Industry comment, updates and news from the Websters team.

The Service Charge Code – is change on its way?

Thursday, January 11th, 2018 in Commercial, Landlord, Managing Agent, News, Service Charge

The Royal Institution of Chartered Surveyors (RICS) announced in October 2017 that a fourth edition of the Service Charge Code for Commercial Property was under deliberation.

Ahead of it’s proposed launch on 01 April 2018 Monika Holyst of Freeths Solicitors has provided some insight into the draft fourth edition of the Code.

Read the full article here.



Autumn 2017 Budget: key construction announcements

Monday, November 27th, 2017 in Landlord, News, Residential

On the 22nd November 2017 the Chancellor of the Exchequer presented his Autumn Budget to Parliament.

The 2017 budget addressed the requirement of increased funding in the construction industry. It was announced that £15.3 billion of new funding would go towards supporting the building of houses over the next five years. This is with the aim to achieve a target of 300,000 new homes a year. In addition to this £34 million has been set aside to support the teaching of construction skills.

Thomas Reuters Practical Law have highlighted the implications that the new budget has on the construction industry – Read the full article here.

Repair or replace? Sometimes it’s the landlord’s decision

Monday, October 16th, 2017 in Commercial, Landlord, Managing Agent, Residential, Service Charge

One of the main issues faced by landlords making a repair or replace decision concerns the recovery of such costs through the service charge.

In a recent article Zara Saunders of Shoosmiths comments that Service charge recovery can be a matter fraught with difficulty, even in the sphere of commercial property where no statutory limitation applies. Property owners may only recover costs to the extent permitted by a lease and issues frequently arise regarding whether an item of expenditure is one of repair or improvement and to what extent recovery might be permissible. Tenants will generally expect to pay the cost of repairs but not improvements.

Read the full article here.

Major changes ahead for private sector landlords and their agents

Tuesday, September 5th, 2017 in Landlord, News, Residential

Adele Nicol of Anderson Strathern LLP reports that new legislation, concerning Private Housing (Tenancies) (Scotland) Act 2016, creates a new form of residential tenancy known as the Private Residential Tenancy (“PRT”). Once the Act is in force it will not be possible to create new Assured or Short Assured Tenancies; existing leases will be phased out, for example a tenant inheriting an Assured or a Short Tenancy will acquire a PRT instead. The ability of a landlord to bring a PRT to an end is more limited than for a Short Assured Tenancy.

The new legislation also contains related provisions including on rent review, and on rent control (in “pressure zones”)

The changes in the Private Housing (Tenancies) (Scotland) Act 2016 have not yet been brought into force. The Scottish Government has indicated that this will happen in December 2017.

Read more here.

The Construction Industry Scheme – 2017 Update

Wednesday, July 12th, 2017 in Commercial, Landlord, Managing Agent, Mixed Use, Residential

Zoe Stollard of Clarke Willmott provides insight into the Construction Industry Scheme and the changes which have been implemented in 2017.

The Construction Industry Scheme (CIS) is designed to decrease perceived undeclared payments in the construction sector. It requires contractors to register for the scheme and to withhold tax before payments are made to sub-contractors under contracts relating to construction operations. The amount of tax withheld depends on the registration status of the sub-contractor:

  • if they are unregistered, 30% must be withheld;
  • if they are registered, 20% must be withheld; and
  • if they meet certain criteria and register for gross payments, 0% must be withheld.

The contractor must then pass to the HMRC the amounts withheld.

Prior to April 2017, contractors could verify whether sub-contractors were registered and whether they could be paid gross online or by phone. From the 6th of April 2017 sub-contractors must be registered online.

Read the full article here.


The advantages of external audit for managed property portfolios

Saturday, April 1st, 2017 in Commercial, Landlord, Managing Agent, Residential, Service charge audits

When we started specialising in service charge audits they were frequently undertaken as part of the property owner’s general annual audit. This was not a satisfactory situation because specialist knowledge is needed for accurate service charge accounting assessment.

  • Landlords and tenants have transparent financial relationships
  • Tenants trust that the service charge is correct and fair at no added cost to the landlord
  • A reduction in investigations by tenants into service charges, saving time and money for landlords
  • Specialist advice on current techniques for the internal accounts team
  • Almost all general practice accountants and auditors unfortunately do not have the specialist knowledge and experience to fully understand your needs

Since that time many large landlords in the UK have moved to providing independent audited accounts for their service charges thus removing one cause of landlord : tenant conflict

Presence of tenant’s chattels frustrates vacant possession on break

Wednesday, January 4th, 2017 in Commercial, Landlord, Managing Agent

Burges Salmon LLP reports that, in the case of Riverside Park Ltd v NHS Property Services Ltd, the break clause in an NHS lease provided that the break would only be effective if vacant possession given but partitioning, kitchen units, window blinds and other such items were left in the premises.Therefore the landlord argued that the NHS had not given vacant possession of the premises and that therefore the break was invalid. The key issue was whether the items were fixtures or tenant’s chattels. If the items were chattels then vacant possession had not been given and the test for distinguishing chattels and fixtures centres on the degree of annexation and the object/purpose of annexation. The court determined that the items were chattels and not fixtures, because they were only “slightly attached” to the premises and did not provide a lasting improvement to the premises. The court also noted that, even if the items had been fixtures, the NHS had still not complied with the break clause, because the definition of “premises”  specifically excluded partitioning and tenant’s fixtures.

Disrepair to Property – New Obligations for Landlords

Sunday, December 11th, 2016 in Commercial, Landlord, Managing Agent

Paul Greatholder of Russell-Cooke reports that there is an obligation upon the tenant to return demised property at the end of the tenancy in a good state of repair. The problem with dilapidations disputes was that there was a perception that landlords were exaggerating their claims, thus leading to a failure to resolve disputes  in a commercial way. The Civil Procedure Rules in 1999 was not designed to change the law, but to persuade parties who are in a dispute to take certain steps before issuing court proceedings to see if the dispute could be resolved, or at least any differences.  The ‘persuasion’ arises from the risk that if a party chooses not to follow a protocol…..

Read the full article here.

Are litigation costs a service charge?

Wednesday, November 16th, 2016 in Commercial, Landlord, Managing Agent, News, Residential, Service charge audits

Eversheds has reported that, whilst there is no hard rule that use of general words in a service charge clause prevents recovery of related legal costs, in order to be certain, an obligation to pay solicitors’ costs under the service charge provision should be clearly spelt out. If those solicitors’ costs are to include litigation costs then that should equally be made clear.
Remember that, even where the lease makes provision for recovery of costs as part of the service charge, this can be overridden by the provisions of s20C of the Landlord and Tenant Act 1985.
This was clarified in the recent case Sinclair Gardens Investments (Kensington) LTD v Avon Estates (London) LTD.

Read the full article here

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