Practical Property Guide 2017: Mind the Gap

Written by Freeths on 20/02/2017

It’s easy to think that once you have completed a transfer of land, all legal rights in the property have been obtained and the matter is concluded. However, people often forget that legal interest in property is not transferred until the documents have been registered at Land Registry. This is equally true of any interest or ‘disposition’ of land such as leases, mortgages, easements and so on.

The ‘registration gap’ is the time period between completion of a matter (i.e. the dating of a transfer or lease etc) and the registration of the transaction at Land Registry. The considerable backlog of applications at Land Registry (with the more complicated transactions taking several months to register) has meant that the ‘gap’ is ever widening.

Silhouette of young man jumping over a cliff

Issues often arise, particularly in leasehold transactions, on the serving of notices. Notices must be served by legal owners of land (meaning that they must be registered as the legal proprietor) which leaves uncertainty about who should serve notices in the time between completion and registration. A recent case highlighted this issue: a buyer of agricultural land, which was subject to a lease, completed a purchase and then served a notice to quit on the tenant. The notice was served after completion of the transfer but before the buyer had been registered as the proprietor of the land. This meant that the notice was served by the wrong person (as the buyer was not the legal owner at the time) and the court held that the notice to quit was invalid.

Similarly, a bank’s mortgage is not perfected until such time as it is registered at the Land Registry. In the interim, the bank’s position is one of weakened (equitable) security.

Much of this area is out of the hands of lawyers and down to the speed of the Land Registry. However, there are practical tips for all parties in managing the situation – such as the following:

1. For solicitors it is important to lodge applications to register transactions as soon as possible and try to anticipate any requisitions that might be raised by Land Registry.

2. If buyers envisage that they may have to serve notices straight after completion then they should make their solicitor aware at the outset so that additional provisions can be added to the sale contract. For example, provisions could be added that enable the buyer to serve notices during the registration gap as the seller’s agent or requiring the seller to serve notices itself.

3. Sellers and landlords should be aware that they will remain liable as the legal owner until the transfer/lease is registered. By way of protection an indemnity in the transfer/lease or a contractual right to join the buyer/tenant in any action may be added.

4. Lenders can be protected by ensuring that they have adequate priority (by way of Land Registry priority applications) over any subsequent transactions of the land.

Given the current system of land registration, a period of time between completion of a real estate transaction and registration is unavoidable, but there are ways to minimise problems. We will explore this topic in greater detail with a further blog later on in the year but in the meantime be sure to ‘mind the gap’…
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Hannah Westcott
Legal Assistant
Real Estate Group

Practical Property Guide 2017: Instructing a Lawyer

Written by Freeths on 13/02/2017

In the latest Practical Property Guide 2017 instalment, we are contemplating some of the key considerations when instructing a lawyer on a real estate transaction.

Like any professional relationship, the choice of lawyer has to fit you, fit the transaction and fit your budget. Cost can too often be the sole motivation for instructing (or not instructing) a particular firm or individual, but the bitterness of poor service remains long after the sweetness of low price has been forgotten.

Whilst picking a lawyer is daunting, here are a few of the key things to be aware of:

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  • As we live in a digital age (and more on that in our series later in the year), connectivity with your lawyer has never been easier or more immediate. Ensure you notify your lawyer of your preferred method of communication. Whether you prefer email, or hard-copy correspondence, make sure your lawyer is happy (and able) to communicate accordingly.
  • Fees. Fees. Fees. Law is increasingly becoming a commodity and prices are becoming more competitive. But cheap is not always best. Make sure the fee quote covers all the work needed. Agree with your lawyer whether the fee quote is an estimate or whether it is a fixed fee. If an estimate, what is the hourly rate? Check that the scope of work and assumptions relate to your specific deal/heads of terms and if it looks too good to be true, it probably is!
  • If the transaction involves a bank or funder to which the lawyer is reporting, they need to be on the bank’s approved panel. If not, you may end up having to instruct a different lawyer approved by the bank. Check this upfront to avoid wasted time and cost in having to swap horses halfway through the race.
  • Expertise is key: ask your lawyer whether they have acted on similar deals. Spotting potential issues and knowing the best route through the transaction is priceless, as is knowing what is not important.  Make sure your lawyer ‘knows their eggs’. A firm’s (or individual’s) standards, awards and accreditations help to evidence this.
  • Recommendations can speak volumes, so ask around. Do fellow real estate practitioners, agents and professionals speak highly of that firm and/or individuals within that firm? Be wary of closed-networks - whilst recommendations are key, make sure these are based on professional expertise and experience and not tied-referral arrangements.
  • Trust is important in any relationship, be it professional or personal. It is key that you have trust in your advisers. If you don’t have that trust, or your lawyer is ambivalent as to whether he or she needs to earn that trust, think carefully before proceeding.

The above is not intended to be an exhaustive list, but hopefully provides some useful points to note when appointing a lawyer.

In our next instalment, we will be considering some of the issues surrounding the registration of property at the Land Registry following the completion of a transaction.



Thomas Golding
Real Estate Group…

Practical Property Guide 2017: Out of Office

Written by Freeths on 06/02/2017

Despite the obvious attraction of providing an excuse to leave the confines of the office for a few hours, physical site inspections by real estate practitioners are often underutilised on property transactions.

Their importance is not something that should be overlooked and they should be seen as a central part of the due diligence process (especially on acquisitions of land for future development).Blog Image

Whilst the use of satellite imagery is now commonplace and can provide a lawyer, surveyor or investor with a quick overview of a site, the images available are likely to be out-of-date and will not always contain enough detail to reveal potential issues. On development sites especially, this may result in the satellite images being radically different to the current picture on the ground.

Not every issue will come to light just from studying title plans, replies to enquiries and satellite imagery. For example, the following matters may only be discoverable from a physical inspection:

  • Third party rights – are there any signs of a private right of way?
  • Access issues – does the property have the benefit of a right of way over third party land? Does it abut the public highway?
  • Boundary discrepancies – does the physical boundary accord with the legal boundary?
  • Environmental issues – are there any signs of potential contamination?
  • Third party occupation – is anyone in occupation of the property?
  • Security concerns – is the site properly secured or could squatters get in (see last week’s blog “Get Off My Land!” by clicking here)?

A physical site inspection will increase the likelihood of these issues being uncovered during the due diligence process.

As developers are increasingly required to act fast in order to secure potential development sites, there is a temptation to consider physical site inspections by lawyers and others to be a waste of time and money. However, were one of these issues to be identified by such an inspection, it would be time and money well spent!

Next time you’re looking to acquire a site, consider picking up the telephone and asking your lawyer to have a look around with you.

Sean Hallam
Real Estate Group…

Practical Property Guide 2017: Get Off My Land!

Written by Freeths on 27/01/2017

Squatting in residential premises has been a criminal offence since 2012, when legislation was enacted following a public consultation which looked at ways of better protecting homeowners. However, the offence does not extend to commercial premises.

At the time, the British Property Federation warned that squatters may seek to exploit this gap in the legislation and it increasingly looks as though they were right to be concerned.

What are the risks?


Very often, vacant commercial buildings are in a dilapidated state and could pose a danger to someone who enters them. This means that in addition to the presence of squatters hindering the proposed development or thwarting the potential sale or letting of a property, owners may also owe a duty of care to such squatters if all of the following conditions are met:

1. the owner is aware of a danger at the property or has reasonable grounds to believe that it exists;

2. the owner knows or has reasonable grounds to believe that the trespasser is in the vicinity of such danger; and

3. the risk is one against which (in all the circumstances) the owner may reasonably be expected to offer some protection.

It is therefore important for owners to take preventive measures such as properly securing their property and erecting warning signs to ensure that potential squatters are aware that they are entering a building that may be unsafe. However, squatters will inevitably adopt a covert approach and even if such steps are taken, it can be very difficult to for owners to sufficiently protect their properties.

So what can be done?

Owners who decide to take matters into their own hands risk committing one or more offences themselves. They could therefore turn to the Police, who have quite wide powers to direct trespassers to vacate a property (notwithstanding the fact that squatting in commercial premises is not a criminal offence). However, in reality most forces do not have the resources or the inclination to get involved in what they perceive to be a civil dispute.

Instructing private bailiffs can be an effective way of dealing with trespassers. However, landowners should seek legal advice before instructing bailiffs so that a careful assessment can be made as to whether it is legal and / or suitable in any given situation. Moreover, if they use force which is beyond ‘reasonable’ then the owner could be responsible for their actions. Many therefore decide that the best course of action is to make an application to Court for a possession order.

There are specific rules to adhere to as regards service of the proceedings and the periods of notice that must be given to trespassers prior to a court hearing, but if the procedure is followed accurately an order can often be obtained within 2 weeks of proceedings being issued. If the trespassers fail to peacefully vacate after the presentation of the possession order, owners can then enlist county court bailiffs or high court enforcement officers to enforce their removal.

The eviction of squatters can be a stressful process, with many trespassers being au fait with the relevant law and the associated procedures. Prompt and efficient action is therefore recommended to protect the investment value of property and to limit any damage that may be caused to it. However, prevention is of course better than cure and owners should try to make their properties as ‘squatter-proof’ as possible by erecting barriers, fences and locked gates as appropriate.

Should you require any advice in relation to the removal of any unauthorised occupiers, please contact me or a member of our Property Litigation team for expert advice before taking action.

Ben Gant
Real Estate Group…

Resolutions Holding Firm?….

Written by Freeths on 20/01/2017

Runners, feet, jogging, marathon, sports, running fc colours, red, yellowAs January hurtles by, I wonder how many of those New Year’s resolutions have we all managed to stick to? On a personal level, I am still managing to pull on my trainers most days. However, my wife keeps telling me that drinking Sauvignon Blanc isn’t what is meant by a ‘dry’ January…

Whilst some of my personal goals may already have fallen by the wayside, we at the Real Estate Blog Editorial Team are holding firm in our commitment to post more frequently and with more relevant and helpful knowhow. How will we do this? Well, apparently psychologists have found that people are more likely to succeed if they adhere to the following three steps:

1. Break the resolution down into smaller goals that are specific, measurable and time-based.
2. Tell people about your goals (as you’re more likely to want to succeed).
3. Give yourself a small reward whenever you achieve a sub-goal.

So….as mentioned in our recent post “New Year, New Beginnings”, next week will mark the start of a new series of blogs (which will be presented on our new-look blog platform) focussing on tips and pointers for busy Real Estate professionals. Our “Practical Property Guide 2017” will cover issues which are not necessarily ‘black letter law’, but which we hope you will find relevant, useful and interesting. Our weekly posts will cover areas as diverse as the importance of site visits, the risks of undocumented occupation, the valid service of notices and the use (and importance) of title indemnity insurance.

That deals with points one and two…as for three, well there’s no such thing as a dry March is there?

Ben Gant
Real Estate…

New Year – New Village?

Written by Freeths on 17/01/2017

In an exciting expansion of the existing garden towns programme, the locations of 14 new garden villages (including sites in East Northants, North Cheshire, and Lincolnshire) have been announced by the Government which could deliver more than 48,000 new homes across England. The new garden villages will have access to a £6 million fund over the next 2 financial years to support their development and delivery. In addition to this funding, the Government will provide additional support and offer new planning freedoms.
Garden Village
Due to the high levels of expressions of interest received an additional £1 million has been made available in 2017 for the further development of other garden village proposals.

On 2 January 2017 the Government also announced its support for 3 new garden towns in Aylesbury, Taunton and Harlow & Gilston in addition to the 7 garden towns which had previously been announced.

Gavin Barwell, the Housing and Planning Minister claims that “locally-led garden towns and villages have enormous potential to deliver the homes that communities need”.

The Government may also run a further call for expressions of interest in 2017 for other proposed locations for new garden villages.

Shaun Spiers, Chief Executive of the Campaign to Protect Rural England (CPRE) has stated that “done well with genuine local consent, garden villages and towns can be part of the solution” but “CPRE will look closely at these specific proposals to ensure they really are locally led”.

With the demand for new homes far exceeding supply, it will be interesting to see where other new garden villages and towns may begin to ‘sprout’.
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Catherine Sharpe
Real Estate Group…

New Year, New Beginnings

Written by Freeths on 05/01/2017

It’s that time again. Christmas is becoming a distant memory as we all embark on the journey that will be 2017. New goals? Invigorated strategies? Best intentions!

For most of us, 2016 was a year of infamy. And best left behind. Even in its final throes, 2016 was dishing out celebrity deaths, war and conflict and other un-pleasantries.

2017 has much in store for us. It is only a matter of days now until President-Elect Trump takes office. And closer to home, predictions remain around a slowdown in the UK economy as the true effects of Brexit are felt. Let’s not forget that Brexit means Brexit! And presumably it’s only a matter of time before Andy Murray loses his world Number One status…

Happy New YearBut here at Freeths it’s not all doom and gloom. Far from it. We are as busy as ever, and looking forward to another successful year.

Just like any good film franchise, we are rebooting the Real Estate blog in 2017. With improved content and interactivity, we will be posting more frequently and with more relevant and helpful knowhow.

To kick things off for the new year, Ben Gant (who has joined the editorial team for 2017) will introduce a series of 8 weekly posts focusing on tips and pointers for busy Real Estate professionals and practitioners. But more from Ben on that shortly.

For now, we wish you a happy and prosperous new year. And here’s to what promises to be an interesting 2017 for us all!

The Editorial Team…

Wrapping things up for Christmas…

Written by Freeths on 21/12/2016

What do you ask Santa for this Christmas? Cars, they’re the ideal present for me, just love them and always have. Not any that I can afford or look appropriate in, just the barmy ones that are noisy and fun, or so I thought…
On the topic of ‘barmy’, it’s not a bad phrase to sum up 2016. An “out” EU Referendum and tumbleweed throughout the summer; a (thank god) short lived run on retail funds; a change of face in the top job here and across the pond; a slight thaw on the austerity agenda; a kick on the SDLT front; most supermarkets doing deals again; a housing and exchange rate ‘crisis’; and don’t get me onto business rates (having just moved our business into a premises in Mayfair last year). Barmy. Still, that against a background of some more positive notes: HS2 becoming more of a reality; massive moves into Birmingham by HSBC and the HS2 College; expanding British brands like JLR, Bentley and Rolls Royce; Wells Fargo and Apple showing confidence in London by taking more space (and when passporting continues to be on the agenda); the further rise of sheds and internet retail, multimodal and tech; and, perhaps, not as disastrous a financial year as most anticipated back in May.

Tech continues to be one of the main disrupters. Apps and machines fulfilling traditional roles, not confined to any one part of the real estate sector but affecting legal as well as agents and other consultants alike. This spreads out wider. Will we soon be being driven in driverless electric cars that park themselves whilst our shopping centres become more like leisure complexes and resorts with telephones in our fingernails and ‘face time’ in our glasses?

Which gets me back to cars and “or so I thought”. I have never been a fan of electric cars before, but seeing the new JLR I-Pace I am a convert. Beautiful. Maybe I should come into the modern world and ask Santa for one of those next year. Definitely an environmental ‘ho ho ho’ but more likely to be the ‘matchbox’ version for me…

From all here at Freeths Real Estate we hope that Santa delivers to you what you ask for and wish all our readers a very Merry Christmas.

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Darren Williamson
Head of Real Estate…

Property Investment Market: the Brexit effect?

Written by Freeths on 06/12/2016

At a recent joint Mazars, Innes England and Lloyds Bank briefing on the effects of Brexit in the Property sector, many positives were discussed which should provide comfort to ourselves and many of our clients. Nonetheless, the recurring theme was that, whilst overall activity remains busy, we shouldn’t underestimate the Brexit effect in the property investment market.

From 2015 – 2016, there has been a 25% drop in the investments market both nationally and in the East Midlands where the briefing was held. This drop could be attributed to U.K. Funds being net sellers and many funds simply taking stock in the aftermath of the June referendum. UK Flag

On the bright side, occupiers and developers seem to have digested the initial shock: the phones are ringing and market values are holding up as many people don’t see alternative investments to put proceeds into. For example, the bulk private renting and build-to-rent markets are hot and pregnant with opportunity. Funders are keen and active as yields are about 5% net.

In addition, Local Authorities are looking to waive the affordable housing requirements which will support efforts to reduce housing shortages. The long term demographics of local areas and, in particular, retirement living schemes are irresistible to investors. McCarthy & Stone, to name just one investor in retirement living, have requirements in 60 towns and cities.

Here at Freeths we see the majority of our clients, both in the property industry and corporate occupiers, are still active and it is very much “business as usual”. On top of this, we are getting increasingly involved in the hot “alternative” areas of Private Rented Sectors, retirement living and high-end private care homes. If you have any thoughts on the above or queries about these sectors then please get in touch.
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Jon Smart
Real Estate Group…

Black Friday? CMA campaign targets price collusion between competitors

Written by Freeths on 15/11/2016

It’s that time of year again…the run up to Christmas involves parties, (sometimes) snow, and undoubtedly the frenzy of last minute Christmas shopping, with many people now choosing to shop from the comfort of their own homes through online sellers and marketplaces.

Following evidence of anti-competitive practices in the online retail industry, the Competition and Markets Authority (“CMA”) has announced a campaign to ensure internet retailers and other companies are complying with competition law.
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In a recent decision, the CMA fined Trod Ltd more than £160,000 for agreeing with GB eye not to undercut each other’s prices when selling through Amazon UK. GB received immunity from fines under the CMA’s leniency policy, having reported the agreement to the CMA.

The campaign’s key messages are that companies such as online sellers should not agree with their competitors what prices they will charge, or that they will not undercut each other on price. Nor should they discuss their pricing intentions or strategies with competitors.

In an attempt to reduce the risk of breaches, the CMA is writing to various companies and reminding them of their obligations under competition law.

The CMA has released a quick guide on how to avoid price fixing, including a list of ‘dos’ and ‘don’ts’:

• Do not agree with competitors that you will not undercut each other
• Do not agree with competitors what prices you will each sell your products for
• Do not discuss your pricing strategies or intentions with competitors
• Do familiarise yourself and your staff with competition law
• Do seek independent legal advice to ensure you comply with competition law

With potential criminal liability (imprisonment for up to 5 years and unlimited personal fines) and director disqualification (for up to 15 years) for the individuals involved, as well as fines of up to 10% of worldwide group turnover and damages actions against the companies concerned, the consequences of colluding on prices can be grave indeed.

If you would like more information on competition compliance, please get in touch.
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Andy Maxwell
Competition Group…