Real Estate monthly digest - July 2019

Summary of the developments impacting the world of Real Estate.
  • Submitted 1 August 2019
  • Applicable Law UK (England & Wales)
  • Topic Real Estate

Labour Intensive - A High Impact Scenario

With Boris Johnson now installed as Prime Minister, attention turns to his first 100 days and the material possibility of a Labour-led government by its end. Our latest scenario analysis shows a 70% chance of a General Election before 31 October 2019 (Johnson’s day 99) within which a 28% chance of a Labour-led government. In this article we have brought together our specialist team of leading lawyers and financial markets experts to look in detail at the Labour Party programme and its possible implications for all stakeholders in UK assets.

Please click here to read the article.

Draft Registration of Overseas Entities Bill - Government issues response to Joint Committee Report

The Government has issued its response to the May 2019 Joint Committee report on the Draft Registration of Overseas Entities Bill. Once enacted, the Bill will introduce a publicly accessible register of beneficial owners of overseas entities which own property in the UK (the Register).

The Government’s response indicates that it will not be taking forward all of the Joint Committee’s recommendations. However, the need for detailed guidance, reform of Companies House, a consideration of further civil penalties in addition to criminal sanctions for breach of the Act, and revisiting the updating requirements of the Register all appear to be on the Government’s agenda.

It remains unclear as to whether any form of appeal process is being considered for those who find themselves unable to register a transaction where the overseas entity selling the property was not compliant with the registration requirements at the time of the sale.

Further commentary can be found here.

The end of the AST?

The Government announced in April 2019 that it intended to remove the Section 21 “no fault” eviction process in relation to assured shorthold tenancies and strengthen the grounds for eviction under Section 8 of the Housing Act 1988. On 21 July 2019, the Government launched a consultation on the proposed changes.

In the executive summary the Government notes that it intends to “remove section 21 by removing the assured shorthold tenancy regime”. The consultation seeks views on:

  • the impact of removing assured shorthold tenancies, and whether there are any circumstances in which a tenancy should be ended without the tenant being at fault
  • whether the reforms should relate to all those who use the Housing Act 1988 - in both the private and social sectors
  • how existing grounds for possession covered by Schedule 2 of the Housing Act 1988 can be used effectively or reformed in the future once section 21 is no longer available and how new grounds should be added to cover the landlord selling or moving into the property, and
  • how the courts could consider applications for possession orders under section 8 of the Housing Act 1988 more efficiently.

The consultation runs until 12 October 2019 and the proposals relate to England only.

Electronic Communications Code - what’s your intention?

A new Electronic Communications Code came into force on 28 December 2017. This new Code was intended to be more operator friendly and contains provisions which should result in lower rents being charged to operators.

In EE Ltd and Hutchison 3G UK v Meyrick, a landowner attempted to resist the imposition of Code rights on the basis that it (a) intended to redevelop its land, and (b) would not be able to carry out the redevelopment if the Code rights were granted, but was unsuccessful.

The proposed redevelopment in this case involved the removal of the operator’s existing mast and the installation of a new mast owned by the landowner. The landowner’s position was that it wished to establish a fixed wireless broadband service across its estate and needed a new, taller mast to do this. However, as the Upper Tribunal (UT) noted, electronic communications equipment is specifically excluded from the definition of “land”, so a landowner who provides their own mast cannot be subject to Code rights and “can demand whatever consideration they choose, and impose whatever terms they wish”.

The UT noted the landowner could resist the claimant’s application “only if they can demonstrate both that they have a reasonable prospect of being able to carry out their redevelopment project and that they have a firm, settled and unconditional intention to do so. If they intend to do so purely in order to prevent the Claimants from getting Code rights then they will fail.” The UT found that while the landowners had a reasonable prospect of implementing the proposed redevelopment scheme, they did not have the requisite intention. It was held that the redevelopment plans were “conceived in order to defeat the claim for Code rights”.

For more details please click here.

EE Ltd and Hutchison 3G UK v Meyrick 1968 Combined Trust of Meyrick Estate Management [2019] UKUT 164 (LC)

The end of a frustrating argument…

On 04 July 2019, the European Medicines Agency (EMA) announced it had reached an agreement to sublet all of the premises it had leased at Canary Wharf. As part of this announcement the EMA also confirmed it was dropping its appeal against the High Court decision that Brexit did not amount to a frustrating event that would bring the 25 year lease to an end.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.