Upcoming commercial property law

Planning Gain Supplement

TBA

HM Treasury consulted (to Feb 2006) on proposals for developers to pay a planning gain supplement (PGS) on the start of any development (residential or non-residential) following grant of planning permission. PGS would be assessed on the difference between the value of the land with the new permission and its value beforehand.

Both the Department for Communities and Local Government (DCLG) and HM Revenue and Customs (HMRC) consulted (to Feb 2007) on detailed aspects of the scope of the new system. Also, the Planning-Gain Supplement (Preparations) Act 2007 received Royal Assent in Mar 2007, with a view to permitting public expenditure in preparation for the new tax.

Following the suggestion in the 2007 Pre-Budget Report that the government would defer legislation on PGS if a better way could be found of ensuring that local communities received significantly more of the benefit, provisions to introduce a Community Infrastructure Levy (CIL) have been included in the Planning Bill (currently at First reading (Lords)).

Energy performance certificates

Partly in force
Remainder d ue in force Oct 2008

The Department for Communities and Local Government (DCLG) has published regulations outlining requirements for energy performance certificates (EPCs) in respect of commercial buildings.

From 6 Apr 2008, all commercial buildings over 10,000 sq metres need an EPC; from July 2008, all commercial buildings over 2,500 sq metres need an EPC; and from Oct 2008, the requirement is extended to all commercial buildings (subject to certain limited exceptions).

Improving Payment Practices in the Construction Industry 

TBA

The Department for Business, Enterprise and Regulatory Reform (BERR) consulted (to Sept 2007) on amendments to Part II of the Housing Grants, Construction and Regeneration Act 1996 and Scheme for Construction Contracts (England and Wales) Regulations 1998. The amendments seek to improve transparency and clarity in the exchange of information relating to payments, thereby enabling parties to construction contracts to manage cash flow better; and to encourage parties to resolve disputes by adjudication.

This followed an earlier consultation (to Jun 2005), resulting in a number of proposals, including:
- introducing a requirement that certification of the sum due, by one of the contracting parties or a third party, becomes an essential feature of contractual payment mechanisms;
- removing the section 110(2) requirement for a payer notice;
- introducing a right to apply for payment where a certificate is not issued by the due date; and
- making certain payment mechanisms including pay-when-certified clauses ineffective.

Proposals to implement these amendments are due to be introduced in Autumn 2008 via the forthcoming Community Empowerment, Housing and Economic Regeneration Bill.

Better management of privately rented property

TBA

The Law Commission consulted (to Oct 2007) on a project which aims to identify and address failures of regulation in the private rented sector. The project is not proposing major changes to the law; rather, it examines ways in which the current law can be made more effective. The standards set by the law are often not met, particularly in relation to the physical condition of housing, and these failures contribute to the sector suffering from a poor reputation which, arguably, gets in the way of it playing as full a part as it should in providing housing.

The consultation paper surveyed the development of regulation of the private rented sector, and presented provisional proposals aimed at encouraging better management of rented property. The central proposal is for a scheme of 'enforced self-regulation', whereby landlords would be required by law either to belong to an accredited self-regulatory organisation, or to let through an agent who is a member of an accredited agents' organisation.

The Law Commission expects to publish a report in Summer 2008.

Shared ownership and leasehold enfranchisement

TBA

The Department for Communities and Local Government (DCLG) consulted (to Oct 2007) on proposed changes to current leasehold enfranchisement rules, to simplify and clarify the position in relation to shared ownership. The proposals would remove the possibility of shared owners being able to enfranchise (buy their freehold) before they have bought 100 per cent of a property under the terms of their shared ownership lease.

In its response to the consultation, the DCLG stated that it would work towards discussion of the following areas, in the first half of 2008, with key stakeholders:
- the criteria for designating areas as areas where affordable housing is hard to replace;
- the process for designating an area as one where affordable housing needs to remain affordable in perpetuity, including how an applications process to central government might work, and setting out the consultation process; and
- confirmation of which properties will need to be kept affordable in perpetuity.

Reform of rights over neighbouring land

Consultation closed 30 Jun 2008

The Law Commission has consulted on proposals for wide-ranging reform of the law governing easements, covenants and profits à prendre.

The consultation paper took the provisional view that the current law's distinction between easements, covenants and profits à prendre is valuable and should be retained. It contained a number of detailed proposals including:
- abolition of the existing methods of prescriptive acquisition of easements and the creation of a single new method of prescriptive acquisition;
- rationalisation of the current law of extinguishment of easements;
- creation of a new interest in land - the Land Obligation - to take the place of positive and restrictive covenants; and
- modernisation of the statutory means by which restrictive covenants can be discharged and modified and the application of those rules to easements, profits and Land Obligations.

Reform of housing rental law

TBA

In May 2006, the Law Commission published a draft Rented Homes Bill as part of its 'Renting Homes: The Final Report', which proposes modernisation and simplification of the law in this area.

The Report contains an illustrative model 'secure contract' and 'standard periodic contract', and proposes the abolition of all major forms of tenancy except Rent Act tenancies.