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Monthly Update

February 2020

The February 2020 update is now available.

Topics this month:
  • Landlord and Tenant (General): Forfeiture - Waiver of right to forfeit by exercise of CRAR; Commercial Lease - breach of the covenant for quiet enjoyment - offer of compensation.
  • Long Leases: Landlord and Tenant Act 1987 - First Refusal - exempt transactions; Service charges - appointment of a manager; Service Charges - interpretation of “Right to Buy” long leases; RTM Companies - service charges.
  • Mortgages: Leasehold property held by company subject to mortgage - dissolution of company - bona vacantia - disclaimer of lease - entitlement to vesting order; Commercial mortgage loans; Secret commission - remedies - set-off;
  • Property Transactions: Contract – “subject to contract”; Appointment of a manager under Part II of the Landlord and Tenant Act 1987 – effect of subsequent disposal for value.
  • Public access: Town or village greens - statutory incompatibility
  • Solicitors Practice Points: Money Laundering and Terrorist Financing (Amendment) Regulations 2019 – Law Society Guidance

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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 March.

Gary Webber
6 February 2020

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Landlord and Tenant (general)

Forfeiture - Waiver of right to forfeit by exercise of CRAR
Brar v Thirunavukkrasu
[2019] EWCA Civ 2032

The exercise of CRAR (Commercial Rent Arrears Recovery) under the Tribunals Courts and Enforcement Act 2007 (2007 Act) 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 the failure to pay that rent.

Commercial lease - Breach of the covenant for quiet enjoyment
Jafari v Tareem Limited
[2019] EWHC 3119 (Ch)

The High Court examined the relevance of an offer of compensation to the question of whether a landlord was in breach of the covenant for quiet enjoyment.


Long Leases

There are four cases this month;
  • Whether costs incurred by a statutorily appointed manager were recoverable
  • The High Court examined the relevance of an offer of compensation to the question of whether a landlord was in breach of the covenant for quiet enjoyment.
  • Whether the leaseholders under “Right to Buy” leases were liable to contribute to the landlord’s costs of repairing structural defects.
  • Who was entitled to receive payment of Service Charges

Landlord and Tenant Act 1987 - First Refusal - Exempt transactions
York House (Chelsea) Ltd v Edward Thompson
[2019] EWHC 2203 (Ch)

A husband and wife who are the joint freeholders of a block of flats, granted a number of leases of various parts of that block to one or other of themselves. These were found to be disposals which were exempt from the provisions of part 1 of the Landlord and Tenant Act 1987 (‘the 1987 Act’), either because these were gifts to family under s.4(2)(e) or disposals within a family under s.4(2)(h).

Service charges - Appointment of a manager
Chaun-Hui v K Group Holdings Inc
[2019] UKUT 371 (LC)

The Upper Tribunal considered the status of service charges recovered by a manager appointed under s24 of the Landlord and Tenant Act 1987.

Service Charges - Interpretation of long leases
The Mayor and Commonality and Citizens of the City of London v Various Leaseholders of Great Arthur House
[2019] UKUT 341 (LC)

The Upper Tribunal determined, by reference to the interpretation of the specific terms of various “Right to Buy” leases, whether the leaseholders were liable to contribute to the landlord’s costs of repairing structural defects.

RTM Companies - Service charges
Firstport Property Services Ltd v Settlers Court RTM Co Ltd
[2019] UKUT 243 (LC)

Gala Unity Ltd v Ariadne Road RTM Co Ltd [2012] EWCA Civ 1372 was not decided per incuriam, nor was the Court of Appeal’s reasoning leading up to that decision demonstrably wrong. Difficulties certainly can arise from an RTM Company acquiring a right to manage appurtenant property in conflict with the existing management company, but these arise from the Commonhold and Leasehold Reform Act 2002 itself and not the court’s interpretation of the Act.


Mortgages

There are two cases this month:
  • Who was entitled to a Vesting Order following disclaimer of lease subject to a mortgage?
  • The High Court considered a number of claims including whether a witness had to sign a mortgage in the presence of the borrower.

Leasehold property held by company subject to mortgage - Dissolution of company - bona vacantia - disclaimer of lease - entitlement to vesting order
Leon v HM Attorney General
[2019] EWCA Civ 2047

The Court of Appeal dismissed an appeal against an order made by the High Court (on appeal from the Chief Master) and held that a vesting order should not have been made in favour of a co-mortgagor (but not a co-owner) of leasehold property subject to mortgage. Instead a vesting order would be made in favour of the mortgagee.

Commercial mortgage loans - Secret commission – remedies - set-off
Wood v Commercial First Business Ltd (in liquidation)
[2019] EWHC 2205 (Ch)

The High Court allowed certain claims involving secret commissions paid by a commercial mortgage lender to a broker but dismissed a number of other claims.

Property transactions

There are two cases this month
  • Whether Heads of Terms headed “subject to contract” were legally binding?
  • Whether a purchaser for value of land subject to a management order under Part II of the Landlord and Tenant Act 1987 takes free of the management order?

Contract - “Subject to contract”
Farrar v Rylatt
[2019] EWCA Civ 1864

Heads of Terms headed “subject to contract” were not legally binding, as there was no suggestion that the “subject to contract” tag applied to some provisions but not to others.

Appointment of a manager under Part II of the 1987 Act - Effect of subsequent disposal for value
Urwick v Pickard
[2019] UKUT 365 (LC)

On registration, a purchaser for value of land subject to a management order under Part II of the Landlord and Tenant Act 1987 takes free of the management order, whether or not the order is noted on the title.

Public access

Definitive maps and statements - Sufficiency of evidence for order adding rights of way
R (on the application of Roxlena Ltd) v Cumbria County Council
[2019] EWCA Civ 1639

The Court of Appeal dismissed a landowner’s appeal from Kerr J’s order of 30 November 2017 dismissing its claim for judicial review of the Council’s decision of 4 January 2017 to modify the definitive map and statement to add 34 footpaths and extend a bridleway over the landowner’s land.


Public Access

Town or village greens - statutory incompatibility
R (Lancashire County Council) v (1) Secretary of State for Environment, Food and Rural Affairs (2) Janine Bebbington;
and
R (NHS Property Services Limited) v (1) Surrey County Council and (2) Timothy Jones
[2019] UKSC 58


The Supreme Court, by a 3:2 majority, allowed appeals from the Court of Appeal and quashed the registration as a TVG of land adjoining a primary school in Lancaster and of land adjoining Leatherhead Hospital.

The issue common to both appeals was whether the concept of statutory incompatibility between the purposes for which the land is held by a statutory undertaker and registration as a TVG defeated an application to register under s15 of the Commons Act 2006.

The Supreme Court was divided on the interpretation of the court’s decision in R (Newhaven Port and Properties Limited) v East Sussex County Council [2015] UKSC 7 that the duty to register did not extend to a beach forming part of Newhaven Harbour held under specific statutes relating to its operation as a working harbour.


Solicitors Practice Points

Money laundering - Law Society Guidance
The Money Laundering and Terrorist Financing (Amendment) Regulations 2019

These regulations are now in force.

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