Knowledge

It may seem like stating the obvious that a tenant should know who its landlord is, but confusion surrounding the precise identity of the landlord has been the subject of litigation in recent years both north and south of the border.

Parent company guarantees and performance bonds are typically used in the construction and engineering industries to provide a developer with some security in the event that the contractor breaches the building or engineering contract or, in some circumstances, upon the contractor’s insolvency.
In the current economic climate, contractor default is, unfortunately, even more prevalent in the construction and engineering industries, and so the issues surrounding parent company guarantees and performance bonds are very much in focus for developers.

The majority of the provisions of the Equality Act 2010 will come into force in England, Wales and Scotland in October 2010.  Property interests are affected, although certain new provisions relating to common parts of premises will not be implemented until a later date.  The 2010 Act consolidates existing discrimination legislation, including repealing the Disability Discrimination Act 1995 in full.

Disability discrimination

While the standard of obligations imposed by a repairing clause in a lease is a hot topic when the lease is being negotiated, the dilapidations claims at the end of the lease may be seen as an opportunity for some landlords to try to seek betterment in respect of the premises which they re-claim, and can come as a shock to the tenants.  In this recessionary climate we are coming across some extravagant Schedules of Dilapidations with landlords seeking to maximise their potential and the tenants fighting tooth and nail to resist.

Leading UK law firm Shepherd and Wedderburn is advising Cairn Energy plc on the sale of a maximum of 51 per cent of Cairn India to Vedanta Resources plc for a consideration of up to US$8,480 million.
The deal will ensure Edinburgh-based Cairn Energy has the financial flexibility to pursue an active exploration programme in its leading acreage position in Greenland and future growth opportunities.
Completion is expected before the end of 2010.
Sir Bill Gammell, Chief Executive of Cairn, said:

Supreme Court hands down Star Energy v Bocardo SA judgment
 

In two recent cases, the UK courts have considered the circumstances in which overseas employees can bring claims for unfair dismissal or discrimination in the employment tribunals. In the first, the Court of Session (the Scottish equivalent of the Court of Appeal) has held that an employee working abroad on a rotational basis can bring a claim against his UK-registered employer for unfair dismissal.

The Employment Appeal Tribunal (EAT) has, in the case of Heaven v Whitbread Group plc, provided guidance on how the effective date of termination (EDT) of employment should be determined. The judgment serves as a reminder that the determination of the EDT depends on what actually happened between the parties. Their wishes or any subsequent agreement as to a different date are irrelevant.

The value of mutual hold harmless indemnities in the energy industry has been highlighted by the recent Supreme Court decision of Farstad Supply AS v Enviroco Limited and Asco UK Limited [2010] UKSC 18. In this case, the court considered the true construction of a clause contained in a charterparty agreement between Farstad Supply AS (“Farstad”) and Asco UK Limited (“Asco”).

Latent defects insurance is often presented as a better way of providing protection against defects, rather than the time and paperwork involved in procuring collateral warranties from multiple parties. There appears to be an increase in popularity for it in the current economic climate, given the potentially significant benefit of the protection continuing even if the contractor or a consultant is insolvent. However, is it really a substitute for collateral warranties? What are the pros and cons of latent defects insurance?

Over the last 12 months, we have experienced a surge in disputes about whether practical completion of a new development has occurred, and it is often nothing to do with whether the building is complete – it is more about parties seeking to escape the consequences of practical completion. Practical completion of a project is of huge commercial significance – its occurrence fundamentally changes the rights that exist not only between the parties to the Building Contract but amongst third parties, such as tenants and purchasers as well.

The feudal system of property ownership in Scotland was abolished in 2004, so that property owners can no longer bemoan many of the limitations imposed on the free enjoyment of their property by feudal “superiors”, and in particular the feuduties which a feudal superior could extract from them. 
However, the road to feudal abolition began much earlier, with the Land Tenure Reform (Scotland) Act 1974, which, amongst other things, began the process of phasing out feuduties payable to superiors, by prohibiting the creation of new feuduties.

In the recent case of Good Harvest Partnership LLP v Centaur Services Limited, [2010] EWHC 330 (Ch) the High Court has finally clarified that the Landlord & Tenant (Covenants) Act 1995 (LTCA 1995) prevents a guarantor of a tenant’s obligations from being required to give a further direct guarantee in respect of an assignee of the lease.
Guarantee of an assignee’s covenants

The decision of the Supreme Court in the case of Barratt Homes Limited v Welsh Water [2009] UKSC 13, in December 2009 marks the end of a long running litigation seeking to clarify the extent of rights under the Water Industry Act to connect to sewerage infrastructure.  The case principally addressed the extent of a property owner or developer’s right to determine the point at which his private drain or sewer can connect to a public sewer.  A more fundamental issue is however highlighted through the narrow point of legislative interpretation treated by the court, on the proper contr

“Virtual” assignments of leases are often used in portfolio transactions, corporate deals and other arrangements transferring responsibility without any intention to affect the contractual position between landlords and tenants.

Two recent cases have confirmed that a genuine volunteer does not have the protection of the law on discrimination or unfair dismissal.
In X v Mid Sussex Citizens Advice Bureau, the claimant was a part-time unpaid volunteer with Mid Sussex Citizens Advice Bureau (CAB), working under a volunteer agreement which was expressly stated to be “binding in honour only” and not to be a contract of employment.  She was asked to cease to attend the CAB as a volunteer, and brought a claim on the grounds that she was discriminated against because of her disability. 

Legal agreements seek to provide certainty and clarity for those relying upon them. For this reason certain essential elements must be agreed before a contract is legally enforceable, for example, price, property and parties involved. In some commercial situations however, the contracting parties may wish to leave specific contractual terms outstanding to provide for flexibility and instead provide some form of mechanism for reaching agreement in the future.

In the current climate, a tenant break option in a lease is likely to be more significant than ever for both landlord and tenant.

Buying property can be an expensive and complicated business.  In certain commercial property purchases, the preliminary steps involved, such as obtaining planning permission, even before the final decision to buy is made, can be time consuming and costly, so that a prospective purchaser may look for a period during which the property is off-limits to other potential buyers.

But what does such an arrangement involve?  And how binding on the parties are agreements of this type?

Bocardo SA v Star Energy UK Onshore Limited
[2009] EWCA Civ 579

Energy and utility companies will be interested in the outcome of the recent Court of Appeal decision in the case of Bocardo SA v Star Energy UK Onshore Limited [2009] EWCA Civ 579. The case considers the law of trespass as it applies to ground lying beneath the surface of an owner’s land and while in this case the trespass related to oil pipelines, the principles will be of relevance to other instances of substrata trespass. This decision could have significant impact for energy and utilities companies, as well as landowners.

On 30 June 2009, the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland published a guidance paper on the determination of realised profits and losses for the purposes of making distributions under the Companies Act 2006 (the Act). The substance of the guidance is largely unchanged from the draft issued back in November 2008.

It is becoming increasingly common for company directors, partners or sole traders to be asked to provide personal guarantees, in particular as a pre-condition to banks providing new bank facilities or agreeing to amendments to existing facilities.

Responsible exercise of access over land in Scotland is a cornerstone of the rights of access conferred on the public under the Land Reform (Scotland) Act 2003.  And there is a corresponding obligation on the owner of land to act responsibly in the way he uses and manages that land.