Property Flashcards
What is a rent review?
- For longer (usually commercial) leaseholders, contract may include a rent review clause that e.g. every 5 years on specific date, the rate of rent will be reviewed
*The clause may specify that only upper adjustments are applicable - meaning it will never decrease
*Not a standard clause = must be included to be applicable - SCPC includes provision for them if selling an already existing lease but no actual details (add as special condition)
What are the different types of rent review?
- Fixed Increase
- Index-linked; e.g. Retail Prices Index; in line with inflation (usually will include a % ca)
- Tenant’s Receipts; basically based on turnover and commercial success
- Open market: open market rental value of premises; should include within clause what elements should be included (as if vacant possession, same terms as current lease etc.) and disregarded (e.g. tenant’s success/renovations/goodwill)
What is the definition of a development?
- S55 of the Town and Country Planning Act 1990 (‘TCPA”):
(a) ‘the carrying out of building engineering, mining or other operations in, on, over or under land’; or
(b) ‘the making of any material change in the use of any buildings or other land.’ - Building Operations include demolitions, rebuilding, structural alterations/additions and other operations usually undertaken by builders
What are permitted developments?
- Within the curtilage of a dwelling house - could include extension dependent on size; if there is an extension would advise client that would need to confirm if permissions needed
- Some specified changes of use but this should always be checked
- Article 4 Direction may arise in Local Searches which could restrict any automatic planning permission
What is an LPA enforcement notice?
*LPA = Local Planning Authority
* For any breach of planning law; carrying on development without permission or exceeding the conditions of permission
*Will specify breach and remedy required within time limit and must be served on anyone with interest in land
*Can be appealed within 28 days of notice
What is a stop notice?
- LPA requiring immediate stop to breach; will usually be served in conjunction with enforcement notice
- Effective for those 28 days where enforcement notice is not yet in effect as it can be effective within 3 days
- Cannot be appealed
What is a breach of condition notice?
- Served by LPA where condition is not being complied with e.g. opening times being longer
*Gives at leats 28 days to comply
*No appeal; only High Court JR
What is an enforcement warning notice?
- Invites regularisation application
What is a planning enforcement order?
- Deliberate concealment of unauthorised development where time limits for enforcement action have expired
- Application made to Magistrates Court within 6 months of knowledge and sufficient evidence of breach
- Gives LPA 1 year and 22 days for enforcement
When may LPA imply for injunction?
*Expedient for actual or apprehended breach to be restrained
* High Court or County Court
What is the time limit for LPA enforcement?
- 10 years for most breaches and ALL breaches (only for ENGLAND) if took place on/after 25 April 2024
*If took place before 25 April 2024, OR IN WALES, only 4 years from date of substantial completion for breach of planning control and/or unauthorised change of use to single dwelling house
What is a Lawful Development Certificate?
- Confirms that existing use of/work to building is lawful and did not need planning permission - this would be the case where it was a Permitted development OR time limit on breach has expired
- Confirms proposed plans do not require permission
What are Building Regulations?
- Health and Safety of buildings constructed/altered
- Separate from planning permissions and may be applicable even if planning permission is not required
- Certificate of Compliance will be granted following inspections and should show up under CON29 Local Search
- Includes installation of replacement windows, boilers, electrical work, installing wood/coal burning fires/stoves etc
- Building Notice App for smaller projects and Full Plans for complex ones
How might Building Regulations be enforced?
- Magistrates Court within 6 months of discovery with sufficient evidence (but must be within 2 years of completion)
- Enforcement Notice within 12 months of completion
*Injunction
How can a buyer be protected when in breach of Building Regulations?
- Require application to LA for Regularisation Certificate - may require works to be carried out which can either be done before completion or costs taken into account of purchase price
- Lender must be informed as may decide to refuse loan or impose conditions
Why is a listed building or conservation area relevant?
*Checks will need to be made
* Listed Buildings usually may have more onerous conditions and planning permissions required
* Conservation area may mean more difficulties in making changes to property e.g. external appearance may require planning permission or restrictions on dealing with trees etc
What is the impact of a home rights notice?
*Notifies the buyer that the spouse has rights of occupation under the Family Law Act 1996
* Charge will continue until spouse releases the interest = property will be taken subject to that right; will need to be removed on/before completion or unequivocal undertaking by seller’s solicitors
What post-completion steps does the seller’s solicitors need to take?
*Send confirmation of completion to buyer’s solicitor, to seller and to seller’s estate agents
* Discharge mortgage
* Issue bill to seller and account for net proceeds of sale
* Post the deeds and documents to the B’s solicitors
What post-completion steps should the buyer’s solicitors take?
- Sign mortgage deed
- Send completion statement
- Issue bill
- Examine deeds and documents
- Register any company charges
What pre-completion steps does the buyer need to take (registered land)?
*Advise lender of completion date and requesting mortgage funds; Certificate of Title
* Draft transfer deed TR1 for whole title, TP1 for part transfer, FR1 for first time registration - send to seller’s side
* Have clients sign mortgage deed
* Ensure TA13 Completion and Undertakings from is requested/returned
* Bankruptcy/Companies Search for client
* Carry out priority search OS1 (whole), OS2 (part) (30 day priority), K15 for unregistered (15 day priority)
What is an Etridge letter?
*A certificate from a legal adviser confirming that a client has received independent legal advice fuly informing them of the transaction they are entering into and the potential consequences
*Usually relevant for when a couple are applying to be joint borrowers to confirm they are not under duress
What types of surveys for a buyer are there?
- Level 1 Condition Report: external and internal look at physical condition of property and evident significant defects; no advice on repairs/maintenance
*Level 2 Home Buyer: more extensive roof space and drainage inspection; advice on defects and what maintenance/repairs may be required (can also include valuation) - Level 3: extensive, in-depth analysis of the property’s condition and includes advice on defects, repairs and maintenance options (suitable for old, large or unusual/altered buildings)
When is VAT applicable on sale of property?
*If owner/landlord has opted in (must be VAT registered, notify HMRC within 30 days) - once VAT exemption is waived, in place for 20 years
* Sale of new freehold commercial property lass than 3 years old is a chargeable supply (20% VAT)
* Standard Commercial Conditions say that VAT will be payable by buyer on completion and receipt of VAT invoice unless condition A1 of Part 2 is selected (must expressly be concluded; ‘The parties agree that Part 2, Condition A1 is incorporated and applies to this transaction.”)
