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Commercial Property

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Archive for the ‘Lease’ Category

Energy Efficiency Hotting Up

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Malcolm Poynter

Malcolm Poynter – Partner

Most properties are now required to have an Energy Performance Certificate. In relation to commercial buildings it will be unlawful as from the 1st April 2018 to let a property which has an energy performance rating lower than E. This may seem a long way off but landlords should be bearing this in mind when they acquire properties or own properties below this standard which they may wish to let in the future.   This will also apply if the landlord then wishes to renew the lease to an existing tenant or indeed extend the term.

For further details please contact Malcolm Poynter on 01635 521212 or malcolm.poynter@clmlaw.co.uk

Written by Malcolm Poynter

October 15th, 2015 at 4:01 pm

CRAR

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Malcolm Poynter

Malcolm Poynter – Partner

In April 2014 new legislation came into effect known as the commercial rent arrears recovery or CRAR for short. One aspect of this is the need to give tenants at least 7 days notice of the intention to effect recovery of arrears under those provisions and it has emerged that some tenants are using this as a form of short term overdraft.

The British Property Federation is making various recommendations in relation to these provisions to the Ministry of Justice – one of which is that if the landlord uses this process 3 times under a particular lease then if further arrears arise no notice will be required.

 

For further details please contact Malcolm Poynter on 01635 521212 or malcolm.poynter@clmlaw.co.uk

What a bind!

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When a deal is done in relation to property there will be a contract. What distinguishes property transactions from simple contracts is the ability of one party to bind future owners of the property. Malcolm Poynter, a commercial property specialist with law firm, Charles Lucas & Marshall discusses an example of this, restrictive covenants.

Malcolm Poynter

Malcolm Poynter – Partner

Properly drafted, a covenant on a property will bind each owner of that property. There are many examples of restrictive covenants, such as not to sell alcohol, not keep pigs and not to use the property for business.

The covenant must be restrictive ie say what you cannot do. If it is positive, such as to contribute to the maintenance of something or to keep something in repair, it is not directly enforceable against successors of the freehold. It is for this reason that flats tend to be dealt with by lease because each tenant is bound by the terms of the original lease in which the covenants will be set out.

Covenants that restrict building can obviously cause problems if you are proposing to develop your land. The wording of these covenants needs to be looked at very closely to decide what may not be done. For example, there was a case where a developer wanted to build a roadway which had to be adopted by the Highway Authority as a public road. A covenant not to erect anything on the land did not prevent the roadway being built but did prevent lamp posts being erected which meant the road could not be adopted and was therefore, in effect, prevented.

Some covenants allow building if ‘the Transferor’ approves the plans. Does this mean the original Transferor or the current owner of the land which has the benefit of the covenant? Difficulties can also arise if the person to give consent cannot be found or has died.

When faced with covenants restricting development sometimes you can establish that the covenants are invalid and may therefore be ignored.

Sometimes there are grounds for applying for the covenant to be modified or discharged by the Upper Tribunal (Lands Chamber). There are a variety of grounds upon which an application may be made.

Compensation may be payable but how is it calculated? The loss of the covenant may have a small effect on the value of the property with the benefit but, on the other hand, the person with the benefit may have been able to extract a significant payment from the developer for the covenant’s release. There is no rigid formula how compensation is to be calculated and, as the Courts love to say, each case depends on its own facts.

Further details please contact Malcolm Poynter on 01635 521212 or malcolm.poynter@clmlaw.co.uk

Written by Malcolm Poynter

April 10th, 2015 at 10:38 am