Industry comment, updates and news from the Websters team.
Milton McIntosh from Excello Law reports that, in the recent case of Campbell v Redstone Mortgages [2014], concerned a long-running residential mortgage possession claim, the High Court has provided useful clarification on how goods left in a property by an evicted borrower or tenant are to be dealt with by a lender or landlord after they recover possession.
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An article Penningtons Manches looks at the ‘non domestic’/commercial proposed consultation on the regulations for minimum energy performance (now called minimum energy efficiency standards (MEES)) Properties with an energy performance certificate (EPC) rating of F or G will be unlettable until works improving the property’s energy efficiency are carried out.
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Deloittes has questioned whether the modifications relating to environmental sustainability in the recent (3rd) edition of the Service Charge Code will help to drive change? Whilst there have not been any fundamental changes, some additional guidance has been provided specifically around green leases, Carbon Reduction Commitment Energy Efficiency Scheme (CRC), improving environmental performance and Energy Performance Certificates (EPC’s). I would argue that the updates can only be regarded as a good thing for commercial property.
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HM Revenue & Customs has finally confirmed that the surrender of a lease subject to tenancies can constitute a “transfer of a going concern” with the result that no VAT is payable. This will result in stamp duty land tax(SDLT) savings for landlords accepting surrenders and in certain cases it will be possible to reclaim SDLT that has been overpaid on historic surrenders.
Phil Taylor has highlighted an interesting recent service charge question arising in the case of Daejan Properties Ltd v Griffin & Anor. If a property suffers a structural failure, due to lack of repair, can tenants claim that reduced service charges should only be paid on the assumption that the repairs had been carried out?
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Morton Fraser has noted that the Rent (Scotland) Act 1984, says that any person who, as a condition of the grant, renewal or continuance of a protected tenancy, requires the payment of any “premium” is guilty of an offence. However letting agents still sometimes ask for payments from tenants on top of any rental that is due in terms of the tenancy. In the recent case of Cross -v- Aberdeen Property Leasing the letting company had imposed an administration fee on the tenants of £125 simply for the entering into of the tenancy agreement. The tenants paid this fee initially (presumably because they thought they no choice) but subsequently took court action to recover it. The court confirmed that the administration fee was a prohibited payment.
In his ‘Tip of the Week, David Wells of DAC Beachcroft reports that the recent case of Friends Life Management Services Limited and A&A Express Building Limited reinforces the point that a landlord either has to spend monies it receives by way of service charge within the service charge year a lease terminates or return it to the tenant.
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Dominic Cunliffe of Macfarlanes notes that, unless the lease makes express provision to the contrary, a tenant will not be able to recover from its landlord any prepaid rent or other sums, which relate to the period after a break date.
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Inside Housing reported that ‘coalition MPs defeated an amendment to the Consumer Rights Bill last night, to ban letting agent fees, by a majority of 53 votes. The Labour proposal was defeated 281 to 228 with all but three Conservative and Lib Dem MPs voting against it. The government released its own amendment yesterday – letting agents will have to publish all fees charged in comprehensive detail or face fines. The Communities and Local Government department statement about the amendment said it will be added to the bill at a later date. Stella Creasy, Labour MP for Walthamstow, tabled the opposition’s motion and said before the vote: ‘It is a fundamentally anti-competitive corporate practice. We want to do something about it.’
King & Wood Mallesons has reported that CRAR (Commercial Rent Arrears Recovery) – the new rules for seizing a tenant’s goods – comes into force on 6 April 2014 in England & Wales, replacing the ancient common law rules of distress for rent. CRAR is designed to be fairer to tenants, but will it be an effective remedy for landlords and are there any alternatives?
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