Knowledge

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.

Many commercial landlords will currently be dealing with issues arising out of their tenants’ financial difficulties, in particular the impact of insolvency proceedings. For tenants who are in administration, a moritorium applies, which will prevent a landlord taking action against the tenant without leave from the Court. Generally, the Courts will have a degree of sympathy for landlords, and will afford significant weight to the landlords’ proprietary rights when deciding whether to allow landlords to commence proceedings against a tenant.

It is a recognised principle of Scottish property law that a person transacting with heritable property is entitled to do so on the faith of what is contained in the public records, and will not be bound by any agreement of which he does not have notice.  In this principle, real rights (or rights in or to use the property itself) beat personal rights (or rights to require another to do something, or refrain from doing something in relation to that property).

A key element of the Landlord and Tenant Act 1954 is the security of tenure it provides for a tenant.  This means that the tenancy continues until terminated by procedures specified in the Act (as amended).  It is possible for the parties to the lease to agree to contract out of the security of tenure provisions, but an essential component of such exclusion is that the lease must be for a fixed period.
Fixed term lease

In today’s increasingly corporate world, it may come as something of a surprise that there are many thousands of organisations operating in Scotland which are set up as unincorporated associations. The sizes and structures of these organisations can vary enormously, as can their purposes and objects: many of them are voluntary organisations or charities (56% of registered Scottish charities are unincorporated associations), others are member-based organisations formed as clubs and societies which further the interests of the members and are not for profit, such as sports and social clubs.

Shepherd and Wedderburn has appointed an experienced restructuring and insolvency specialist in its London office.
Brenda Harris, who was previously a senior solicitor at The Khan Partnership, has 25 years of experience in the restructuring and insolvency field. She was a partner in the London office of Eversheds for 13 years, where she led the insolvency team. Brenda has acted for a range of corporate clients, major banks and leading insolvency practices.
She will join the firm’s highly experienced restructuring and insolvency team who recently:

Judgment C-251/07 Gävle Kraftvärme: Background
The decision handed down by the European Court of Justice (ECJ) on 11 September 2008 concerned the classification of a Swedish combined power and heating plant as either (i) an incineration plant or (ii) a co-incineration plant, and will be of importance to operators throughout Europe.

A new study commissioned by the Scottish Government for the Forum for Renewable Energy Development in Scotland on the status of the Scottish hydropower potential was published on 26 August 2008. The study reveals that Scotland has enough untapped hydropower potential to supply electricity to a quarter of the nation’s homes.

Background
Niazi and others (the applicants) were persons who claimed to have suffered miscarriages of justice. Bhatt Murphy and others (the lawyers) were solicitors who specialised in advising such persons on making applications for compensation in such circumstances. These cases arose from separate decisions, first, to withdraw a discretionary scheme under which such compensation was payable and, second, to reduce the level of costs payable to solicitors acting in such cases.

The Court of Appeal recently considered the case of Jones v London Borough of Merton [2008] EWCA Civ 660. This case is important to public sector landlords as well as being relevant for the general interest of the property sector, in giving guidance as to when a person no longer has possession of a property.

Cheap credit and a benevolent economy have meant that the past five years have been one of the quietest periods for corporate insolvencies. But as customer spending sinks and the credit markets crunch, the trickle over effect could result in a surge of commercial tenants going under. This is not good news for landlords who have been enjoying the upside UK’s property driven economy.