The Court of Appeal has confirmed that a fixed term assured shorthold tenancy (AST) which continues as a statutory periodic assured shorthold tenancy (statutory tenancy) under section 5 of the HA 1988, is a new tenancy. As a result, a deposit paid before 6 April 2007 and held by the landlord should be registered with a tenancy deposit scheme (TDS) when the statutory tenancy arises after that date. (Superstrike Ltd v Rodrigues [2013] EWCA Civ 669.)

Where the tenant exercised a break clause part-way through a quarter, having paid the rent for the full quarter, the High Court implied a term into the lease entitling the tenant to a repayment of the rent from the break date to the end of the quarter.

This decision is a departure from the widely-accepted view that, in the absence of an express provision, a tenant will not be entitled to a refund of any rent paid that relates to the period after a break date. (Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd and another [2013] EWHC 1279 (Ch).)

In a recent case the Technology and Construction Court has refused permission to appeal against an arbitrator’s decision awarding damages against a developer that stopped work on a project for over a year.

The developer suspended work because the recession had rendered the project unviable, arguing that continuing would have been “commercial suicide”. The prospective tenants of the development alleged that this breached the parties’ agreement for lease, which included separate clauses requiring the developer to:

• Carry out the works diligently (the diligence obligation).
• Use all reasonable endeavours to ensure that the works were completed as soon as reasonably practicable (the completion obligation).

 The court agreed with the arbitrator that the developer had breached the diligence obligation. In doing so, the court held that the concept of diligence carried with it notions of “assiduity/expedition”  and that the developer’s two obligations stood separately, so that even if stopping work was not a breach of the completion obligation, it was still a breach of the diligence obligation.

The case demonstrates that that the Courts will strictly enforce the above standard provisions when interpreting Development Agreements and the onus is on Developers to complete developments irrespective of the wider economic circumstances.

The Department for Communities and Local Government has issued the General Housing Consents 2013. The consents, which came into force on 11 March 2013:

• Set out the situations where the specific consent of the Secretary of State is not required before a local authority disposes of council housing land and associated assets.
• Extend the freedom of local authorities in relation to the granting of leases and the disposal of reversionary interests.

Given that section 44 of the Housing Act 1985 provides that a disposal of a house without consent is void (unless it is a disposal of a single house to an individual), the only remedy for such a disposal is to make the disposal again with the consent since a section 32 consent cannot be given retrospectively.

The Government announced in yesterday’s budget a new two tiered Help to Buy scheme offering an Equity Loan and Mortgage Guarantee scheme to help tackle the problems in the housing market.

Help is available to those wanting to move up the housing ladder as well as first-time buyers.  The scheme has no income caps but the buyer will have to pass lenders’ credit and affordability tests and have a capital repayment mortgage.

Equity Loan Scheme

This is available from 1 April 2013 for 3 years.  The government will provide buyers with an equity loan of up to 20% of the value of a new build property.  The loan will be interest free for 5 yeas with interest becoming payable in year 6.  This loan will be repaid at any time within the term of the mortgage (up to 25 years), or on the sale of the property.

Mortgage Guarantee

This is available from 1 January 2014 for 3 years.  This scheme is not restricted to those buying a new residential property.  The aim is for lenders to offer a greater number of mortgages to buyers with small deposits.

The government will not be guaranteeing the borrower’s mortgage payments, they will be providing lenders with the option to purchase a guarantee on the high loan-to-value portion of the mortgage, the government will charge a commercial fee.

If the borrower’s property is repossessed, the government will cover a proportion of those losses suffered by the lenders.  This guarantee is valid for up to 7 years after the grant of the mortgage.  Further details will follow later this year.

The Upper Tribunal (Lands Chamber) considered when a shared ownership lease would be a long lease for the purposes of section 76 of the Commonhold and Leasehold Reform Act 2002.

Under section 76(2), a lease could be a long lease if:

• It was granted for a term exceeding 21 years and;
• If it was a shared ownership lease, where the tenant’s share was 100% .

Section 76(2) was confusing, because the leases in question were all granted for more than 21 years, but the tenants held shares of less than 100%.

The tribunal found that section 76(2) should be read as a series of “gateways”, if either either of the criteria were passed then they were long leases. The draftsman did not intend section 76(2) to exclude a shared ownership lease.

A right to light is an easement.  A right to light prevents someone with an interest in the servient land from substantially interfering with the access of light on the dominant land, for example by erecting or altering a building on the servient land, which would obstruct the light.

The Law Commission wants to introduce greater certainty and transparency into the law, ensure that rights to light do not act as an unnecessary constraint on development and make sure that the important amenity value of rights to light remains are protected.

The Law Commission makes the following provisional proposals:

It should no longer be possible to acquire rights to light by prescription.

The introduction of a new statutory test, to clarify the current law on when courts may order a person to pay damages instead of ordering that person to demolish or stop constructing a building that interferes with a right to light.

The introduction of a new statutory notice procedure, which requires those with the benefit of rights to light to make clear whether they intend to apply to the court for an injunction (ordering a neighbouring landowner not to build in a way that infringes their right to light), with the aim of introducing greater certainty into rights to light disputes.

The Lands Chamber of the Upper Tribunal should be able to extinguish rights to light that are obsolete or have no practical benefit.

The consultation closes on 16 May 2013.

The Public Services (Social Value) Act 2012 requires in the procurement of contracts of an overall value exceeding £173,934 for the tendering organisation to have regard to the social, environmental and economic wellbeing of the community. 

There are no sanctions for non-compliance but non-compliance could give rise to Judicial Review. 

Solicitor/Legal Executive

Working in our established Sales Team – dealing with site set up and managing plot sales (shared ownership, private sale). Dealing with staircasing, resales and other related property matters.

Role with considerable client contact.

Legal Cashier

Experienced Legal Cashier required to cover maternity leave.  Recent solicitor’s accounts experience essential.

EXCELLENT PACKAGE AVAILABLE

Please send CV to mail@sharratts-London.co.uk

Sharratts LLP is an equal opportunities employer.

Last week the Government launched its proposals to allow offices to be converted to residential use without the need for planning permission. The permitted right will last for 3 years, but Local Authorities are given an “opt out”.