July 6, 2022
Our July 2022 summary of the latest developments in Property law and practice is as follows:
Building Safety Act 2022
After much scrutiny and debate, The Building Safety Act 2022 received Royal Assent on 28 April 2022. When fully in force, the Act will have a major impact on residential developers, building owners and property managers. The Act sees the creation of the role of Building Safety Regulator, strengthens the Regulatory Reform (Fire Safety) Order, provides new accountability and duties, and introduces competency standards and provisions to strengthen construction product regulations. The Act also provides further protection for leaseholders, from paying for remediations work for ‘relevant defects’ for which the landlord is responsible, under qualifying leases.
Residential Leasehold – Ground rents
The Leasehold Reform (Ground Rent) (Business Lease Notices) Regulations 2022 came into force on 30 June 2022. Under the Leasehold Reform Act 2022, ground rents above the level of a peppercorn in relation to new long leases of dwellings are abolished. However, under section 2 of the Act, business leases are excepted from the abolition, if:
- The terms of the leases expressly permit premises demised by the lease to be used for business purposes;
- The nature of the business purpose permitted by the lease is such that the use of premises significantly contributes to the business purpose; and
- At or before the grant of the lease, the landlord and tenant each give the other a written notice to the effect that they intend premises demised by the lease to be used, and to continue to be used, for the business purposes mentioned above.
For the exception to apply, notices must be given by each party. The Leasehold Reform (Ground Rent) (Business Lease Notices) Regulations 2022 deal with the form and content of the required notices. There is no prescribed form. Accordingly, the parties can draft as they see fit, so long as the form and content adheres to paragraph 3 of the regulations.
Business Rates – non-domestic premises in Wales
The Non-Domestic Rating (Amendment of Definition of Domestic Property) Order 2022 came into force on 14 June 2022 and amends the definition of a domestic premises. This will be of great relevance to holiday homeowners in Wales – the new regulations alter the business rates criteria for self-catering accommodation in Wales from 1 April 2023. The periods for which the premises must be let was previously 10 weeks in a year, which will now be increased to 26 weeks in the year. This means that many holiday homes that previously qualified as non-domestic premises will cease to qualify. In England, the threshold for intending to let a dwelling remains at 140 days.
Fire Safety Order
The Fire Safety Act 2021 (Commencement) (England) Regulations 2022 came into force on 16 May 2022 and bring into force in England section 1 of the Fire Safety Act 2021, which in turn amends article 6 of the Regulatory Reform (Fire Safety) Order 2005, to cover domestic premises where a building contains two or more sets of domestic premises. As a result, the 2005 Order will apply to the building’s structure and external walls, any common parts, and all doors between the domestic premises and common parts.