Real Estate monthly digest - November 2018

Real Estate monthly digest pebbles
  • Submitted 3 December 2018
  • Applicable Law UK
  • Topic Real Estate

International Property Stock Exchange (IPSX): What is it? What can it do for investors and property owners?

This article discusses the upcoming launch of the International Property Stock Exchange (IPSX) and the opportunities it will provide for those in the real estate sector.

Please click here for further details.

Electronic Communications Code consultation: Ensuring tenants’ access to gigabit-capable connections

The Government has launched a consultation on “proposals to ensure that those who rent their homes or business premises are not prevented from getting access to or improving digital infrastructure by landlords failing to respond to requests from operators for permission to install or upgrade equipment.”

The consultation identifies that the Government has set an ambitious target “of making gigabit-capable networks available to 15 million premises by 2025, with nationwide coverage by 2033” and highlights the extent of this challenge by noting:

“The UK is a world leader in superfast connectivity with more than 95% of premises covered. However, next generation Fibre to the Premises (FTTP) - or “full fibre” - coverage is only 5%, where we lag behind current world leaders like South Korea (c.99%), and Japan (c.97%).”

As part of this challenge, and to look to address the priorities set out in the Future Telecoms Infrastructure Review (FTIR) published in July 2018, the Government is tackling barriers to deployment. Telecoms operators have informed the Government that obtaining the necessary consent from landowners to install equipment is one such barrier. The consultation identifies that the business model and physical installation process for gigabit capable broadband is inconsistent with a lengthy wait for landowner consent.

The consultation therefore sets out proposals to amend the Electronic Communications Code (the Code), which came into force in December last year, to encourage landlords to engage with operators. The proposals include:

  • Placing “an obligation on landlords to facilitate the deployment of digital infrastructure in their properties where a request for service has been made by the tenant and an operator has suitably notified that landlord”. The consultation emphasises that negotiation and agreement between operators and landlords remains the preferred route so seeks views on whether such an obligation would complement or undermine negotiated agreements.
  • Allowing operators to “seek entry to a property in order to install or upgrade electronic communications apparatus via the courts where a landlord fails in their obligation to facilitate the deployment of connectivity.” In England and Wales this court process would see operators able to seek a warrant of entry via a Magistrates’ court two months after first contacting a landlord. The consultation notes that this proposal would bring the telecommunications industry in line with other utility providers. The legislation would set out the requirements for such an application to be made (eg mode and frequency of attempts to contact the landlord).

The consultation stresses that use of the Magistrates’ court should be viewed as a means of securing temporary access and not as an alternative to formal long-term access agreements. The proposal is that the temporary access will remain active until such time as the landlord re-engages and a formal negotiated agreement is put in place. At this time the Tribunals in England and Wales, Scotland and Northern Ireland currently allocated to deal with this area would again be in play.

The consultation is open until 21 December 2018.

Electronic Communications Code cases: Compensation and access for surveys

In addition, two decisions in relation to the new Code have now been published.

In Elite Embroidery Ltd v Virgin Media Ltd [2018] UKUT 364 (LC), the Upper Tribunal (Lands Chamber) struck out a claim for compensation made under the new Code. The case concerned a fibre optic cable which had been laid in the wrong place at a site in Newcastle-upon-Tyne in the mid-1990s. The cable should have been laid under the pavement but was instead installed on land to the west of the pavement. Elite Embroidery Limited (Elite) acquired the land under which the cable had been laid for the purpose of erecting a factory and offices. When the existence of the cable was discovered, Elite’s project experienced additional costs, delay and loss while the project was redesigned so that the cable did not have to be moved. Elite sought compensation from Virgin Media under the new Code.

The Upper Tribunal found it had no jurisdiction in relation to the matter; it noted that all of the events in relation to the claim occurred whilst the old electronic communications code was in force and that the transitional provisions in relation to the old and new Codes mean that “the repeal of the old Code is without prejudice to any accrued right to compensation under it”. The Upper Tribunal does not have jurisdiction under the old Code and in relation to Elite’s claim it noted “[t]he claim itself appears to be a viable claim for damages for trespass or nuisance or for compensation under the old Code, but if so, it must be pursued elsewhere.”

In Cornerstone Telecommunications Infrastructure Ltd v University of London [2018] UKUT 356 (LC) a building owner refused to allow an operator access to inspect the building’s suitability as a site for electronic communications equipment. The owner did not want electronic communications equipment on the roof of its building. The Upper Tribunal (Lands Chamber) held it had the power under the Code to impose an agreement allowing the operator access to the building for the purpose of determining whether it is a suitable site for the installation of electronic communications apparatus. The first substantive decision given by the Upper Tribunal on the new Code includes the following points of note/findings:

  • A statement that the list of Code rights set out in paragraph 3 of the Code is “a menu rather than a description of a single right which must either be acquired in its entirety or not at all.”
  • The right to undertake a preliminary survey is a Code right.
  • Access to undertake a preliminary survey could be granted as an interim Code right (which requires a lower standard of proof than a permanent Code right).
  • It is not necessary for an operator to be seeking permanent Code rights in order to ask for an interim Code right.

Supreme Court decision: New species of easement recognised

In the recent decision of Regency Villas Title Ltd and others v Diamond Resorts (Europe) Ltd and another [2018] UKSC 57 (14 November 2018) a majority of the Supreme Court confirmed that the grant of purely recreational (including sporting) rights over land which genuinely accommodate adjacent land may be the subject matter of an easement, provided always that they satisfy the four conditions required for the creation of an easement. The easement provided for timeshare properties (which themselves had a recreational use and therefore benefitted from such rights) to use, amongst other things, a golf course, swimming pool and tennis courts.

The Supreme Court held the rights granted were to be viewed as a single easement to use all such recreational and sporting facilities as might be provided from time to time, rather than a series of separate easements only over those sporting and recreational facilities already in existence at the time of the grant.

The Supreme Court noted that “recreational and sporting activity… is so clearly a beneficial part of modern life that the common law should support structures which promote and encourage it, rather than treat it as devoid of practical utility or benefit.”

Housing design - new Government Commission but old idea? New Commission established to tackle poor-quality design of homes and places 20 years after the Urban Task Force was established for a similar purpose

In November 2018 the Government established the “Building Better, Building Beautiful Commission” and published its draft terms of reference. The purpose of the Commission is “to tackle the challenge of poor-quality design and build of homes and places, across the country, and help ensure, as we build for the future, we do so with popular consent”.

The Commission will gather evidence from the public and private sectors to “develop practical policy solutions to ensure the design and style of new developments, including new settlements and the country’s high streets, help to grow a sense of community and place, not undermine it”.

This initiative is reminiscent of the Richard Rogers led Urban Task Force which was established in 1998 by then Deputy Prime Minister, John Prescott. The purpose of the Urban Task Force was to “identify causes of urban decline and establish a vision for cities in England, founded on the principles of design excellence, social well-being and environmental responsibility within appropriate delivery, fiscal and legal frameworks”. Its findings were set out in the 1999 report “Towards an urban renaissance” with more than 100 recommendations which linked better design with sustainability and the strengthening of democratic local leadership and increased public participation.

Following the publication of the Urban Task Force’s report, the Commission for Architecture and the Built Environment (CABE) was created and its functions included design review. This preceded the establishment of the localism agenda which also followed on from the Urban Task Force’s report.

Since the days of the Urban Task Force and CABE there have been several revisions to the planning system through legislation and policy (such as the Planning and Compulsory Purchase Act 2004, which implemented provisions relating to spatial and sustainable development, the Localism Act 2011 dealing with decentralised decision making, the introduction of the National Planning Policy Framework and the consolidation of guidance in the “living document” Planning Practice Guidance) and building regulations. These have sought to address sustainable development, local decision making (so that people can influence the development of their local areas), the demand for housing (particularly affordable housing), urban regeneration, land assembly, new tenure types, the facilitation of co-living and purpose built private rented sector accommodation (notably through London Plan policies) and related matters. However, an enduring problem appears to be the ability of national and local government to deliver quality housing and places through policy and legislation.

Comment

Some cities successfully regenerated through the Urban Development Corporations in the late 1980s and early 1990s, and the Urban Task Force addressed the need for a coherent, well thought through approach to delivering an “urban renaissance”. However, there appears to have been a dearth of ideas as to how to deliver such aspirations, possibly as a result of the localism agenda pushing decision making to the local level where there is often less human and financial resource to deliver “big ideas”.

The Nationally Significant Infrastructure Regime has recognised, by implication, that nationally important infrastructure is not best addressed at the local level and has moved the decision making up to the national Government level. However, housing led development and place making initiatives are not part of that regime (although may be part of other infrastructure proposals, including mixed-use commercial led schemes) and for the time being are likely to remain outside it.

It is hoped that the Commission will make proposals that, when implemented, will secure progress in tackling the ongoing issue of design quality in housing and place making.

Breakfast briefing: Buildings and operational liabilities - are you covered?

Our November breakfast briefing looked at the operational responsibilities and associated liabilities of those parties who let, finance and manage real estate.

The session has a specific focus on recently constructed property and the options for recourse for the different parties where fire and life safety (FLS) issues subsequently arise. It also highlights the gaps where parties may find themselves exposed.

The briefing also covers the latest developments in relation to cladding systems, and in particular those which include Aluminium Composite Materials. The session addresses the challenges which may be faced where design and workmanship issues are identified during cladding related investigations.

The different roles insurance can play in relation to these issues is also discussed as well as practical steps which can be taken when these difficulties arise during the course of a transaction.

Simmons & Simmons partners John Kelsey and Felix Zimmermann are joined by David Lyle of Lockton to discuss these issues.

A recording of the session and accompanying materials can be accessed here.

Please also see the press release issued on 29 November 2018 by the Ministry of Housing, Communities & Local Government and The Rt Hon James Brokenshire MP which notes that the government is banning combustible materials on new high-rise homes and giving support to local authorities to carry out emergency remediation work. A further update on this will follow shortly.

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.