Features
1. Role model function of eco towns could be decisive legal argument
Legal advice obtained by the Local Government Association (LGA) from 4-5 Gray's Inn Square barristers suggests that the CLG is already well down the road to judicial review challenge over eco-towns, after selecting eco-town sites by a bidding process and without a Strategic Environmental Assessment (SEA). An SEA would mean planning assessment would take much longer than the 3-4 month period the CLG wants for eco-towns. The CLG suggests that its forthcoming PPS will focus particularly on consultation requirements for eco-towns, and a "sustainability appraisal" will be released at the same time, which could engage SEA requirements.
The LGA's advice also points out that making special provision for eco-towns is particularly legally untenable because eco-towns' ecological requirements are generally the same as those already taken into account in the plan-led process. Critics argue that in some cases, especially where eco-towns as new settlements are removed from transport, the ecological standards will be lower. The Shadow Housing Minister claims that the 75,000 eco-town homes to be built by 2016 would meet the government's Sustainability Code 3, while all other properties built in 2016 would be at Code 6.
But Gideon Amos, chief executive of charity the Town and Country Planning Association (TCPA) believes that eco-towns' ecological standards are going to be higher than for regular housing developments, and the eco-towns' major function is going to be as a role-model for future ecological standards in housing. The TCPA is working with the CLG to develop ecological criteria for promoters and planners of the new settlements.
"It is a fact that TCPA/CLG Worksheets and the standards in 'Living a Greener Future' both set out standards more demanding than for any other development," he says. "Zero carbon across the whole town, tough targets for reducing car use and higher indoor and greenspace standards are just some examples.
"In an exemplar eco-town the aim should be to exploit the unique opportunities that new settlements offer for example to provide an entirely new approach to green space in development. It is not surprising that some of the strongest supporters of the initiative include the National Society of Allotment and leisure Gardeners and the Landscape Institute.
"For the TCPA, excellent exemplars of high quality are more important than the number of eco-towns that go ahead," he adds. He believes the ecological role-model function of eco-towns may well lead to the courts deciding that short-circuiting plan-led development procedures is justified.
"We think that the development plan is the most appropriate way to bring forward new settlements, but we also recognise that with delays at anything from three to three years this simply will not deliver a project society agrees is urgent."
Amos notes that departures from the development plan are not unheard of and too few authorities actually have a plan in place "frustrating all parties in the process," he says. "Examples of departures promoted by government before include Housing Market Renewal areas, the establishment of Development Corporations and airport development proposals most of which pay little heed to the development plan.
"If the government lose their case, eco-towns will be entirely in the hands of local authority planning departments. However, this means a number will still go forward, which is the important thing for us.".
(27/10/08)
Legal News Analysis
2. Energy performance certificates will help tenants cope with price hikes
The obligation for landlords to provide new tenants with an Energy Performance Certificate (EPC) came into force on 1 October 2008 in England and Wales; in Scotland the regulations apply from the start of January 2009.
The rating is intended to allow potential tenants to consider energy efficiency and fuel costs. A £200 repeatable fine can be levied per property on landlords who refuse. Elizabeth Brogan of the National Landlords Association said: "There is no obligation for an EPC in bedsit-type Houses in Mutiple Occupation (HMOs) because EPCs cannot apply to a part of a dwelling. However, where a house or flat is shared on a joint tenancy (eg student housing) and the tenants have full enjoyment of the whole property the landlord will have to give the tenants an EPC prior to granting a tenancy. There is also no requirement for an EPC where somebody is taking in lodgers."
Ms Brogan added: "Our take on EPCs is that tenants often move on more swiftly than they might have otherwise done if they are facing high fuel bills in a property or if they are not comfortable in the property. The EPCs will give landlords and tenants information about measures that could be taken to improve energy efficiency. Landlords should bear in mind that improving the energy efficiency of the property may reduce turnover and could add value to the property. At the same time, the actual energy use in the property will depend on the tenant so they need to be careful with their behaviour and make sure that they switch off lights and appliances when appropriate."
Tessa Shepperson is editor of www.landlordlaw.co.uk, online legal services for residential landlords and tenants. She said that although landlords do not have to do the recommended improvements, the information given in the certificate will help focus landlords' and tenants' minds on the energy efficiency of rented properties: "In view of recent increases in energy prices, tenants will be looking for homes which are cheaper to run. Landlords whose properties have a better rating will find them easier to let, and may be able to justify charging a higher rent.
Note that some energy assessors offer a service where certificates can be provided both before and after the recommended works have been done, so this will be suitable for landlords looking to improve the energy rating of their properties," she said. The EPC and a recommendation report must be provided free of charge by landlords:- when written information about the building is provided in response to a request for information from the prospective tenant;- when a viewing is conducted; and- if neither of those occur, before the landlord enters into a contract to let their property.
An EPC does not have to be made available if:- the landlord believes the prospective tenant is unlikely to have sufficient funds to rent the property;- the landlord does not believe the prospective tenant is genuinely interested in renting that type of property; or- the landlord is unlikely to be prepared to rent out the property to the prospective tenant (although this does not authorize unlawful discrimination). An EPC is valid for 10 years and must be produced by an accredited energy assessor.
(17/10/08)
Legal News Analysis
3. Sale and rent back regulation required to secure transparency
The sale and rent back sector should be made subject to statutory regulation by the Financial Services Authority, the Office of Fair Trading (OFT) has said.
The OFT's decision comes just a week after the National Landlords Association confirmed its own sale and rent back code of practice would include legally enforceable financial penalties. It has favoured self-regulation as a solution to issues of bad practice.
Sale and rent back businesses--which buy homes from individuals, usually at a discount, then allow those individuals to stay on as tenants--are currently unregulated.The OFT estimates there are upwards of 1,000 sale and rent back firms plus an unknown number of non-professional landlords, who have conducted upwards of 50,000 transactions to date.
The OFT report, Sale and Rent Back, published 15 October 2008, says firms are misleading consumers about the value of their property and the security they have as tenants. Examples include telling people they can stay in their home for years, when in reality the tenancy may only be guaranteed for six to 12 months, or imposing substantial rent increases.
The OFT proposes that regulation be introduced through an amendment to the Financial Services and Markets Act 2000, and points out that sale and rent back has similarities with equity release, which is also regulated by the Financial Services Authority. As this will take time to implement, the OFT proposes that self-regulation be encouraged in the interim period.
The OFT proposes the regulations include standards of disclosure; an obligation to allow homeowners to take advantage of independent free advice; and a tenancy agreement with a minimum length of tenure that matches any verbal assurances that are given.
Steven Hilton, media relations manager at the National Landlords Association, says: "NLA would like to think a market-led solution is the best way to go about things. There was an element of surprise [about the OFT announcement] but not in a negative manner. We are pleased that action is being taken, that there is going to be regulation, and we are happy to support that."
The NLA will continue with its code of practice and will encourage landlords to sign up to it, he says.
"A lot of people seem to be getting into sale and rent back in a rush--with an imminent threat of repossession--and are making very important and impactful decisions with very little recourse to independent legal advice, family support or counselling," says Hilton.
"It is a British taboo to have financial problems. The nastier bits [of sale and rent back businesses] have focused on that. The majority act with professionalism and integrity, but when it goes wrong it goes very wrong.
4. Is there a distinction of use in class C2 of the UCO?
R (on the application of Tendring District Council) v Secretary of State for Communities and Local Government and others concerned an application by Tendring District Council under the Town and Country Planning Act 1990 (TCPA 1990), s 289, challenging the decision of an inspector allowing appeals against enforcement notices it issued in respect of Yew Trees, a nursing home in Essex.
Yew Trees was originally constructed as a dwelling house but was used as a nursing home following the grant of planning permission in 1988 which was subject to a number of conditions, including condition 6 which states: "The premises shall be used only for a nursing home and for no other purpose, including any other purpose in Class C2 of the Schedule of the Town & Country Planning Use (Classes Order) 1987" (UCO). In 2002 the property was purchased by a company providing specialist mental health services and in 2003 started admitting patients. The Council issued an enforcement notice for change of use and breach of condition 6 of the 1988 Permission.
Shabana Anwar, solicitor at Bircham Dyson Bell and bulletins editor of Butterworths Planning Law Service says: "The inspector rejected the Council's arguments that the level of security at Yew Trees was such as to take it from nursing home use under class C2 to a class C2A use (secure residential institutions) and concluded that a change of use from a nursing home had not occurred."
Sullivan J agreed. The court held that there was no clear distinction between hospitals, nursing homes and residential care homes within Class C2 of the UCO and that as they provided a broad spectrum of care, there was bound to be some overlap.
Anwar says: "The judge considered s 55(2) of the TCPA 1990 which sets out the operations and uses which do not involve development, including at s 55(2)(f): 'in the case of buildings or other land which are used for a purpose of any class specified in an order made by the Secretary of State under this section, the use of the buildings or other land or, subject to the provisions of the order, of any part of the buildings or the other land, for any other purpose of the same class'. This is reinforced by art 3(1) of the UCO."
The Council had argued that it was necessary to distinguish between the different purposes within the classes and that a nursing home could not be a hospital or used as a residential care home. The use had to be one or other of the purposes in C2. It was therefore necessary to give "nursing home" a meaning different from that which was ascribed to "hospital" or "residential care home". Sullivan J disagreed with the Court.
5. Trading standards finds many HIPs “incomplete”
Concerns were raised when Birmingham Trading Standards officers went into 15 estate agencies in the city and asked to see the HIP for each property. They then selected six from the 15 and subjected the local searches contained in the documents to detailed inspection. Trading Standards classed five out of the six as being unsatisfactory, in the September 2008 study.
"The findings of the trading standards investigation confirm very starkly the concerns the Law Society has been expressing for some time about these cheap packs put together by unqualified and unregulated HIP providers, which are a complete waste of consumers' money," says Paul Marsh, president of the Law Society. He reckons that unregulated providers "have not the slightest understanding of the meaning let alone the importance of the documents that go into these packs. Their only concern is to make as much money as possible from the consumer".
Birmingham Trading Standards accused private search companies of "short-circuiting the system to save money". It found substantive inaccuracies in the documents. For example, one property was incorrectly located in Worcestershire (it was in Birmingham) and another property was deemed free of planning restrictions (there was a restriction on permitted development). It was also found that there were no planning histories on properties when they were "readily available" and wrong dates were recorded for planning proposals.
The results of this survey were 'shocking', said Councillor Neil Eustace, chair of Birmingham City Council public protection committee. "Some of this inaccurate or missing information could result in someone buying a house they would otherwise think twice about," he said. "A local authority search would have to be done later and any inaccuracies detected could result in sales falling through. These searches are simply not worth the paper they are written on."
Marsh comments: "We know that there are a lot of very poor quality packs floating around and in a very, very slow market the HIP becomes pretty useless. There are a lot of people out there who put their house on the market five months ago and they did a HIP and the searches are now out of date."
Showing an industry-wide approach to the deficiencies of the new regime, the Law Society, RICS (the Royal Institution of Chartered Surveyors) and the National Association of Estate Agents recently drew up their own consumer-focussed HIP particularly as a response to a slowing market and the prospect of searches having to be paid twice. Under those plans, the legal information in HIPs would be removed with buyers obtaining searches at the appropriate stage in transactions. "Everybody who has looked at improving the house buying process now accepts that the more you can get the paperwork done at an early stage the better it must be from the seller's perspective," argues Marsh. "If you can get the contract and all the supporting papers out to the buyer as soon as the deed is struck subject to contract that must necessarily mean that the transaction can go more smoothly because you're cutting out delays."
(09/10/08)
Legal News Analysis
6. No landowner compensation for coastal access damage
Coastal landowners will receive no compensation for damage caused by access paths, the government announced on 25 September 2008 in response to the public consultation of the controversial draft Marine Bill which legislates for an extra 1,400 miles of new coastal paths.
Despite recommendations by the Department of Environment, Food and Rural Affairs (Defra) committee that landowners and farmers be given a right to appeal if the coastal route crosses their land and be offered financial compensation if the paths cause financial loss, ministers said it was not feasible to allow individual rights of appeal. The government report stated that landowners will be consulted on the route of the path by Natural England (NE) and safeguards are already in place to protect privacy and property.
Organisations representing coastal farmers and landowners are outraged by the decision. "This is not the first time that an Efra Select Committee has not been listened to," said National Farmers Union (NFU) vice president Paul Temple. "I am really concerned that ministers seem determined to force through this pathway without learning lessons early on and providing sufficient funding and protection for those most affected. Defra ministers have roundly rejected essential parts of a pragmatic coastal route; an independent appeal is considered inappropriate, compensation unnecessary and budgetary requirements can wait for another day. I will be taking up these concerns on behalf of farmers again. Frankly, I am amazed that ministers have ignored the Parliamentary process and do not make more effort to understand the implications that a new coastal path will have on farming businesses all along the coastline."
Andrew Shirley, national access legal adviser for the Country Land and Business Association (CLA), said the government has turned its back on the pre-legislative process that it had requested: "It has rejected most of the findings made by [Defra] and the joint committee. It has denied the request of a right of appeal, despite [Defra] describing the lack of one as a 'fundamental weakness'. It is also surprising that the government has now ruled out the possibility of compensation. One of the few positive aspects is that the right of access will not automatically go up estuaries to the first foot crossing, but will stop at the mouth of the estuary unless there is an overriding reason to go further. However, with no right of appeal or compensation, there is no check."
A spokesman for Defra said: "As our response says, our view is that the framework of the draft Marine Bill provides sufficient flexibility in the alignment process to avoid situations where the coastal access rights will cause significant financial loss. The secretary of state has a duty to aim to strike a fair balance between the interests of the public and others with a relevant interest in land."
(07/10/08)
Legal News Analysis
7. Home building sector will become “anti-competitive”
A mixture of government policy and regulation will make the UK house building sector anti-competitive, according to Gillian Charlesworth, the Royal Institution of Chartered Surveyors' (RICS) director of external affairs. She was commenting on the Office of Fair Trading (OFT) market study, 'Homebuilding in the UK', published on 25 September 2008, which examines competition in the house construction sector up until the 2007 housing downturn.
The study found, first, that housing developers investing in land for which planning permission had been granted, and who held it back from the market (land banking), had not thereby behaved anti-competitively. Rather, developers had land-banked as a means to help smooth out their business fluctuations, caused particularly by land availability restrictions and planning approval unpredictability.
John Fingleton, OFT chief executive said the study "found the homebuilding market to be generally competitive, with no evidence that individual homebuilders have the ability to restrict supply in order to inflate prices or to hoard land for anti-competitive reasons".
Second, the study found that the existence of poor consumer service standards for house buyers did reflect a lack of competition between developers, and wants the industry to develop a code of practice to help reduce this problem.
"We understand what the study says, but eventually larger builders will get into a very dominant position," Charlesworth says.
"The problem is that developers are not able to get their hands on big enough pieces of land to do the sort of developments that are required, and there is evidence that they are buying up smaller builders for their land to achieve that."
That means that some of the matters that the OFT says now pose no threat to competition, like land banking, will become competition issues, she believes.
She agrees with one of the study's conclusions that land-banking activity could be reduced if homebuilders were not constrained by the availability of suitable land.
"There is really no overview of the level of land that is needed for home building--we have been saying that for a long time. Some quite drastic thinking is needed to address that."
As for planning application delays and unpredictability, "they are major factors which mitigate against building the houses that we need in this country, and they make people behave in certain ways such as developers hanging onto land and also building it up through the purchasing of smaller builders," she says.
Part of the problem is "that we have more than 300 local authorities often taking different approaches to planning," she says. "But I think that there is no political appetite for removing local democracy by devolving decisions to planning professionals, or where planning committees could be looking at the bigger issues in a more strategic way."
The sheer amount of money spent by developers on solicitors and consultants to negotiate their way through the planning system showed "how the system doesn't really work on any front," she adds. "In general, a more strategic approach needs to be taken. Planning legislation has been built up over many years and frankly probably needs root and branch reform."
(02/10/08)
Legal News Analysis
Articles
1. The new guidance on technology and construction courts – where do I start?
Journal: Construction Law Journal
Citation: (2008) 19 8 Cons.Law 23
Issue date: 1 October 2008
Author: Paul Newman
Summary: Discusses the primary criteria for transfer between courts. Many construction professionals know that the Technology and Construction Court (TCC) is 'their' court. The transfers occur as the weight placed on specialist technical evidence is such that use of a specialist division of the court is appropriate.
2. Changes to make for ambiguity
Journal: Construction Law Journal
Citation: (2008) 19 8 Cons.Law 12
Issue date: 1 October 2008
Author: Michael Phipps
Summary: One compelling reason for loosing traditional reluctance is that insurance provisions in old versions may no longer match the insurances available. All to often, work is carried out on invalid instructions and is valued and included in amounts certified for payment. Provided that nothing goes wrong no-one notices or even cares. Discusses the importance of culture change in respect to this issue.
3. Fair payment advice ignored
Journal: Construction Law Journal
Citation: (2008) 19 8 Cons.Law 14
Issue date: 1 October 2008
Author: Tom Pemberton
Summary: The OGC's Guide to best 'Fair Payment' practice is a recent example of an initiative by the government to promote best practice in construction procurement by the public sector.
The recommendations made in the Guide are not particularly innovative, having been foreshadowed in historic reports by Sir Michael Latham and others. The Guide has provided the framework for the NEC3 and PPC2000 drafting bodies to issue their own 'fair payment' options. JCT is expected to follow suit. However, there is little evidence of widespread compliance with the Guide to date. It remains to be seen, therefore, whether the NEC3 and PPC2000 'fair payment' drafting will be widely adopted.
4. Pros and cons of DIY
Journal: Estates Gazette
Citation: Estates Gazette, 11 October 2008, 172
Issue date: 11 October 2008
Author: Matthew Bonye
Summary: Explains why provisions must be fully complied with and outlines the pitfalls that await the unwary avoided when it comes to Jervis v Harris clauses. These clauses enable landlords to inspect tenanted premises, serve a repair notice on the tenant, carry out repairs when the tenant has failed to do so and recover the cost as a debt.
5. Trying to keep a roof above one’s head
Journal: Estates Gazette
Citation: Estates Gazette, 11 October 2008, 175
Issue date: 11 October 2008
Author: Sandi Murdoch
Summary: Explains many of the rules governing claims to co-owned property relate to disputes that arise when married or cohabiting couples split up. Aside from the emotional upheaval for all concerned, the law often has to decide how to leave each party in as good a position as possible to keep a roof over his or her head.
Please note subscribers can go to LexisNexis Butterworths for further details about all the above articles. Non-subscribers can sign up for a free trial of the online service.
1. Role model function of eco towns could be decisive legal argument
Legal advice obtained by the Local Government Association (LGA) from 4-5 Gray's Inn Square barristers suggests that the CLG is already well down the road to judicial review challenge over eco-towns, after selecting eco-town sites by a bidding process and without a Strategic Environmental Assessment (SEA). An SEA would mean planning assessment would take much longer than the 3-4 month period the CLG wants for eco-towns. The CLG suggests that its forthcoming PPS will focus particularly on consultation requirements for eco-towns, and a "sustainability appraisal" will be released at the same time, which could engage SEA requirements.
The LGA's advice also points out that making special provision for eco-towns is particularly legally untenable because eco-towns' ecological requirements are generally the same as those already taken into account in the plan-led process. Critics argue that in some cases, especially where eco-towns as new settlements are removed from transport, the ecological standards will be lower. The Shadow Housing Minister claims that the 75,000 eco-town homes to be built by 2016 would meet the government's Sustainability Code 3, while all other properties built in 2016 would be at Code 6.
But Gideon Amos, chief executive of charity the Town and Country Planning Association (TCPA) believes that eco-towns' ecological standards are going to be higher than for regular housing developments, and the eco-towns' major function is going to be as a role-model for future ecological standards in housing. The TCPA is working with the CLG to develop ecological criteria for promoters and planners of the new settlements.
"It is a fact that TCPA/CLG Worksheets and the standards in 'Living a Greener Future' both set out standards more demanding than for any other development," he says. "Zero carbon across the whole town, tough targets for reducing car use and higher indoor and greenspace standards are just some examples.
"In an exemplar eco-town the aim should be to exploit the unique opportunities that new settlements offer for example to provide an entirely new approach to green space in development. It is not surprising that some of the strongest supporters of the initiative include the National Society of Allotment and leisure Gardeners and the Landscape Institute.
"For the TCPA, excellent exemplars of high quality are more important than the number of eco-towns that go ahead," he adds. He believes the ecological role-model function of eco-towns may well lead to the courts deciding that short-circuiting plan-led development procedures is justified.
"We think that the development plan is the most appropriate way to bring forward new settlements, but we also recognise that with delays at anything from three to three years this simply will not deliver a project society agrees is urgent."
Amos notes that departures from the development plan are not unheard of and too few authorities actually have a plan in place "frustrating all parties in the process," he says. "Examples of departures promoted by government before include Housing Market Renewal areas, the establishment of Development Corporations and airport development proposals most of which pay little heed to the development plan.
"If the government lose their case, eco-towns will be entirely in the hands of local authority planning departments. However, this means a number will still go forward, which is the important thing for us.".
(27/10/08)
Legal News Analysis
2. Energy performance certificates will help tenants cope with price hikes
The obligation for landlords to provide new tenants with an Energy Performance Certificate (EPC) came into force on 1 October 2008 in England and Wales; in Scotland the regulations apply from the start of January 2009.
The rating is intended to allow potential tenants to consider energy efficiency and fuel costs. A £200 repeatable fine can be levied per property on landlords who refuse. Elizabeth Brogan of the National Landlords Association said: "There is no obligation for an EPC in bedsit-type Houses in Mutiple Occupation (HMOs) because EPCs cannot apply to a part of a dwelling. However, where a house or flat is shared on a joint tenancy (eg student housing) and the tenants have full enjoyment of the whole property the landlord will have to give the tenants an EPC prior to granting a tenancy. There is also no requirement for an EPC where somebody is taking in lodgers."
Ms Brogan added: "Our take on EPCs is that tenants often move on more swiftly than they might have otherwise done if they are facing high fuel bills in a property or if they are not comfortable in the property. The EPCs will give landlords and tenants information about measures that could be taken to improve energy efficiency. Landlords should bear in mind that improving the energy efficiency of the property may reduce turnover and could add value to the property. At the same time, the actual energy use in the property will depend on the tenant so they need to be careful with their behaviour and make sure that they switch off lights and appliances when appropriate."
Tessa Shepperson is editor of www.landlordlaw.co.uk, online legal services for residential landlords and tenants. She said that although landlords do not have to do the recommended improvements, the information given in the certificate will help focus landlords' and tenants' minds on the energy efficiency of rented properties: "In view of recent increases in energy prices, tenants will be looking for homes which are cheaper to run. Landlords whose properties have a better rating will find them easier to let, and may be able to justify charging a higher rent.
Note that some energy assessors offer a service where certificates can be provided both before and after the recommended works have been done, so this will be suitable for landlords looking to improve the energy rating of their properties," she said. The EPC and a recommendation report must be provided free of charge by landlords:- when written information about the building is provided in response to a request for information from the prospective tenant;- when a viewing is conducted; and- if neither of those occur, before the landlord enters into a contract to let their property.
An EPC does not have to be made available if:- the landlord believes the prospective tenant is unlikely to have sufficient funds to rent the property;- the landlord does not believe the prospective tenant is genuinely interested in renting that type of property; or- the landlord is unlikely to be prepared to rent out the property to the prospective tenant (although this does not authorize unlawful discrimination). An EPC is valid for 10 years and must be produced by an accredited energy assessor.
(17/10/08)
Legal News Analysis
3. Sale and rent back regulation required to secure transparency
The sale and rent back sector should be made subject to statutory regulation by the Financial Services Authority, the Office of Fair Trading (OFT) has said.
The OFT's decision comes just a week after the National Landlords Association confirmed its own sale and rent back code of practice would include legally enforceable financial penalties. It has favoured self-regulation as a solution to issues of bad practice.
Sale and rent back businesses--which buy homes from individuals, usually at a discount, then allow those individuals to stay on as tenants--are currently unregulated.The OFT estimates there are upwards of 1,000 sale and rent back firms plus an unknown number of non-professional landlords, who have conducted upwards of 50,000 transactions to date.
The OFT report, Sale and Rent Back, published 15 October 2008, says firms are misleading consumers about the value of their property and the security they have as tenants. Examples include telling people they can stay in their home for years, when in reality the tenancy may only be guaranteed for six to 12 months, or imposing substantial rent increases.
The OFT proposes that regulation be introduced through an amendment to the Financial Services and Markets Act 2000, and points out that sale and rent back has similarities with equity release, which is also regulated by the Financial Services Authority. As this will take time to implement, the OFT proposes that self-regulation be encouraged in the interim period.
The OFT proposes the regulations include standards of disclosure; an obligation to allow homeowners to take advantage of independent free advice; and a tenancy agreement with a minimum length of tenure that matches any verbal assurances that are given.
Steven Hilton, media relations manager at the National Landlords Association, says: "NLA would like to think a market-led solution is the best way to go about things. There was an element of surprise [about the OFT announcement] but not in a negative manner. We are pleased that action is being taken, that there is going to be regulation, and we are happy to support that."
The NLA will continue with its code of practice and will encourage landlords to sign up to it, he says.
"A lot of people seem to be getting into sale and rent back in a rush--with an imminent threat of repossession--and are making very important and impactful decisions with very little recourse to independent legal advice, family support or counselling," says Hilton.
"It is a British taboo to have financial problems. The nastier bits [of sale and rent back businesses] have focused on that. The majority act with professionalism and integrity, but when it goes wrong it goes very wrong.
4. Is there a distinction of use in class C2 of the UCO?
R (on the application of Tendring District Council) v Secretary of State for Communities and Local Government and others concerned an application by Tendring District Council under the Town and Country Planning Act 1990 (TCPA 1990), s 289, challenging the decision of an inspector allowing appeals against enforcement notices it issued in respect of Yew Trees, a nursing home in Essex.
Yew Trees was originally constructed as a dwelling house but was used as a nursing home following the grant of planning permission in 1988 which was subject to a number of conditions, including condition 6 which states: "The premises shall be used only for a nursing home and for no other purpose, including any other purpose in Class C2 of the Schedule of the Town & Country Planning Use (Classes Order) 1987" (UCO). In 2002 the property was purchased by a company providing specialist mental health services and in 2003 started admitting patients. The Council issued an enforcement notice for change of use and breach of condition 6 of the 1988 Permission.
Shabana Anwar, solicitor at Bircham Dyson Bell and bulletins editor of Butterworths Planning Law Service says: "The inspector rejected the Council's arguments that the level of security at Yew Trees was such as to take it from nursing home use under class C2 to a class C2A use (secure residential institutions) and concluded that a change of use from a nursing home had not occurred."
Sullivan J agreed. The court held that there was no clear distinction between hospitals, nursing homes and residential care homes within Class C2 of the UCO and that as they provided a broad spectrum of care, there was bound to be some overlap.
Anwar says: "The judge considered s 55(2) of the TCPA 1990 which sets out the operations and uses which do not involve development, including at s 55(2)(f): 'in the case of buildings or other land which are used for a purpose of any class specified in an order made by the Secretary of State under this section, the use of the buildings or other land or, subject to the provisions of the order, of any part of the buildings or the other land, for any other purpose of the same class'. This is reinforced by art 3(1) of the UCO."
The Council had argued that it was necessary to distinguish between the different purposes within the classes and that a nursing home could not be a hospital or used as a residential care home. The use had to be one or other of the purposes in C2. It was therefore necessary to give "nursing home" a meaning different from that which was ascribed to "hospital" or "residential care home". Sullivan J disagreed with the Court.
5. Trading standards finds many HIPs “incomplete”
Concerns were raised when Birmingham Trading Standards officers went into 15 estate agencies in the city and asked to see the HIP for each property. They then selected six from the 15 and subjected the local searches contained in the documents to detailed inspection. Trading Standards classed five out of the six as being unsatisfactory, in the September 2008 study.
"The findings of the trading standards investigation confirm very starkly the concerns the Law Society has been expressing for some time about these cheap packs put together by unqualified and unregulated HIP providers, which are a complete waste of consumers' money," says Paul Marsh, president of the Law Society. He reckons that unregulated providers "have not the slightest understanding of the meaning let alone the importance of the documents that go into these packs. Their only concern is to make as much money as possible from the consumer".
Birmingham Trading Standards accused private search companies of "short-circuiting the system to save money". It found substantive inaccuracies in the documents. For example, one property was incorrectly located in Worcestershire (it was in Birmingham) and another property was deemed free of planning restrictions (there was a restriction on permitted development). It was also found that there were no planning histories on properties when they were "readily available" and wrong dates were recorded for planning proposals.
The results of this survey were 'shocking', said Councillor Neil Eustace, chair of Birmingham City Council public protection committee. "Some of this inaccurate or missing information could result in someone buying a house they would otherwise think twice about," he said. "A local authority search would have to be done later and any inaccuracies detected could result in sales falling through. These searches are simply not worth the paper they are written on."
Marsh comments: "We know that there are a lot of very poor quality packs floating around and in a very, very slow market the HIP becomes pretty useless. There are a lot of people out there who put their house on the market five months ago and they did a HIP and the searches are now out of date."
Showing an industry-wide approach to the deficiencies of the new regime, the Law Society, RICS (the Royal Institution of Chartered Surveyors) and the National Association of Estate Agents recently drew up their own consumer-focussed HIP particularly as a response to a slowing market and the prospect of searches having to be paid twice. Under those plans, the legal information in HIPs would be removed with buyers obtaining searches at the appropriate stage in transactions. "Everybody who has looked at improving the house buying process now accepts that the more you can get the paperwork done at an early stage the better it must be from the seller's perspective," argues Marsh. "If you can get the contract and all the supporting papers out to the buyer as soon as the deed is struck subject to contract that must necessarily mean that the transaction can go more smoothly because you're cutting out delays."
(09/10/08)
Legal News Analysis
6. No landowner compensation for coastal access damage
Coastal landowners will receive no compensation for damage caused by access paths, the government announced on 25 September 2008 in response to the public consultation of the controversial draft Marine Bill which legislates for an extra 1,400 miles of new coastal paths.
Despite recommendations by the Department of Environment, Food and Rural Affairs (Defra) committee that landowners and farmers be given a right to appeal if the coastal route crosses their land and be offered financial compensation if the paths cause financial loss, ministers said it was not feasible to allow individual rights of appeal. The government report stated that landowners will be consulted on the route of the path by Natural England (NE) and safeguards are already in place to protect privacy and property.
Organisations representing coastal farmers and landowners are outraged by the decision. "This is not the first time that an Efra Select Committee has not been listened to," said National Farmers Union (NFU) vice president Paul Temple. "I am really concerned that ministers seem determined to force through this pathway without learning lessons early on and providing sufficient funding and protection for those most affected. Defra ministers have roundly rejected essential parts of a pragmatic coastal route; an independent appeal is considered inappropriate, compensation unnecessary and budgetary requirements can wait for another day. I will be taking up these concerns on behalf of farmers again. Frankly, I am amazed that ministers have ignored the Parliamentary process and do not make more effort to understand the implications that a new coastal path will have on farming businesses all along the coastline."
Andrew Shirley, national access legal adviser for the Country Land and Business Association (CLA), said the government has turned its back on the pre-legislative process that it had requested: "It has rejected most of the findings made by [Defra] and the joint committee. It has denied the request of a right of appeal, despite [Defra] describing the lack of one as a 'fundamental weakness'. It is also surprising that the government has now ruled out the possibility of compensation. One of the few positive aspects is that the right of access will not automatically go up estuaries to the first foot crossing, but will stop at the mouth of the estuary unless there is an overriding reason to go further. However, with no right of appeal or compensation, there is no check."
A spokesman for Defra said: "As our response says, our view is that the framework of the draft Marine Bill provides sufficient flexibility in the alignment process to avoid situations where the coastal access rights will cause significant financial loss. The secretary of state has a duty to aim to strike a fair balance between the interests of the public and others with a relevant interest in land."
(07/10/08)
Legal News Analysis
7. Home building sector will become “anti-competitive”
A mixture of government policy and regulation will make the UK house building sector anti-competitive, according to Gillian Charlesworth, the Royal Institution of Chartered Surveyors' (RICS) director of external affairs. She was commenting on the Office of Fair Trading (OFT) market study, 'Homebuilding in the UK', published on 25 September 2008, which examines competition in the house construction sector up until the 2007 housing downturn.
The study found, first, that housing developers investing in land for which planning permission had been granted, and who held it back from the market (land banking), had not thereby behaved anti-competitively. Rather, developers had land-banked as a means to help smooth out their business fluctuations, caused particularly by land availability restrictions and planning approval unpredictability.
John Fingleton, OFT chief executive said the study "found the homebuilding market to be generally competitive, with no evidence that individual homebuilders have the ability to restrict supply in order to inflate prices or to hoard land for anti-competitive reasons".
Second, the study found that the existence of poor consumer service standards for house buyers did reflect a lack of competition between developers, and wants the industry to develop a code of practice to help reduce this problem.
"We understand what the study says, but eventually larger builders will get into a very dominant position," Charlesworth says.
"The problem is that developers are not able to get their hands on big enough pieces of land to do the sort of developments that are required, and there is evidence that they are buying up smaller builders for their land to achieve that."
That means that some of the matters that the OFT says now pose no threat to competition, like land banking, will become competition issues, she believes.
She agrees with one of the study's conclusions that land-banking activity could be reduced if homebuilders were not constrained by the availability of suitable land.
"There is really no overview of the level of land that is needed for home building--we have been saying that for a long time. Some quite drastic thinking is needed to address that."
As for planning application delays and unpredictability, "they are major factors which mitigate against building the houses that we need in this country, and they make people behave in certain ways such as developers hanging onto land and also building it up through the purchasing of smaller builders," she says.
Part of the problem is "that we have more than 300 local authorities often taking different approaches to planning," she says. "But I think that there is no political appetite for removing local democracy by devolving decisions to planning professionals, or where planning committees could be looking at the bigger issues in a more strategic way."
The sheer amount of money spent by developers on solicitors and consultants to negotiate their way through the planning system showed "how the system doesn't really work on any front," she adds. "In general, a more strategic approach needs to be taken. Planning legislation has been built up over many years and frankly probably needs root and branch reform."
(02/10/08)
Legal News Analysis
Articles
1. The new guidance on technology and construction courts – where do I start?
Journal: Construction Law Journal
Citation: (2008) 19 8 Cons.Law 23
Issue date: 1 October 2008
Author: Paul Newman
Summary: Discusses the primary criteria for transfer between courts. Many construction professionals know that the Technology and Construction Court (TCC) is 'their' court. The transfers occur as the weight placed on specialist technical evidence is such that use of a specialist division of the court is appropriate.
2. Changes to make for ambiguity
Journal: Construction Law Journal
Citation: (2008) 19 8 Cons.Law 12
Issue date: 1 October 2008
Author: Michael Phipps
Summary: One compelling reason for loosing traditional reluctance is that insurance provisions in old versions may no longer match the insurances available. All to often, work is carried out on invalid instructions and is valued and included in amounts certified for payment. Provided that nothing goes wrong no-one notices or even cares. Discusses the importance of culture change in respect to this issue.
3. Fair payment advice ignored
Journal: Construction Law Journal
Citation: (2008) 19 8 Cons.Law 14
Issue date: 1 October 2008
Author: Tom Pemberton
Summary: The OGC's Guide to best 'Fair Payment' practice is a recent example of an initiative by the government to promote best practice in construction procurement by the public sector.
The recommendations made in the Guide are not particularly innovative, having been foreshadowed in historic reports by Sir Michael Latham and others. The Guide has provided the framework for the NEC3 and PPC2000 drafting bodies to issue their own 'fair payment' options. JCT is expected to follow suit. However, there is little evidence of widespread compliance with the Guide to date. It remains to be seen, therefore, whether the NEC3 and PPC2000 'fair payment' drafting will be widely adopted.
4. Pros and cons of DIY
Journal: Estates Gazette
Citation: Estates Gazette, 11 October 2008, 172
Issue date: 11 October 2008
Author: Matthew Bonye
Summary: Explains why provisions must be fully complied with and outlines the pitfalls that await the unwary avoided when it comes to Jervis v Harris clauses. These clauses enable landlords to inspect tenanted premises, serve a repair notice on the tenant, carry out repairs when the tenant has failed to do so and recover the cost as a debt.
5. Trying to keep a roof above one’s head
Journal: Estates Gazette
Citation: Estates Gazette, 11 October 2008, 175
Issue date: 11 October 2008
Author: Sandi Murdoch
Summary: Explains many of the rules governing claims to co-owned property relate to disputes that arise when married or cohabiting couples split up. Aside from the emotional upheaval for all concerned, the law often has to decide how to leave each party in as good a position as possible to keep a roof over his or her head.
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