Real Estate Bulletin - September 2018

Real Estate Bulletin - September 2018

Real Estate Bulletin - September 2018

Welcome to the September 2018 edition of the real estate bulletin - an e-bulletin from the Real Estate group at Stevens & Bolton LLP.

A link to the web version of this email update is available here. If you would like to receive these updates via email, please subscribe.

Contact our experts for further advice

View profile for Richard WilkinRichard Wilkin, View profile for Daryl RiveroDaryl Rivero
  1. Retail: Pop ups

    Rebecca Walker and Helen Wheddon provide some insight and expertise to retailers on the risk and rewards of trading by way of a ‘pop up’ store in their recent article published in FashionCapital. Read more

  2. "Smash and grab" adjudications and the right to adjudicate the "true value" - a significant change in approach by the TCC

    Grove Developments Limited v S&T (UK) Limited [2018] EWHC 123 (TCC) In what is likely to be his last substantial judgment in the Technology and Construction Court (TCC) before his elevation to the Court of Appeal,  Coulson J handed down a... Read more
  3. Landlord's consent to assign

    Landlord's consent to assign - the landlord's decision must be reasonable, but not necessarily all the reasons   Landlords considering tenant applications for consent to assign, underlet, charge or part with possession are generally subject to... Read more
  4. UK government publishes draft legislation to identify overseas beneficial owners of UK property

    Two years ago David Cameron announced plans to introduce a register of overseas entities owning UK land (the Register), with the objective of identifying and recording overseas entities who transact in UK real estate to prevent and combat those entities... Read more
  5. Proposed register of beneficial owners of overseas companies and other legal entities

    How it may affect property transactions in England and Wales   Who needs to know about these proposals? overseas companies and other legal entities that own or are intending to acquire UK property; and anyone dealing with such overseas... Read more
  6. Purchaser considerations when buying property from a company in administration

    Partner and Co-Head of the Restructuring & Insolvency practice at Stevens & Bolton LLP, Tim Carter, has recently contributed a practice note to LexisNexis which looks at the practical considerations purchasers should bear in mind when buying real... Read more
  7. Minimum Energy Efficiency Standards (MEES)

    Minimum Energy Efficiency Standards (MEES) apply to both residential and commercial properties but the two regimes are different - this briefing covers commercial properties, described by the regulations as “non-domestic” properties. What is... Read more
  8. MEESly claims? What do Minimum Energy Efficiency Standards (MEES) mean for dilapidations claims for commercial property?

    Landlords and tenants have been preparing to navigate the MEES regulations for some time, but since the regulations now apply to all new leases landlords and tenants can expect arguments about the MEES obligations to form part of the discussion over dilapidations at the end of the lease.

    Read more
  9. Contaminated Land

    The Contaminated Land Regime applies to all land, regardless of use. It can affect owners, occupiers, developers and lenders. Liability under the legislation is retrospective as well as prospective.

    Local authorities have a duty to continue to inspect their areas to identify contaminated land. They (or the Environment Agency or Natural Resources Wales (“NRW”) in some cases) can require the removal or other remediation of contamination. Remediation can be costly, and may result in costs that exceed the value of the property. In addition, the possibility of contamination may make the property difficult (or even impossible) to sell, let or mortgage.

    Who is liable?
    Liability falls primarily on the company or other person who caused or knowingly permitted the presence of a substance in, on or under land such that the contamination is posing significant harm or a significant possibility of significant harm to human health, water, property or designated ecological sites such as sites of special scientific interest (“Class A person”). Class A persons are liable for remediating the property and off-site migration of contaminants.

    If the authority cannot identify a Class A person, liability falls on the current owner or occupier of the land (including lenders in possession) (“Class B person”). Class B persons are liable for remediating the property. In simple terms, if a Class A person cannot be found by an enforcing authority after “reasonable enquiry”, the owner or occupier of the land (a Class B person) is liable.

    There are complex exclusion provisions for transferring liability from one person to another.

    The regime applies to the transfer of the freehold or the grant or assignment of a lease of over 21 years.

    Investigations
    There are broadly two ways for a potential buyer to establish the potential of contamination.

    Enquiries of the current owner/tenant
    We will make enquiries of the current owners/tenants relating to a variety of environmental issues. However, sellers are often reluctant to reply to such enquiries, expecting you to rely on your own independent investigations.

    Searches
    We will obtain a search (often called an “environmental desktop report”). This will provide:

    • information from the statutory registers kept by the Environment Agency, NRW, local authorities, Natural England and various other sources; and
    • basic information such as past and current land use, nearby landfills, pollution incidents, and whether the land has a nature conservation designation.

    The cost of a search varies from £250 to £400 plus VAT depending on the complexity of the report. We will order the type of search that we consider appropriate to the property you are acquiring.

    In addition you should inspect the property carefully, alerting us to any activity or occurrence which may indicate that contamination is present (e.g. dead areas of vegetation, leaking containers or pools of chemicals).

    It is important to note that these enquiries and searches will not provide a simple answer to the question “Is the land contaminated?” Even if the results give no indication of contamination, this does not guarantee the property is not contaminated. The reports from commercial search companies are compiled solely from paper records, with no inspection of the site itself.

    Interpretation of search reports and replies to enquiries
    We are not surveyors or environmental consultants and are therefore unable to advise on whether the results of the initial searches and enquiries necessitate a full site investigation. However, those results will indicate whether you should instruct environmental consultants. Such consultants will provide interpretation and guidance on the advisability of an in-depth desktop study and/or intrusive investigations. Once you have reviewed the environmental desktop report, please let us know if you are commissioning further investigations or wish us to do so on your behalf.

    Risks in particular transactions

    Selling:
    Selling property, whether freehold or leasehold, will not automatically absolve you from liability under the contaminated land regime. If you have caused contamination or if you have knowledge of contamination at your property and have not remediated it, you can, in most cases, transfer your remediation liabilities. If this situation applies to you, please let us know so we can discuss how to transfer those liabilities. We have specialist environmental lawyers who are able to advise and draft the necessary documents.

    Buying:
    We will undertake the enquiries and searches outlined in this note. If, as a result of those investigations and the advice of your surveyor or environmental consultant it seems there is a risk of contamination, then let us know as you may decide not to proceed at all or, if you do proceed, the terms on which you do so may be affected.  Again, we have specialist legal experts who can advise you on the legal consequences of any issues arising from the technical information revealed by your investigations and provide guidance on the most appropriate way forward.

    Leases:
    You should not assume that just because you are a tenant, you have no liability for contamination. You will be liable for any contamination you cause or knowingly permit. In addition you may be liable as a Class B person. Further, a lease may allocate liability for remediating pre-existing, as well as future, contamination on the tenant.

    Other liabilities
    This note covers only the contaminated land regime. Whilst this is the key environmental concern when transferring rights in real property, other environmental legislation may also apply depending on the environmental condition of the property.

     

    The information contained in this guide is intended to be a general introductory summary of the subject matters covered only. It does not purport to be exhaustive, or to provide legal advice, and should not be used as a substitute for such advice.

    © Stevens & Bolton LLP May 2018

  10. A guide to successful development: Easements

    Easements which have not been properly investigated or understood have the capacity to sterilise development of land.  This note explains briefly what easements are, examines why they might be important to a developer and considers what can be done... Read more
  11. Disputes: Know your client

    For those with a Prime Resi subscription, Naomi Campbell looks at the effects a recent Court of Appeal ruling on property fraud will have on estate agents, particularly those involved in acting for purchasers in conveyancing transactions. Read more

  12. Real estate advice

    Stephen Rockhill is a regular contributor to The Times and Sunday Times. For those of you with a subscription to The Times his insights include answers to the questions:

    Can you claim for loss of light? - Read more

    Can’t safely back out of your driveway? - Read more

  13. For your diary

    We’re excited to announce two upcoming events in November, so feel free to save the dates and further details will be made available closer to the time.

    Real Estate Development Workshop
    22 November

    One Great George Street, London

    CPD Seminar
    29 November

    Harbour Hotel, Guildford

  14. Lawyer in the spotlight

    Ben Willis, who has recently joined our Construction team as a Managing Associate after 10 years at Womble Bond Dickinson, gives us an insight into his life outside law…

    If you weren’t a lawyer, what would you be?
    When I was young I really wanted to be a palaeontologist. I always fancied going round the world digging up dinosaurs!

    What was the last book you read and would you recommend it?
    Total Competition: Lessons in Strategy from Formula One by Ross Brawn and Adam Parr. A fascinating insight into F1 and wider lessons which apply to all of us in business.

    What luxury item would you take with you to a desert island?
    My wetsuit. Being a bit of a triathlete, I would definitely try and swim back to civilisation. Or end up as shark food.

    Which film star would play you in a movie about your life?
    If I’d gone down the palaeontology route, Harrison Ford as dinosaur digging equivalent to Indiana Jones!

    Where haven’t you been in the world that you would most like to visit?
    Costa Rica. It seemingly has everything – volcanos, two oceans, rainforest, wildlife.

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