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CHANCEL REPAIR UPDATE

Chancel Repair liability will now cease to apply but only at the point of the first or next registration of a title after 12 October 2013 and following a Transfer made for valuable consideration.

This is not an end to chancel repair liabilty. Indiidual Church dioceses can still register potential liabilty against title but can only do so up to the point of first sale of a property for valuable consideration after 2013.

Therefore unless a property that is being acquired now has been the subject of a sale for valuable consideration since 12 October 2013 chancel repair liabilty insurance is still recommended.

How much delay deprives buyer of substantially the whole benefit of the contract?

The Court of Appeal has considered the effect of delay on a contract for a sale of a long lease of a flat that was to be built by a developer. Overturning the judge at first instance, the Court of Appeal held that, following Telford Homes (Creekside) Ltd v Ampurius Nu Homes Holdings Ltd [2013] EWCA Civ 577, it was impossible to conclude that a delay of approximately one month by the developer deprived the buyer of substantially the whole of the benefit of the contract so as to amount to repudiatory breach by the developer. This meant that the buyer had no right to terminate the agreement for lease.

The decision applies established law of contract and is a good illustration of the complexities of repudiatory breach and contractual time provisions.

Village Green Update

The new Growth and Infrastructure Act 2013 goes a little way to relieve some of the uncertainty that has existed around applications to register development sites as a village green.

Land may be registered as a village green if it has been used for recreational purposes for the preceding twenty years. Previously applications could also be made up to two years after the recreational use ceased.  The legislators have recognised that the Act has sometimes been used as a tool for frustrating development, even where there is little merit is such applications.

The Act reduces the two year cessasion period to one year. The Act also removes the right to apply to register land as village green where a defined Trigger Event occurs. Although consutlations are ongoing regarding further changes the most significant circumstances that would now comprise a Trigger Event are :-

1) When a planning application is first publicised.

2) When a development plan or neighbourhood plan consulations is drafted;

The right would again become exercisable if the Trigger Event circumstances ceased to apply.

Rent Increases permitted under Spending Review

In the spending review George Osborne announced that the Government will allow English Registerted Providers to increase rents by the Consumer Price Index measure of inflation plus 1% over 10 years from the year 2015/2016.   This will of course be a significant increase from the current limit of RPI plus 0.5% .

It is worth therefore bearing in mind when negotiating or considering the terms of Section 106 Agreements that Registered Providers are not caught out and separately tied in to the old rate of 0.5% and to ensure the terms of any such Agreements reflect the new Government proposals.

Time limit for submitting application for judicial review of planning decisions reduced

The Civil Procedure (Amendment No.4) Rules 2013 (SI 2013/1412) come into force on 1 July 2013.

Of particular interest is the amendment to Rule 54.5. The amended rule requires the claim form for an application relating to a planning decision to be filed within six weeks from the date when grounds for the application first arose. This is a reduction from the current time limit of three months.

The amendment does not apply to a judicial review application where the grounds arose before 1 July 2013.

Affordable Housing Guarantee Scheme opens for applications

On 20 June 2013, Housing Minister, Mark Prisk, announced, in a written ministerial statement, that the Affordable Housing Guarantee Scheme had opened for applications.

The government is making an initial £3.5bn available through Affordable Housing Finance (a newly formed subsidiary of the Housing Finance Corporation (THFC)). It will act as an aggregator of potential finance from the open market, and then offer loans to interested Registered Providers, backed by the government guarantee.

What should happen to a deposit when a statutory tenancy arises?

The Court of Appeal has confirmed that a fixed term assured shorthold tenancy (AST) which continues as a statutory periodic assured shorthold tenancy (statutory tenancy) under section 5 of the HA 1988, is a new tenancy. As a result, a deposit paid before 6 April 2007 and held by the landlord should be registered with a tenancy deposit scheme (TDS) when the statutory tenancy arises after that date. (Superstrike Ltd v Rodrigues [2013] EWCA Civ 669.)

Whether the tenant is entitled to a refund if the break date is between rent payment dates

Where the tenant exercised a break clause part-way through a quarter, having paid the rent for the full quarter, the High Court implied a term into the lease entitling the tenant to a repayment of the rent from the break date to the end of the quarter.

This decision is a departure from the widely-accepted view that, in the absence of an express provision, a tenant will not be entitled to a refund of any rent paid that relates to the period after a break date. (Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd and another [2013] EWHC 1279 (Ch).)

Court rules on due diligence obligation

In a recent case the Technology and Construction Court has refused permission to appeal against an arbitrator’s decision awarding damages against a developer that stopped work on a project for over a year.

The developer suspended work because the recession had rendered the project unviable, arguing that continuing would have been “commercial suicide”. The prospective tenants of the development alleged that this breached the parties’ agreement for lease, which included separate clauses requiring the developer to:

  • Carry out the works diligently (the diligence obligation).
  • Use all reasonable endeavours to ensure that the works were completed as soon as reasonably practicable (the completion obligation).

 The court agreed with the arbitrator that the developer had breached the diligence obligation. In doing so, the court held that the concept of diligence carried with it notions of “assiduity/expedition”  and that the developer’s two obligations stood separately, so that even if stopping work was not a breach of the completion obligation, it was still a breach of the diligence obligation.

The case demonstrates that that the Courts will strictly enforce the above standard provisions when interpreting Development Agreements and the onus is on Developers to complete developments irrespective of the wider economic circumstances.

The General Housing Consents 2013 published

The Department for Communities and Local Government has issued the General Housing Consents 2013. The consents, which came into force on 11 March 2013:

  • Set out the situations where the specific consent of the Secretary of State is not required before a local authority disposes of council housing land and associated assets.
  • Extend the freedom of local authorities in relation to the granting of leases and the disposal of reversionary interests.

Given that section 44 of the Housing Act 1985 provides that a disposal of a house without consent is void (unless it is a disposal of a single house to an individual), the only remedy for such a disposal is to make the disposal again with the consent since a section 32 consent cannot be given retrospectively.