Hedges Breakfast Briefing:
Property and Business
2 June 2015
GPDO 2015; and
Business Lease Renewal Update
Mark Reynolds
Solicitor, Commercial and Rural
Property
1.
2.
General Permitted Development
Order 2015
Business Lease Renewal Update
Development
•
Town and Country Planning (General Permitted
Development) (England) Order 2015
• Town and Country Planning (Development
Management Procedure) (England) Order 2015
Both came into force on 15th April 2015
What do the new regulations
do?
They revise and consolidate the existing law on
permitted development and the procedures to be
followed by LPA’s when dealing with planning
applications in England.
Town and Country Planning
(General Permitted Development)
(England) Order 2015
What is “permitted development”?
The right to carry out certain developments or
changes of use without the need to obtain planning
permission.
As well as consolidating the existing rules under one
umbrella the 2015 GPDO introduces some new classes
of permitted development.
Do you need planning permission?
Article 3 - Planning permission is granted for the classes of
development described in Schedule 2. As mentioned, this
schedule consolidates the existing rules and introduces some new
changes. In the main these are:
a. The date for expiry of time-limited developments for larger
home extensions has been extended from 30 May 2016 to 30
May 2019.
b. The previously time-limited permitted development rights
for extensions to non-domestic premises have been made
permanent
c. New permitted development rights for:
•
The conversion of premises used as a shop, for
financial and professional services, a betting office,
pay day loan shop or a casino to a restaurant or
café
•
•
•
•
The conversion of premises used as a shop, for financial
and professional services, a betting office, pay day loan
shop or a casino to a restaurant or café
The conversion of a shop, betting office or payday loan
shop to premises providing financial and professional
services – this is an extension of the previous right to turn
a shop into a deposit taker; a specific type of financial
service.
The conversion of premises used as a shop, for financial
and professional services, a betting office or pay day loan
shop to assembly and leisure uses.
The conversion of casinos or amusement arcades to
dwellinghouses.
•
The conversion of casinos or amusement arcades
to dwellinghouses.
•
The conversion of premises used for storage or as
a distribution centre to dwellinghouses
d. The introduction of a new permitted development
right for the temporary use of buildings and land for
commercial film making.
e. The introduction of a new permitted development
rights for works to non-domestic premises relating to:
•
The provision of collection facilities within a shop
•
Modifying shop loading bays
•
The extension or alteration of a building and the
installation or replacement plant or machinery on
land used for a waste management facility
f.
introduction of a new permitted development rights for the
installation of solar photovoltaic (PV) panels (with a generating
capacity of up to one megawatt in combination with any
equipment installed under permitted development rights for
solar microgeneration equipment) on the roof of non-domestic
buildings.
Permitted Development – Prior Approval
It is worth noting that prior approval of the local planning
authority is required in a number of permitted developments
including:
•
•
•
•
•
•
•
•
Retail to restaurants/cafes
Retail to assembly and leisure
Retail to dwellinghouses
Certain sui generis uses to dwellinghouses
Offices to dwellinghouses
Storage or distribution centres to dwellinghouses
Agricultural buildings to dwellinghouses
Agricultural buildings to various flexible uses
•
•
Installation etc. of solar panels on roofs of non-domestic
buildings providing up to 1 megawatt.
The approval required is only in respect of certain elements of
development e.g. noise impact, impacts on transport and
highways, contaminations risk, increased use of services etc.
The Town and Country Planning
(Development Management
Procedure) (England) Order 2015
This Order prescribes procedures connected with planning
applications, consultations in relation to planning applications,
the determination of planning applications, appeals, local
development orders, certificates of lawful use or development
and the maintenance of registers of planning applications and
related matters.
Business Lease Renewal Update
The recent case of Hough V Greathall [2015] involved a commercial
tenant’s application to Court for the grant of a new lease in
circumstances where the Landlord sought repossession of the premises
having served a section 25 notice.
The Landlord was seeking repossession of the premises on the basis :
“that on the termination of the current tenancy the landlord intends to
demolish or reconstruct the premises comprised in the holding or a
substantial part of those premises or to carry out substantial work of
construction on the holding or part thereof and that he could not
reasonably do so without obtaining possession of the holding;” (section
30(1)(f) of Landlord and Tenant Act 1954).
The Tenant argued that the Landlord must show that it had the necessary
intention to redevelop at the time the section 25 notice was served and
that in this case the Landlord had failed to show this.
In reliance on an a 1959 House of Lords’ decision (Betty’s Cafes Ltd v
Phillips Furnishing Stores Ltd [1959]) Croydon County Court rejected this
argument and confirmed that the relevant date for ascertaining whether
the Landlord had the necessary intention to redevelop was the date of the
hearing and not date of service of the section 25 notice.
The Tenant appealed this decision to the Court of Appeal arguing that the
correct date for ascertaining the Landlord’s intention to redevelop was the
date of service of the notice.
The Tenant’s argument turned on the wording of section
25 of the Landlord and Tenant Act 1954. The current
wording states that a section 25 notice “shall not have
effect unless it also specifies one or more of the grounds
specified in section 30(1) of this act as the ground or
grounds for his opposition”.
This current wording was introduced as a result of a
change made in 2003. Prior to that amendment the
previous wording of the section had required the
Landlord to state whether it “would oppose” the grant
of a new tenancy and the grounds on which it “would do
so”.
The Court of Appeal upheld the County Court’s decision
and confirmed that it was only necessary for the
Landlord to prove its intention to redevelop at the date
of a hearing. The amendments in the wording made to
section 25 were a simple recognition of the fact that the
Tenant no longer has to serve a counter notice indicating
whether or not it would oppose the Landlord’s section
25 notice seeking repossession of the premises. Because
of the removal of the requirement to serve a section 25
notice it was no longer necessary for the wording to
require the Landlord to do something in the future which
it could only do depending upon whether the Tenant
served a counter notice.
Tenant appealed this decision to the Court of Appeal
arguing that the correct date for ascertaining the
Landlord’s intention to redevelop was the date of service
of the notice.
The Tenant’s argument turned on the wording of section
25 of the Landlord and Tenant Act 1954. The current
wording states that a section 25 notice “shall not have
effect unless it also specifies one or more of the grounds
specified in section 30(1) of this act as the ground or
grounds for his opposition”.
Residential Tenancy Update
Toby Walker
Solicitor, Dispute Resolution
Possession of Residential
Property
Commercial Landlords , Agents,
Private B2L, Tenants
Tenant does not vacate property
No alternative property
Aware of rights
Counterclaim / vendetta (!)
Local Authority assistance - IH risk
Court order for possession
Landlord must not evict a tenant
without obtaining a court order
(section 3, PEA 1977)
Potential for harassment, unlawful
eviction claims – civil and possibly
criminal action
Notice to determine tenancy
Within the fixed term of the tenancy
agreement? – s8 Notice
Only if T in breach (usually rent)
Must be in ‘prescribed form’
S21 Notices
S 21(1) - dealing with ASTs on the expiry
of the fixed term
S 21(4) - terminating ASTs where a
periodic tenancy has arisen thereafter
21 Recovery of possession on expiry or termination of assured
shorthold tenancy.
(1) Without prejudice to any right of the landlord under an assured
shorthold tenancy to recover possession of the dwelling-house let on
the tenancy in accordance with Chapter I above, on or after the
coming to an end of an assured shorthold tenancy which was a fixed
term tenancy, a court shall make an order for possession of the
dwelling-house if it is satisfied—
(a)that the assured shorthold tenancy has come to an end and no
further assured tenancy (whether shorthold or not) is for the time
being in existence, other than an assured shorthold periodic tenancy
(whether statutory or not)]; and
(b)the landlord or, in the case of joint landlords, at least one of them
has given to the tenant not less than two months’ notice in
writing] stating that he requires possession of the dwelling-house.
A notice under section 21(1)(b) of the HA 1988:
• Does not have to be in a prescribed form.
• Does not have to expire on a particular day.
• Can be served before the tenancy expires
• Does not have to specify any grounds.
• No requirement to state it is a s21(1) notice
Nice and easy
Statutory periodic tenancies
A statutory periodic tenancy arises at
the end of a fixed term tenancy
under section 5(2) of the HA 1988.
S 21(4) notice
1. In writing
2. At least two months after the notice is given
3. It must be the last day of a period of a tenancy
Saving formula:
“OR the day on which a complete period of your
tenancy expires after the end of two months
from the service of this notice.”
Spencer v Taylor [2013] EWCA
CoA held: LL can serve s 21(1) notice where a fixed
term has expired and the tenant has remained in
occupation on a statutory periodic tenancy
“Conventional wisdom” as to section 21 incorrect
What does this mean for LLs?
section 21(4) and section 21(1)
– not mutually exclusive
Remember - Tenancy Deposits – can
still render s21 notice ineffective
Small Business, Enterprise &
Employment Act 2015
David Engwell
Head of Business Services
The first Act specifically for small
business
• Intended to help entrepreneurs and start-ups.
• Wide ranging.
• Ensures that the United Kingdom is a safe and
helpful environment within which to conduct
business.
• Promotes transparency.
Timetable
• Received Royal Assent on 26 March 2015.
• Phased introduction over the next year or so,
commencing on 26 May 2015.
Transparency of Management
• Directors’ duties will apply to shadow directors
(consequences for investors and their appointed board
members).
• Directors will no longer be required to signify their
consent to act on Form AP01. If a director has not
consented to act he may apply to Companies House to
have his name removed from the Register.
• Companies House will contact the director to notify
him of his directors’ duties and to confirm his
willingness to act.
Company Directors
• Corporate directors prohibited from October
2015, with 12 months to remove.
• Makes it easier to identify who is running the
company.
• Has the effect of removing limited liability for
directors.
• Directors should ensure that Directors and
Officers insurance is in place, or there are suitable
indemnities for acting.
Transparency on Ownership:
People with significant control
• From April 2016, unquoted companies must keep
a public register of people with significant
control:
– Ultimate shareholding in excess of 25%
– Exercises control over management of the company.
• If the person with significant control fails to
disclose his identity then the company may
impose sanctions such as suspending voting
rights.
People with significant control
• Companies will have a duty to investigate,
maintain information and ensure that
information is kept up to date.
• Criminal penalties for companies and
individuals for failing to supply information.
Bearer Shares
• Prohibited with effect from 26 May 2015.
• 9 month transitional period for existing bearer
shares.
• Ensures Companies House will have details of
all shareholders.
Annual Return
• From April 2016, the Annual Return will be
replaced by an Annual Confirmation
Statement.
• Opportunity to align the Annual Confirmation
Statement with the filing of the Company’s
statutory accounts.
Statutory Registers
• Private companies will be able to keep their
statutory registers at Companies House.
Companies House
• Companies House online facilities being
improved
• Free of charge service
• Free documents
Transparency on Payments
• Companies will be compelled to publish their
practices and policies for paying suppliers.
Access to finance
• Banks will have to disclose details of
companies that they have turned down for
loans to online platforms.
• Secretary of State permitted to nullify clauses
in business contracts that prohibit a company
from selling invoices to a third party finance
provider.
A Round Up: other interesting
developments from the world of
property!
Vicky Hernandez
Head of Property
Assignment of Commercial Leases:
landlords should get proper advice!
Singh v. Dhanji
The facts
• Assignment prohibited without consent
(NTBUW)
• Consent refused – alterations carried out in
breach
• Court of Appeal: Insufficient evidence; and
• Immaterial breach
• Damages: £214k plus £31k interest
A reminder: landlord’s duties
• To give consent. “Except where it is
reasonable not to do so.”
• To give consent within a reasonable time
When is it reasonable to refuse
consent?
• Not on grounds that have nothing to do with the
landlord and tenant relationship in connection
with the lease
• Fact based decision depending on all
circumstances
• Reasonable conduct as opposed to right or
justifiable conduct
Singh v. Dhanji
• Just because there are breaches of covenant
by the tenant does not mean that it is
reasonable to refuse consent.
• It is necessary to consider the nature and
gravity of the breaches, and whether the
landlord's position would be prejudiced by an
assignment .
Small Business, Enterprise and
Employment Act 2015
• Changes made to LTA 1954: exclusion of
residential properties used as business
premises from the security of tenure
provisions of the LTA 1954
• A "home business" is "a business of a kind
which might reasonably be carried on at
home"
Public Rights of Way
Ali v Secretary of State for
Environment, Food and Rural Affairs
• Dedication as a highway: 20 years rule
• Landowner can defeat the claim if sufficient
evidence of lack of intention
• Overt acts required
• Previous case law: locking a gate once a year
could amount to sufficient interruption to a
right to defeat highway designation
• In this case locking the door over Christmas
2011 was ineffective in rebutting the
presumption of dedication
EPCs
Minimum Energy Efficiency
Standard Regulations
• 1st April 2016
• Domestic and non-domestic property
• Two deadlines:
– 1st April 2018 - new leases
– From 1 April 2023 - continuing leases
• Penalties for non-compliance: based on
rateable values for commercial property
capped at £150k
• Very limited exemptions:
– short/long leases
– No EPC required
– Not cost effective (7 year payback rule)
– Unable to obtain third party consents
Lease Issues
Works may be carried out now to improve
energy efficiency. Main considerations:
• Disruption/rights of entry
• Cost – service charge recoverability?
This weekend: Hedges our sanity in question….