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Monthly Update

February 2019

The February 2019 update is now available.

Topics this month:
  • Co-ownership: Declaration of trust – oral statements
  • Long Leases: Covenants – alterations – extent of “elevations”; Administration charges – legal costs – waiver of forfeiture; Service charges – Qualifying Long-Term Agreements
  • Mortgages: Property sold by mortgagee – sale in a portfolio – duty of care; Sale at undervalue – connected sale – marketing and valuation evidence
  • Planning: Compulsory purchase – time limits – ability to grant extension; Highways – Extent of vertical plane transferred from one highway authority to another
  • Property Transactions: Lease clause – misrepresentation; Land Registration – forged documents – mistake; Land Registration – fraud – adverse possession
  • Residential Tenancies: Assured Shorthold Tenancies – Housing Act 1988 – Section 21 notices; Property damage – Rent suspension clauses – interpretation
  • Solicitors Practice Points: SDLT Filing period; Conveyancing Protocol & CQS; Reservation Agreements; Referral Fees


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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
12 February 2018

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Co-ownership

Declaration of trust - Oral statements

Hilton v Cosnier
[2018] EWHC 3728 (Ch)

Unsuccessful appeal – the District Judge had been correct to hold that an oral statement, allegedly made by the deceased prior to his death, had not created a trust in favour of his grandchildren in respect of a property.


Long leases

There are three cases this month:
  • Whether a covenant against alterations to “elevation” applied to the rear of the building as well as the front
  • Whether a landlord had waived the right to forfeit a lease and the effect of any waiver on the landlord’s ability to recover its costs of earlier proceedings
  • Whether a management agreement amounted to a qualifying long-term agreement

Covenants against alterations - Extent of “elevations”

Triplerose Limited v Patel
[2018] UKUT 374 (LC)

A covenant against alterations to the “elevation” of a building was broken where alterations were made to the rear, as well as the front, of the building.


Administration charges - Legal costs - waiver of forfeiture

Stemp v 6 Ladbroke Gardens Management Limited
[2018] UKUT 375 (LC)

The First Tier Tribunal was able to determine whether or not a landlord had waived the right to forfeit and the effect of any waiver on the landlord’s ability to recover its costs of earlier proceedings under section 27A of the Landlord and Tenant Act 1985. A landlord can waive the right to forfeit a lease even before it has obtained the ability to exercise its right to forfeit under section 81 of the Housing Act 1996.


Service charges - Qualifying Long Term Agreements

Bracken Hill Court at Ackworth Management Company Limited v Dobson
[2018] UKUT 333 (LC)

The Upper Tribunal determined whether a management agreement amounted to a qualifying long-term agreement.


Mortgages

Property sold by mortgagee as part of a portfolio - Duty of care

McDonagh v Bank of Scotland Plc
[2018] EWHC 3262 (Ch)

The court reviewed the principles to be applied in considering whether receivers had breached their duty to the mortgagor in selling the mortgaged property as part of the portfolio, rather than individually.


Sale at undervalue - Connected sale - marketing and valuation evidence

Philbin v Davies
[2018] EWHC 3472 (Ch)

The court set aside a statutory demand based on a shortfall debt following the repossession and sale of mortgaged properties, on the basis that there was credible evidence that the mortgagee had failed to obtain the best price reasonably obtainable on a sale to a connected company.


Planning

There are two cases this month:
  • Whether the Tribunal had the power to extend the time limit for the service of a counter-notice to a Notice to Treat
  • Whether a transfer between highway authorities operated to transfer the entire interest in the vertical plane of the highway or only such part of the area above and below the highway as was necessary for its use and operation as a highway

Compulsory Purchase and Compensation - Notices to Treat and General Vesting Declarations

Anixter Limited v Secretary of State for Transport
[2018] UKUT 405 (LC)

The Tribunal did not have the power to extend the 28-day time limit for the service of a counter-notice to a Notice to Treat (pursuant to Schd.2A Pt 1 para.5 of the Compulsory Purchase Act 1965).


Highways Law - Extent of vertical plane transferred from one highway authority to another

London Borough of Southwark v Transport for London
[2018] UKSC 63

A transfer of ownership of a road from one highway authority to another, under article 2(1)(a) of the GLA Roads and Side Roads (Transfer of Property etc) Order 2000 (SI 2000/1552) (“art.2(1)(a)”, “the Transfer Order”) (for these purposes identical to section 265 of the Highways Act 1980 (“s265”)), has the effect of transferring all of the vertical plane vested in the transferring authority at the relevant date, insofar as ownership was vested in that authority in its capacity as highway authority.


Property transactions

There are three cases this month:
  • Whether an acknowledgement in a lease that the tenant had not entered into the lease in reliance on any representation made by or on behalf of the landlord was unreasonable?
  • Whether entries on the Land Register obtained using forged documents was “a mistake” capable of being corrected?
  • Whether a person who has fraudulently become the registered proprietor of land can subsequently acquire title to the land by adverse possession?

Lease Clause - Misrepresentation - non-reliance clause - unfair contract term

First Tower Trustees Ltd v CDS (Superstores International) Ltd
[2018] EWCA Civ 1396

An acknowledgement in a lease that the tenant had not entered into the lease in reliance on any representation made by or on behalf of the landlord was unreasonable and thus did not exclude the landlord’s liability for misrepresentation in replies to preliminary enquiries.


Land registration - Correction of mistake

Antoine (Administrator of the estate of Joseph Antoine deceased) v Barclays Bank plc
[2018] EWCA Civ 2846

The noting on the Register of a proprietor who had obtained a court vesting order through the use of forged documents was not “a mistake” that could be corrected by the court under paragraph 2(1)(a) of Schedule 4 to the Land Registration Act 2002, and the same applied to a registered charge entered into by that proprietor.


Land registration - Fraudulent registered proprietor acquiring title from true owner by adverse possession

Rashid v Nasrullah
[2018] EWCA Civ 2685

A person who has fraudulently become the registered proprietor of land can nonetheless acquire title to the land by adverse possession and thus prevent the true owner from recovering the land.


Residential tenancies

There are two cases this month:
  • Whether the requirement in section 21(1)(b) of the Housing Act 1988 for a section 21 notice to be served by a landlord entitled a superior landlord to serve such a notice?
  • Whether a rent suspension clause in a tenancy agreement had come into effect?

Assured Shorthold Tenancies - Section 21 notices

Barrow v Kazim
[2018] EWCA Civ 2414

A s21 notice under the Housing Act 1988 cannot be served by a superior landlord during the term of a mesne tenancy.


Property damage - Rent suspension clauses

Baillie v Savage
[2018] EWHC 3035 (Ch)

The High Court determined the correct interpretation of a rent suspension clause in circumstances where a property was rendered uninhabitable by a risk of a wall collapsing in the future.


Solicitors' Practice Points

There are four points this month:
  • SDLT Filing period
  • Conveyancing Protocol & CQS
  • Reservation Agreements
  • Referral Fees

SDLT Filing period

For property transactions with an ‘effective date’ on or after 1 March 2019, the time limit for filing a stamp duty land tax (SDLT) return and paying the tax due will reduce from 30 to 14 days.

However, the current 30-day filing window will continue to apply in the following circumstances where a further return is required:
  • A transaction that involves contingent, uncertain or unascertained consideration becomes notifiable again following new information;
  • A transaction involving one of certain SDLT reliefs is followed by a later linked transaction and a further return is required for the earlier transaction due to withdrawal of relief. A lease continuing after a fixed term requires a further return as a result of the continuation;
  • An indefinite lease continuing after a deemed fixed term requires a further return; and
  • In the first five years of a lease with rent that was contingent, uncertain or unascertained, the rent becomes certain, triggering a further return.

Law Society Conveyancing Protocol & CQS

The Law Society is undertaking a review of the Protocol and it is anticipated that the revised version will be issued during 2019.

CQS firms are also expected to be subjected to a higher degree of scrutiny as a result of anticipated changes to CQS expected this year.


Referral Fees

The Government has announced that it will soon publish guidance on when estate agents should disclose referral fees. In making the announcement the Housing minister said: “I expect this means an end to excessive referral fees. If behaviour does not change, I will look to the case for a ban”


Reservation Agreements

The government has announced that it is developing standard reservation agreements to reduce the number of failed property transactions and intends to run a trial of those reservation agreements this year.

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