UK: Property News

Last Updated: 18 November 2008
Article by Richard Rennie

Residential Stamp Duty 'holiday'

The UK Government has announced that a temporary exemption ('holiday') from SDLT will apply for acquisitions of residential property worth not more than £175,000 for transactions completed between 3 September 2008 and 3 September 2009. To benefit from the exemption, the property must consist entirely of residential property, but the guidance suggests that the consideration can be apportioned for property which is partly residential and partly non-residential (e.g. a shop with a flat above) in calculating the total SDLT due. There are no circumstances in which the exemption will be applied to transactions completed either before 3 September 2008 or after 3 September 2009.

Developer Contributions Review postponed

In view of the prevailing economic conditions, the Scottish Government has announced that the review of developer contributions will be postponed to avoid placing more burdens on development at this time.

Developers' incentives to be fully disclosed to lenders

The Council of Mortgage Lenders has introduced new guidelines for surveyors and solicitors to ensure that the conveyancing and valuation process capture the true value of newly built, converted or renovated properties. Developers are now required to complete a form to disclose the extent of the incentives on offer, which have included payment of deposits, stamp duty and/or legal fees, mortgages or the offer of cars, holidays and cashback so that these incentives are taken into account when assessing the value of the property.

Planning conditions must be clear

Two recent cases in the Court of Session have demonstrated that planners must be very clear about the planning conditions they seek to impose when granting planning permission. In the first case a planning committee's decision was annulled as it relied on the reasoning of a planning official's report, which was unclear and ambiguous - leaving even the informed reader uncertain about its conclusions. In the second case, the Reporter's "aspirational" planning condition so lacked precision and enforceability that the Court held that it was invalid. (Jermon Limited v. West Dunbartonshire Council; Aberdeenshire Council v. Scottish Ministers)

Shopping Centre brands can be trademarked

The importance of branding shopping centres has been reinforced by a recent decision in the English High Court. The court ruled for the first time that the owners of shopping centres can protect their logos and brand names by trade mark. Trade marks are normally only registrable for services "usually provided for remuneration" and the Registrar had taken a narrow view of this requirement. The decision of the High Court widened that view by recognising that remuneration can be indirect and includes the service of encouraging shoppers to spend money in one shopping centre rather than another. In recent months there have been an increasing number of disputes over the branding of shopping centres and other developments. It is crucial that proper advice is obtained before a brand is adopted to avoid a costly claim and an embarrassing name change. (Land Securities & Others v. Registrar of Trade Marks)

Landlord can carry out intrusive works to leased premises

Where the landlord had a reserved power of entry in a lease, with or without workmen, the Court of Session held that it is implied that the wording encompassed a power to carry out intrusive works to determine potential environmental liability associated with any soil or groundwater contamination, even although these works would cause disruption to the tenant's business. The Court reasoned that the reference to workmen showed that inspection was not intended to be limited to a superficial visual inspection, particularly having regard to the length of the lease and the nature of the works. (Possfund Custodian Trustee Limited v. Kwik Fit Properties Limited)

Home Reports and Energy Performance Certificates (EPCs)

Home Reports, consisting of an EPC, property questionnaire and survey report will become mandatory from 1 December this year. New Regulations provide that buyers will have a right of damages against surveyors in respect of material loss caused by their negligence in preparing the survey report for properties from 1 October. Energy Performance Certificates will be mandatory for non-domestic buildings sold or rented out from 4 January 2009.

Unwritten servitudes must be of a known type

A recent Court of Session decision has realigned expectations relating to the possibility of a widespread change to the law of servitudes following the House of Lords' judgment in Moncrieff v. Jamieson. The judge held that unwritten servitudes have still to conform to the 'fixed list' of servitudes to be valid. In this case, the claim for a right to erect signage over a shop-front was refused, as there had never been such a servitude right in the fixed list. The Moncrieff case was distinguished, as the right there was an ancillary right, without which the servitude right would not have worked. (Romano v. Standard Commercial Property Securities Limited & Another)

Expert not arbiter

In determining the fair market rent, an expert valuer is entitled to carry out his own investigations without becoming an arbiter, the Court of Session has held. Provided that the language of the provisions in the lease is clear, then only a subsequent agreement between the parties can convert his role from that of an independent expert into a quasi-judicial role. In an unconnected English case, the judge pointed out that an expert determination could have many advantages, including speed and limited costs exposure, but warned that a court will only overturn the expert's decision in very limited circumstances. (Holland House Property Investments Limited v. Crabbe & Another; Owen Pell Limited v. Bindi (London) Limited)

Eco-targets for developments

The new Scottish Planning Policy (SPP) 6 sets out the Government's expectation that all future planning applications proposing developments with a total cumulative floorspace of 500m2 or more should incorporate on-site zero and low carbon equipment contributing at least an extra 15% reduction in CO2 emissions beyond the emissions standard in the 2007 Building Regulations. It also encourages higher standards to be secured for particular developments, including the potential for decentralised energy supply systems based on renewable and low-carbon energy.

Ransom claim not the road to riches

When the Roads Authority removed a public road from the list of adopted roads without physically stopping it up, the public right of passage will still subsist over that road, the Inner House of the Court of Session has held in a recent decision. A title speculator had hoped to use the former verge of the road as a ransom strip to a housing development. In determining whether the public right of passage was established, the Court will look at the facts and circumstances in each case. Clearly this worked in the house owners' favour in this case, but bear in mind that the corollary of this is that a development site could be sterilised by a subsisting right of passage. (Hamilton v. Dumfries & Galloway Council)

Law Lords overturn DDA comparators

The House of Lords has overturned the previously established disability discrimination comparators. A local authority sought to recover possession of a flat from a tenant who breached his lease by illegally subletting, without knowing that he suffered from schizophrenia. The tenant had failed to prove that his mental condition played a motivating part in the local authority's decision to repossess the flat. Therefore the correct statutory comparator to establish discrimination would be a secure tenant with no mental illness who had sublet rather than one who had not sublet. (Lewisham London Borough Council v. Malcolm)

Right to buy ... pints?

The Scottish Ministers have recently accepted an application from a community to register an interest in buying their local pub. The pub has now closed and will be converted into a dwelling house. The right to buy would only operate when the building is placed on the market and the owner has no plans to sell. However, this successful application is a useful illustration of the growing power of communities to control, or even prevent, development in their local area.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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