can assist with all aspects of property work and has a particular expertise in property investment work. If you require any assistance, please contact Kate Hogg or Ian Wilson on 01782 202020.

If you would like any further information on the SDLT changes, click here for our previous blog.

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Kate Hogg
Real Estate Group…

Electronic Evolution or Landowners Revolution?

Written by Freeths on 29/01/2018

The new Electronic Communications Code came into force on 28 December 2017, with the aim of modernising out of date legislation and facilitating widespread connectivity. The “New Code” will govern all new telecoms agreements, whilst agreements entered into prior to 28 December 2017 will, in the most part, continue to be governed by the previous rules.
Gsm transmitter on a blooming field

The main reforms that landowners should be aware of are:

1. Rent:

Previously, consideration was paid to the landowner based on the value of the land to the operator. Under the New Code, consideration is based on the market value of the land disregarding the presence of telecommunications equipment, which could result in a significant decrease in the total amount payable.

2. Site Sharing/Alienation:

Any restrictions by the landowner in relation to upgrading and / or sharing apparatus, and assignment will be void under the New Code, which grants operators an automatic right to do so. Subsequently, landowners will no longer receive an additional “site fee” from an operator that shares the site. Furthermore, landowners will also lose control over who is occupying their property and face potential issues such as overloading.

A source of comfort for landowners may be found through the test contained in the New Code relating to the sharing of rights. This provides that any additional apparatus should not have “an adverse impact”, nor create an additional burden on the landowner. However, this could of course open the floodgates to potential disputes.

3. Security of Tenure:

Under the New Code, telecommunication leases will no longer have security of tenure under the Landlord and Tenant Act 1954. This will provide landowners with greater clarity and certainty, as the only security that an operator will now benefit from will be that contained in the New Code. As such, an operator may remain in occupation beyond their contractual expiry date until their lease is terminated in accordance with the relevant provisions in the New Code (which requires the landowner to satisfy one of four termination grounds).

4. Termination/Removal:

This is arguably the area of biggest change. Where previously, landowners were able to give operators 28 days’ notice to terminate their agreement, this period has now been extended to 18 months. However, this extended notice period does not deal with the removal of the apparatus, and landowners are required to serve a further notice specifying a “reasonable period” for such removal (which may also involve applications to Court). Therefore, careful consideration is required from landowners before agreeing terms with the operators, as a “quick fix” termination is no longer an available option.

The New Code aims to allow operators to more easily expand and improve their existing networks. The provisions are certainly operator friendly and good news for consumers, but landowners may be disappointed with the increased timescales mentioned above and the lack of financial benefits, which were previously available.

The New Code seems set to bring the rights of operators closer to those currently enjoyed by other utilities providers.

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Monika Holyst
Real Estate Group…

Dwelling on the student market

Written by Freeths on 22/01/2018

The student accommodation market will continue to be a key growth area in property investment for 2018. The strong countercyclical market even appears to be “Brexit proof” as the relatively weak Pound has attracted non-EU students into the UK.
3d rendering of furnished home apartment

However, the recent case of JLK Ltd v Ezekwe adds an air of caution for investors as it highlights the fact that lettings of residential accommodation are governed by a number of complex legal statutes regulating the responsibilities of both landlords and tenants. In the student lettings market, this is further complicated by the current trend to build ‘clusters’ or ‘pods’ (bed-sits with shared living spaces). These communal facilities are often maintained by the Landlord, and paid for by the long leaseholder of an individual unit through a service charge, as was the case in JLK Ltd v Ezekwe.

In the case, 56 tenants bought a claim in the First-tier Tribunal (“FT”) regarding the level of service charge demanded. The Upper Tribunal (“UT”) had to decide whether the FT was right to consider that it had jurisdiction to determine the amount of service charge payable. The FT would only have such jurisdiction if the units were “dwellings” as defined in the Landlord and Tenant Act 1985 (“the Act”). “Dwellings” are defined in the Act as “a building or part of a building occupied or intended to be occupied as a separate dwelling together with any yard, garden, outhouses and appurtenances belonging to it…”

The case therefore focussed on the following two main issues:

1. Did the definition of “dwelling” contained in the Act require the accommodation to be used as, or be intended to be used as someone’s home;

2. Were the units occupied or intended to be occupied as a “separate” dwelling given the availability of the shared living spaces?

The UT held that, while it was not necessary that the pods were occupied as a ‘home’, the lease of each unit together with a right to use the communal space meant that the dwelling was not occupied as a separate dwelling. As a result, the UT did not have jurisdiction to consider the applications under the LTA 1985.

The case highlights the complexities that exist in this area of the student accommodation market and the uncertain legal position created by the interpretation of the complex legislation governing it. Indeed, the reasoning in JLK Ltd v Ezekwe is open to criticism as there is no doubt that the word ‘dwelling’ can be interpreted differently in relation to other legislation in this area.

Where there are shared areas, investors should not assume that they will be able to challenge service charge demands if the need arises as statutory protections may not apply. Those investing in / purchasing units in such developments should therefore seek legal advice in relation to the applicable service charge provisions as early as possible.

Our blogs are only a summary of and / or commentary on the law in force at the present time and are not exhaustive, nor do they contain definitive advice. Specialist advice should be sought from a member of the Freeths Real Estate team in relation to any queries that may arise.

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Mattie Green
Legal Assistant
Real Estate Group…

The Service Charge Code – is change on its way?

Written by Freeths on 08/01/2018

Lease service charges can be a highly contentious issue for both landlords and tenants, with disputes often arising in relation to services to be provided, costs, maintenance contributions and budgets. In 2007, the Royal Institution of Chartered Surveyors (“RICS”) introduced the first edition of the Service Charge Code for commercial property (“the Code”) with the aim of promoting fairer management and administration of service charges to minimise conflicts and provide a mutual source of transparency and uniformity. The Code, although not mandatory, includes principles/requirements to ensure ‘best practice’, with the third (and current) edition introduced in 2014.

In October of last year, RICS launched a consultation on the draft fourth edition of the Code, which closed on 6 December 2017 in readiness for the proposed launch on 1 April 2018. This latest proposed edition goes beyond merely setting out what constitutes ‘best practice’ by introducing the following eight mandatory principles that must be followed by RICS surveyors. Whilst these principles are not presently drafted so as to be legally binding, they may well influence the drafting of service charge provisions in leases.

1. No more than 100% of the proper and actual costs of the provision or supply of services can be recovered from a tenant, unless the lease of the property provides an explicit right to the landlord to do so. 

2. Service charge budgets (with explanatory commentary) must be issued annually to all tenants.

3. A signed statement showing true and accurate records of actual expenditure must be provided annually to all tenants.

4. A service charge apportionment schedule for the property must be provided annually.

5. All expenditure sought to be recovered must be in accordance with the lease terms. 

6. Service charge monies (including reserve/sinking funds) must be held in a discrete or virtual bank account.

7. All interest earned on service charge accounts must be credited to the service charge account.

8. When acting for a tenant, RICS members must advise their clients that if a dispute exists any service charge payment withheld by the tenant should reflect only the actual sum in dispute.

As well as the proposed eight new mandatory principles, the draft Code provides additional guidance on service charge management and recommendations on reconciliation of service charges to provide greater transparency.

At present there is no corresponding legislation to create a legal obligation for service charge clauses to be drafted so as to be ‘Code – compliant’. However, the Code does recommend that existing service charge provisions are updated on a lease renewal following its introduction. The question then is whether the parties to a lease will want to go to the expense of updating the relevant clauses, given the sweeping nature of the proposed reforms.

The position will become clearer once the results of the consultation are published so for now….watch this space….

This document is for information purposes only and does not constitute legal advice. Please therefore speak to someone in our property team before acting on any of the information given.

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Monika Holyst
Real Estate…

*Season’s Greetings*

Written by Freeths on 22/12/2017

Our Real Estate team has the finish line in sight. Whilst we would say this (!) it does seem that Christmas creates a natural and increasingly loud crescendo for those in the Real Estate game. Whilst our lawyers are busy trying to get the last few transactions over the line, we’ve noticed a positive trend of clients wanting to discuss 2018′s transactions already. Perhaps more forward looking than we’ve known it in recent times. Brexit? What Brexit… (said firmly tongue in cheek)?

We hope 2017 has been a successful one for you and that the disappointments were few and far between. As we look towards the weekend and all the wonderful traditions it brings, some will no doubt already be thinking about what 2018 may hold.

But for now, we wish you, your family and friends a peaceful and restful Christmas.

Father Christmas really isn’t too far away…we hope.

Merry Christmas
From all in the Freeths’ Real Estate Team

Season's Greetings