September 29, 2020
Our August 2020 summary of the latest Commercial Property law updates and considerations is as follows:
The Land Registry now accepts electronic signatures on deeds effecting a registrable disposition of land. This change will apply “until further notice” and is in addition to the Land Registry’s recent announcement of the acceptance of the deeds executed by use of the Mercury signing approach. More information can be found at https://www.gov.uk/government/publications/execution-of-deeds
Community Infrastructure Levy: Discretion to allow deferral
The insertion of Regulation 72A into the Community Infrastructure Levy (Coronavirus) (Amendment) (England) Regulations 2020 relates to persons with financial difficulties for reasons connected with the effects of the Coronavirus and enables them to request a deferral payment of the CIL amount (whether in full or by instalments) until 31 July 2021. The collecting authority has the discretion to “consider it is appropriate in the circumstances” and if granted, the deferral would apply for a maximum of six months.
SDLT (non-UK Residents)
HMRC have confirmed that a 2% SDLT residential surcharge, for non-UK residents purchasing residential property (with an effective date from 1 April 2021) will apply to freehold and leasehold purchases of residential property and will be at a rate of 1% on top of all existing SDLT rates, including the rates applicable to the rental element of leasehold property.
Insolvency – Equitable liens
The Solicitors Regulation Authority have raised concerns on paying a contract deposit directly to a seller, or to its agent, where the seller’s title is already charged and provided the following comment:
“We are seeing cases of solicitors simply processing transactions for buyers and adopting the language of conveyancing…referring to them as deposits is part of the psychology of presenting a risky ‘investment’ as routine conveyancing. Clients are actually paying their money into often high-risk property development, and substantial losses have been suffered. You should ensure that clients fully understand the risks.”
Extending Planning permissions
The Business and Planning Act 2020 includes a number of provisions which will assist development by operating to extend development consents in England to 1 May 2021. Section 17 B&PA 2020 inserts a new section 93A into the Town and Country Planning Act 1990. It provides that, where planning permission granted in England is subject to a condition requiring development to commence not later than a date between 20 August 2020 and 31 December 2020, the condition is deemed to provide instead that the development must be begun not later than 1 May 2021. Further provisions apply (section 93B TCPA 1990) where environmental assessments are required.
Reforming Leasehold Property Ownership
The Law Commission has published three reports designed to pave the way to a reform of residential leasehold property ownership in England and Wales in an attempt to remedy some of the deficiencies and unfairness of leasehold ownership that have been highlighted in recent times both in various government consultations and in the legal and national press. Full analysis of these proposals can be postponed until the Government commits to legislating to give effect to the measures proposed. However, headline points in the recommendations of the Law Commission include allowing enfranchisement and the right to manage to apply to buildings that have up to 50% non-residential space (instead of the current limit of 25%); allowing tenants to exercise a right to extend a lease, either of a flat or a house, to obtain a new 990 year lease (instead of the current 90 year extension for flats or 50 year extension for houses); and reforming the rules relating to commonhold to address fundamental concerns of institutional lenders.