Insights Commercial Property Law – Key Considerations (January 2021)

The Covid-19 outbreak and the unprecedented requirement for social distancing continues to present never-before seen contractual issues and logistical problems in the property market, the majority of which we are carrying forward with us into the new year and beyond.

Our January 2021 summary of the latest developments in Property law and practice is as follows:

The extended time period for giving a notification to HMRC of a VAT option to tax land and buildings during the COVID-19 crisis has been extended again. The time limit for notifying an option to tax is normally 30 days from opting to tax. This has been extended by HMRC to 90 days from the date the decision to opt was made. The extended notification procedure will now apply to all decisions made between 15 February 2020 and 31 March 2021.

In R (Rights: Community: Action) v Secretary of State for Housing, Communities and Local Government [2020] EWHC 3073 (Admin), the High Court has rejected an application for judicial review of three sets of planning regulations, including the Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 (SI 2020/757).

The Use Classes amendment order makes major changes in England to the Town and Country Planning (Use Classes) Order 1987 (as amended), including the introduction of three new use classes in England, including the wide-ranging Class E (Commercial, Business and Service). The amendment order took effect on 1 September 2020.

However, it is understood that the claimant action group intends to apply for permission to appeal the High Court decision on at least one of its original grounds (i.e. that the regulations should have been the subject of an environmental assessment before being made). The prospect of a further challenge creates a period of uncertainty.

The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2020 (SI 2020/1226) came into force on 16 November 2020 and provides relief from CIL for ‘first homes.’ The proposals involve schemes to provide homes for first-time buyers with a 30% discount against market value. When in force, ‘first homes’ policies can require developers to provide discounted housing for first-time buyers through planning obligations under section 106 of the Town and Country Planning Act 1990. The Government’s latest response points out that ‘first homes’ can already be exempt from CIL under discretionary relief. However, the amendment to the CIL Regulations extends existing mandatory social housing relief to include such homes, thereby creating a level playing field between different types of affordable housing.

The Land Registry’s website has uploaded a blog advising practitioners of the Land Registry’s aim of moving towards a form of digital identification of the parties to a registrable transaction. This would involve creating an HMLR standard in identity checking, the adoption of which would mean that there could be no question of not having done sufficient checks to verify the identity of an applicant and therefore no risk of Land Registry recourse against that conveyancer for negligence in identity checking. Other forms of client identification would still remain open for applicants.