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Monthly Update

December 2018

The December 2018 update is now available.

Topics this month:
  • Business Lease Renewal: Landlord and Tenant Act 1954, s30(1)(f) – Landlord’s intention and motive; Grounds of opposition – s30(1)(f) and building leases
  • Easements: Rights to use sporting or recreational facilities
  • Landlord & Tenant General: Forfeiture – Waiver of right to forfeit by exercise of CRAR
  • Long Leases: Assignment – Breach of covenant – Right to Manage; Extension of Leases – Leasehold Covenants – Good Faith – Unfair Contract Terms; Absolute Covenants – Breach of Covenants – Landlord’s Duties; Service Charges – Was the ‘management allowance’ a service charge within the meaning of s18(1) Landlord and Tenant Act 1985.
  • Mortgages: Mortgage fraud – Transfer into joint names – Mortgage against one set aside – Entitlement to equitable charge; Insolvency – Dissolution of company – Entitlement of individual co-mortgagor to vesting order
  • Property Transactions: Contract – Notice to complete
  • Solicitors Practice Points: SRA Handbook re-draft; Land Registry Practice Guide Updates

Summaries are below.

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Mediation

If you would like to make arrangements for me to mediate a property dispute please contact my assistant Rosie Torre (rosie@thepropertymediators.co.uk). I am a member of the specialist property mediation service at The Property Mediators. My full mediator profile together with those of my mediator colleagues are here.

Training

For details of property law training courses run by Property Law UK editors go to in-house courses page of the website.

The next update will be in the middle of February.

Seasons greetings and Happy New Year!

Gary Webber
17 December 2018

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Business lease renewal

Grounds of opposition - Section 30(1)(f) – Intention and motive – Landlord wants the tenant out

S Franses Ltd v Cavendish Hotel (London) Ltd
[2018] UKSC 62

Summary : Where a landlord’s only purpose in carrying out works is to obtain possession from the tenant, the landlord does not satisfy the test in s30(1)(f) that would allow it to oppose a new lease.

Grounds of opposition – Section 30(1)(f) – building lease

Santander UK plc v LPC Estates Ltd
[2018] EWHC 2193 (Ch)

Summary: Just prior to the Supreme Court decision in S Franses Ltd v Cavendish Hotel (London) Ltd [2017] EWHC 1670 QB the Court dismissed a renewed application for permission to appeal. The tenant’s argument that the appeal in this case might be affected by the S Franses case was rejected.


Easements

Rights to use sporting or recreational facilities

Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd
[2018] UKSC 57

Summary : Sporting or recreation rights (such as the right to use a golf course or tennis court) are capable of taking effect as easements. There was no legal impediment to the grant of such easements, so long as certain conditions were met (detailed below). Modern society’s approach to recreational and sporting activity is such that “the common law should support structures which promote and encourage it, rather than treat it as devoid of practical utility or benefit.”


Landlord and tenant (general)

Forfeiture - Waiver - CRAR

Thirunavukkrasu v Brar
[2018] EWHC 2461 (Ch)

Summary : The exercise of CRAR (Commercial Rent Arrears Recovery) under the Tribunals Courts and Enforcement Act 2007 (TCEA 2007) and the Taking Control of Goods Regulations 2013 (SI 2013/1894) after the tenant had failed to pay rent meant that the landlord had waived the right to forfeit for that breach.


Long leases

There are four cases this month:
  • Whether a covenant against assignment had been breached even though an assignment was not registered at the Land Registry?
  • Whether a covenant in the lease of one of two maisonettes could be enforced even though the corresponding covenant in the lease of the other had not been?
  • Whether a landlord was in breach of covenant by granting a tenant a licence to carry out works which would cause the tenant to be in breach of its covenants?
  • Whether an allowance for the lessor's management costs fell within the definition of “service charge” in the Landlord & Tenant Act 1985?

Assignment – Breach of covenant – Right to Manage

Reiner v Triplark Ltd
[2018] EWCA Civ 2151

Summary : A long lessee of a flat had breached a covenant against alienation where consent had not been granted by the lessor, irrespective of the fact that the registration of the assignment had not taken place.

The failure of the RTM company to give consent did not amount to an unreasonable withholding of consent where it had not complied with its obligation to give the lessor notice, thereby enabling the latter to object.

Extension of Leases; Covenants – Good Faith – Unfair Contract Terms

Jones v Roundlistic Ltd
[2018] EWCA Civ 2284

Summary : The Unfair Terms in Consumer Contracts Regulations 1999 reg 4(2), which disapplied the Regulations in respect of contractual terms that reflected "mandatory statutory or regulatory provisions" applied only to terms whose content was prescribed by the provision in question. It did not apply to terms in an extended lease which the parties had been obliged to include by the mechanism in the Leasehold Reform, Housing and Urban Development Act 1993 s57(1), but whose content they had agreed between themselves.

Absolute Covenants – Breach of Covenants – Landlord’s duties

Duval v 11-13 Randolph Crescent Ltd
[2018] EWCA Civ 2298

Summary : Where several leases covering a block of flats contained an absolute covenant requiring the lessees not to carry out certain actions, and a separate covenant requiring the landlord to enforce the absolute covenant at the request of any other lessee, the landlord would be in breach of the latter if they granted to a lessee a licence to carry out the prohibited action.

Service Charges – Definition of service charge

Anchor Trust v Waby
[2018] UKUT 370 (LC)

Summary : In the terms of a long lease, an allowance for the lessor's management costs did not fall within the definition of “service charge” within the s 18(1) Landlord and Tenant Act 1985 after the first year, since the basis of charge varied from the second year so as to be increased by reference to an external index and not by reference to the costs actually incurred or estimated.

The tribunal therefore lacked jurisdiction to determine applications relating to the amount of the management allowance.


Mortgages

There are two cases this month:
  • Whether a mortgagee was able to enforce an equitable charge
  • Whether a co-mortgagor of a leasehold property which had been held by a dissolved company and disclaimed by the Crown had enough of an interest to apply for a vesting order


Mortgage fraud – Transfer into joint names – Mortgage against one set aside – Entitlement to equitable charge

Santander UK Plc v Fletcher
[2018] EWHC 2778 (Ch)

Summary : Following a transfer into joint names, a joint mortgage was set aside for undue influence, but the lender was able to enforce an equitable charge over the fraudster’s beneficial interest.

Insolvency – Dissolution of company – entitlement of individual co-mortgagor to vesting order

Leon v HM Attorney-General
[2018] EWHC 3026 (Ch)

Summary : A co-mortgagor of a mortgage secured on leasehold property held by a company did not have a sufficient interest in the property in order to obtain a vesting order following the dissolution of the company and the disclaimer of the lease by the Crown.


Property transactions

Contract – Notice to complete

Cantt Pak Ltd v Pak Southern China Property Investment Ltd
[2018] EWHC 2564 (Ch).

Summary : A party serving a notice to complete need only be “ready, willing and able” at the time it gives the notice. There is no requirement for it to remain ready, willing and able throughout the notice period.


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