Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) Llp

Blog | Construction

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The recent decision made by the Court of Appeal in Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) Llp [2022] EWCA Civ 823 (21 June 2022) has overturned the earlier Technology and Construction Court (TCC) decision; now confirming that the significant benefit of adjudication can be available to a wider range of parties involved in a construction project.  From the perspective of our education clients, the decision in this case is likely to have an effect on the procurement process and those who are to benefit from collateral warranties and other construction documents.

What is Adjudication?

Adjudication was introduced by the Housing Grants, Construction and Regeneration Act 1996 (the “act”). It offers a relatively quick dispute resolution procedure by an appointed adjudicator, usually in just 28 days. The adjudicator’s decision is temporarily binding until the dispute is finally determined by court proceedings, arbitration, or settlement; albeit that the decisions are largely followed without the need for such additional enforcement measures to be taken.

Under Section 104(1) of the act, the statutory benefits of adjudication only extend to certain types of agreements – those defined as “construction contracts” for the carrying out of “construction operations”.  This case was therefore of great interest to the construction industry as it shed light on what the courts would interpret as a construction contract which fell within S104.

Background

Abbey Healthcare (“Abbey”) was the tenant operating a care home.  Defects in the works were notified to Simply Construct (“Simply”), but were carried out by another contractor. Following completion of the works, Simply was required to execute a collateral warranty in favour of Abbey. This collateral warranty was executed four years after practical completion of the original works, and some eight months after the completion of remedial works.  Claims were brought by adjudication to recover losses relating to the defects. An adjudicator’s award was made in favour of Abbey, but enforcement was resisted by Simply on the basis that there was no implied right to adjudicate under Abbey’s collateral warranty.

The TCC had found in favour of Simply.  The warranty was to be construed against the factual background and the timing of its execution.  The warranty was executed after the works had been completed and defects remedied by another contractor. It was therefore a warranty only of a state of affairs and could not be construed as an agreement for the carrying out of construction operations.  The TCC therefore concluded that Abbey’s collateral warranty was not a construction contract for the purposes of the Construction Act.  There was no contractual right for Abbey to adjudicate under the Construction Act and so the decision in the Abbey adjudication was not enforced.

Court of Appeal decision

The Court of Appeal, by majority decision, has overturned the decision of the TCC.  It has been held that Abbey’s collateral warranty was a construction contract for the purposes of the act and there was a statutory right to adjudicate.  This was the case, notwithstanding that the warranty was signed years after the works were complete. The timing of its execution was not held to be determinative. Instead, the wording of the warranty was key.

Taking here some of the key parts from Lord Justice Coulson’s decision, he reasoned that:

  • There is no reason to limit the words of s.104(1) to refer only to the primary building contract.  A collateral warranty may, therefore, be capable of being a construction contract for the purposes of s.104(1). What may be critical is whether the warranty is in respect of the ongoing carrying out of construction operations, on the one hand, or is in respect of a past and static state of affairs, on the other.

  • Simply had warranted to Abbey that it "has performed and will continue to perform diligently its obligations under the contract." Therefore the warranty plainly set out the standard to which the construction operations would be carried out. That was by reference to the detailed terms of the building contract. To that extent, the building contract is the marker or standard denoting the level of quality that Simply Construct was required to achieve

  • Simply Construct was warranting that, not only had they carried out the construction operations in accordance with the building contract, but they will continue so to carry out the construction operations in the future. That is an ongoing promise for the future. As a matter of common sense, this is "an agreement for the carrying out of construction operations". It is not a warranty limited to the standard to be achieved; neither is it a warranty limited to a past or fixed situation. It is a warranty as to future performance. It is that which differentiates Abbey’s collateral warranty from a product guarantee.

Although the Abbey collateral warranty was executed after the works had been completed, it was retrospective. It made a promise both as to the standard of past work and to the future carrying out of work to the same standard. It was therefore an agreement for the carrying out of construction operations which had retrospective effect. Once that is accepted, the delay between the completion of the works and the execution of the warranty does not matter. Otherwise arbitrary lines would start to be drawn. For example, in this case, it was inferred by the judge that four years was too long. But what about two years? A year?

As Abbey’s collateral warranty contained future-facing obligations and was retrospective in effect, the date of execution was ultimately irrelevant. The warranty is a construction contract.

To find otherwise, would in Lord Justice Coulson’s judgment, be “wholly unsatisfactory”. It would also encourage contractors not to sign collateral warranties until after they had finished as many of the construction operations as they could. On the basis that, in such circumstances, whatever the wording of the collateral warranty, they could avoid the implication of the act and therefore avoid being the subject of a claim in adjudication.”

The decision has brought welcome clarity to the interpretation of the act and will have far reaching, positive implications for the various stakeholders in any construction project and also confirms the availability of an alternative route to recovery of costs avoiding costly litigation.

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Chloe Fellowes is a proactive Paralegal with a demonstrated history of working in the legal services industry.

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Don’t waste money on space you don’t use! Re-gear

Blog | Real Estate

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With many companies now operating a hybrid working model following the work from home directive in 2020, many businesses no longer need the amount of physical space they once did.  Businesses should not go on paying for unused space, and waiting for their leases to expire, so what is the answer?  Re-gearing a commercial lease could be the financial solution.

What does re-gearing a lease mean?

Re-gearing a lease involves a landlord and a tenant deciding to change the terms of the lease. From the tenant’s point of view, this involves changing the terms consensually with the landlord to meet their interests.  There are often commercial levers on both sides of the negotiating table that make this process an attractive and mutually beneficial arrangement.

In response to the pandemic, businesses quickly invested in technology and platforms which made working from home easier than ever before. Now restrictions have eased many workforces simply do not want to go back into an office environment full time, with a recent survey showing that 57 per cent of employees said they preferred hybrid working – splitting their week between office and home.  With less people onsite every day, offices can now be smaller while still accommodating employees’ needs.

When re-gearing a lease, all terms can be changed/negotiated such as rental rates, length of term, underletting, and issues relating to service charge. From a tenants perspective understanding what works for their business is key to getting the right deal from their landlord.

With inflation at a 40 year high, any way of mitigating the impact of rising inflation has to be worthy of consideration and with premise costs making up such a large proportion of a business’ expenditure – working to reduce that can only be a good thing.

For tenants, re-gearing a lease can allow more flexibility than simply switching to a smaller office, enabling them to transform the space into one that works more efficiently for the business. Many companies are choosing to repurpose their traditional office space into a ‘hub’ for employee collaboration and socialising. This creates the perfect opportunity for companies to really think about the needs of their business and raise any potential layout changes or improvements to the building that may be needed.  Offices can no longer be ‘one size fits all’ but should have features bespoke to the individual needs of the company.

The advantages of re-gearing can be attractive to landlords too, for example they may be persuaded to re-gear the leases to increase the value of their portfolio. Re-gearing a lease can also provide more certainty for landlords, as the lease could be renewed prior to the anticipated renewal date. Landlords would rather have renegotiated leases than vacant premises and have to pay empty business rates. Compromising with tenants and allowing them to adapt offices in line with their needs may mean that they become more invested in the space and are less likely to move in the future. If a tenant wants refurbishment or alterations, then they may want to secure a longer lease term.

A major benefit of re-gearing is that it can be done at any point during the lease term, as long as there is mutual agreement. It is important for both parties to maintain a good relationship and regular dialogue. For tenants, this means ensuring that there are no rent arrears that need to be paid, as well as keeping the space in good condition. Basics like this make it more likely that both parties will be open to negotiation, making the process more straightforward for all involved. If the relationship is strained or logistics mean that negotiation is challenging, it may be possible to be in contact via the agent.

As with any change to legal documentation it is so important for both parties that the re-geared leases are properly documented. The consequences of the new documentation not being properly considered could include the tenant having to pay extra stamp duty land tax, or the tenant losing their security of tenure. Like any legal contract, if any part of the document is unclear, there is greater risk of a lawsuit, costing both parties valuable time, money and resources, so seeking expert advice early on can help to ensure the process goes smoothly.

Re-gearing leases gives both tenants and landlords the opportunity to check that it is still fit for purpose and beneficial for both parties. It can provide an immediate solution to the problem of wasted space and a way of minimising the impact of rising inflation by reducing the business’ outgoings. It can allow companies to modernise, minimise their expenditure and improve their employees’ work/life balance, while simultaneously giving landlords the opportunity to increase their return on investment. Essentially, re-gearing a commercial lease can be a win win situation.

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The Building Safety Act 2022 – how it will affect house builders

Blog | Residential Development

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Finally, nearly five years on from the tragedy at Grenfell in 2017, the Building Safety Bill has received Royal Assent, providing the construction industry with the Building Safety Act 2022 (“the Act”). The 262 page act is the first step towards lasting change in the construction industry, and the safety of dwellers across the UK for years to come. The various parts of the act will be implemented into law in stages over the next few years.

This update is the second in our series (our first having provided an introduction to the act here) and will provide a whistle stop tour of what we consider to be the key provisions of the act for house builders and their potential ramifications. Certainly, some of the new provisions have the potential to shock the construction and development industry given the significant changes involved.

Key provisions of the act

The act primarily applies to England, with certain provisions also applying in Scotland, Wales and Northern Ireland.

1. Stages of Project Management – the three ‘gateways’

The act has established three main ‘gateways’ that must be considered and satisfied during the design and development of higher-risk buildings (which is a building in England that is at least 18 metres in height or has at least seven storeys, and is of a description specified in regulations made by the Secretary of State (which hasn’t been specified as of yet)). These ‘gateways’ are used to determine whether a building can be occupied. The ‘gateways’ are:

  • Planning – At this stage, applicants for planning permission must satisfy that they have considered wider issues in relation to fire safety through the production of a fire safety statement. As such, fire safety considerations can no longer be an afterthought, but instead a decisive factor in relation to the construction of the building.

  • Pre-Construction – The regulator (which is the HSE as the Building Safety Regulator ‘the Regulator’) must be satisfied at this stage that the planning proposals comply with Building Regulations and address how a ‘golden thread’ of important safety information will be held as well as any other safety management expectations.

  • Completion – The regulator is given the opportunity to assess and determine whether the works to the high-risk building have been carried out in accordance with Building Regulations, and proceed to undertake a review of the completed works. If satisfied on all fronts, the regulator will then issue a completion certificate and the building will then be registered on the system. This must happen before any building can be occupied.

These ‘gateways’ are an essential requirement introduced by the act which create a necessary focus on safety management from the get go.

2. Defective Premises Act 1972 (DPA) – Scope and Limitation

Currently, the DPA imposes a duty on those involved in building and designing new dwellings to work in a professional or workmanlike manner, to use proper materials and to see that the completed dwelling is fit for habitation.  This duty is owed by all persons taking on such works and clearly extends to house builders.

The act introduces two fundamental changes to the DPA.

  • The act has widened the scope of the DPA to include refurbishment and rectification works which were otherwise excluded, providing those who are doing the work are doing so in the course of business. This ensures that the duties under the act apply to a wider scope of works, therefore providing a higher level of protection to occupants. This will only apply going forward (prospectively).

  • The act extends the limitation period under the DPA (which is expected to come into force within the next two months):

    • From the original six years to a much longer period of 15 years for those claims which arise after the act comes into force); and
    • From six years to an astonishing 30 years for claims which arose before the act became law.

This is a significant change from the previous six year limitation period, and should be recognised as an important shift that could have an array of potential ramifications that boil down to even the simplest of issues, such as the way in which project records should be kept.

3. Building Safety Levy

The act provides a new power to the Secretary of State to introduce a charge that will be payable by any developer when seeking permission to develop certain high-rise buildings. This charge is referred to specifically as the Building Safety Levy.

This levy will become payable at gateway 2, the pre-construction phase, and acts as a further incentive for developers to comply with the various safety requirements introduced by the act.

4. Building Liability Orders

The principle of a Building Liability Order was only introduced as a concept late in the day.

It was introduced to address the possibility that certain developers might escape civil liability for safety defects because they had carried out the works using a special purpose vehicle (SPV) or shell company.

Its effect is that the act will grant a power to the High Courts to allow them to extend specific liabilities for one company to any other associated companies and make them liable. The High Courts will have the power to do this where it considers that it is ‘just and equitable’ to do so.

In practice, this may have the effect of piercing the corporate veil, which is a significant development and potentially a worrying time for those developers that operate using SPVs.

Conclusion

The act will have far reaching consequences for house builders, particularly as it will be necessary to:

  • Ensure that it understands the requirements that will be necessary to ensure compliance under the three ‘gateways’, as well as factor in the building safety levy into its build cost analysis that will payable at gateway 2.

  • Ensure that its document retention policies are amended to take into account the changes to the limitation periods under the DPA. For those developments that may be subject to the retrospective limitation period change, house builders should ensure as far as possible to retain any relevant project records.

House builders will also need to consider the effect that building liability orders may have on its approach to procurement, although how this will operate in practice remains to be seen.

Moving forwards, we will keep you updated on when the various parts of the act will be implemented into law and any notable examples of the act in operation.

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Biodiversity Net Gain – opportunities and obligations for developers and landowners alike

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With the ink still wet on some of the policies and agreements to come out of COP26, sustainable development is high on the political agenda.  Improving biodiversity is a major issue for landowners, developers and planning authorities and biodiversity net gain is a method utilised to improve a site's value – the higher the biodiversity net gain, the potentially higher the value, and who doesn’t want that?

What is meant by biodiversity?

The biodiversity of an area is the variety of plant and animal life in a particular habitat.  A high level of biodiversity is considered to be desirable and important.

What is biodiversity net gain?

The act requires, amongst other things, that all development schemes in England must deliver a mandatory minimum 10% biodiversity netgain which must be maintained for a period of at least 30 years.   

Biodiversity Net Gain follows a mitigation hierarchy – four steps designed to result in a win- win situation. Wins for the environment and wins for the developer. 

The four steps 

Avoidance – avoiding any impact completely such as changing the location of development 

Minimisation – reducing the time, extent, impact, intensity of the development. 

Onsite restoration – measures taken to restore the habitat involved.  This step is particularly necessary if avoidance and minimisation were not possible in the first instance. 

Offset - measures taken to compensate for the adverse impacts after the previous three have been explored in full. 

What does this mean for land developers?

Local planning authorities have required similar mitigation measures from developers via the local plan system for a number of years. However, the new Act will bring the existing requirements of the planning system into statute, giving some form of certainty in terms of what is required. The preference is for mitigation measures to be provided on-site, but where this is not possible, the developer should aim to provide and secure mitigation measures in terms of local habitats.

The key for developers with this new law is to ensure that any proposals are brought forward with BNG in mind. Measures should be factored in and accommodated from an early stage, to avoid pitfalls further down the line. Creative thinking and additional planning throughout the process will prevent pitfalls further down the line. Engaging with the local planning authority during the process will also demonstrate that the BNG process has been thoroughly engaged with.

What does this mean for landowners?

By 2028 the farm subsidy, known as the Basic Payment Scheme will be eradicated and in its place (to a degree) the new Environmental Land Management Scheme (ELMS), set under the Agriculture Act 2020, will be fully integrated. The ELMS is based on the philosophy of “public money for public goods”, and biodiversity (along with all natural capital considerations) will play a huge role within the various schemes planned.  What we don’t know at this stage is how the private sector contracts between developers and landowners will sit with the ELMS and whether there will be the ability to benefit from both. (‘Stacking’ is the issue of whether the same land can ‘stack’ one payment upon another).

It would appear that there is an opportunity for landowners and farmers to take advantage of developers offsetting their BNG requirements, by adding a new revenue stream for any farm business or landed estate, which may be more lucrative than what the ELMS have to offer. However, a word of caution. All businesses will need to consider their own carbon footprint before embarking on entering into any offset BNG contracts, to ensure they can reach their own net zero carbon target.

Furthermore, as this is still a new concept, values need to be carefully considered. With land needing to be set aside for BNG for a minimum of 30 years (with the Secretary of State having powers to increase this as it sees fit), it might have the negative effect of reducing the capital value of the land. This needs to be compensated by the offset contracts between landowners and developers. Tax planning for future generations also needs to be considered for landowners.

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Anna has 15 years’ experience advising on all aspects of planning, compulsory purchase and highways law, acting for a variety of public and private sector clients throughout her career including landowners, promoters, developers, local authorities, central government agencies, regional development agencies, and various NHS Trusts.

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The rationale for rationalising housing stock - post-pandemic

Blog | Social Housing

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The COVID-19 pandemic has perpetuated many challenges faced by organisations across the globe, and now the looming energy crisis, coupled with the ‘Green’ agenda, and an increased focus on customer service is placing further pressure on already stretched resources in the social housing sector.

As these financial and performance pressures continue to mount up, registered providers (“RPs”) are increasingly needing to find greater efficiency within their portfolio and services. One approach which is becoming more commonplace among RPs, is stock rationalisation.

What is a stock rationalisation?

Stock rationalisation is, for the most part, a cost management tool. It involves a strategic restructuring of the ownership and/or management of a stock portfolio in order to raise finance and/ or to reduce outgoings, which consequently improve the RP’s ability to deliver on performance and its financial objectives.

Ultimately, the core brief for RPs has always been to invest in the sustainability of communities and there are often easy and tangible gains to be made by embracing rationalisation.

How is rationalisation implemented?

There are various ways to implement rationalisation and these include stock transfers, stock swaps and sales on the open market. As with all projects, proper planning is essential to ensure material considerations are explored and the correct structures or mechanisms used. For example, the value of the portfolio in question is typically the key driver and negotiating tool in a rationalisation project. It is therefore important to ensure the correct valuation methodology is applied, as there are various independent valuation methodologies that can be used to calculate the net worth of the stock and each with potentially differing outcomes.

Additionally, the requirement for tenant consultation is sometimes viewed by RPs with a degree of trepidation, but it needn’t be prohibitive to rationalisation. Addressing concerns from both the residents and providers’ perspectives are key to engagement and a smooth process, and many rationalisation deals simply include a condition for consultations to be completed prior to completion.

Why should RPs consider rationalising their stock?

The benefits are many and registered providers typically consider rationalisation in order to improve their ability to meet financial and/or performance objectives. Reasons will vary from RP to RP, depending on both the condition of their stock and its geographic location, and this will likely reflect the RPs overall strategy.

A rationalisation programme will sit within the RP’s asset management strategy (and may in some cases form a specific aim within the overarching corporate plan), but the overriding aim is usually one or more of the following:

  • An RP may find that it has inherited ageing or underperforming stock. This is especially true of many RPs whose portfolio consists of a large number of units inherited from a large scale voluntary transfer from a local authority. This can result in the RP experiencing escalating repair and service costs, especially in the current carbon reduction push. It may be that it is much more effective for the RP to sell these assets in order to improve the reporting of its carbon mitigations, as well as reduce the costs of periodic maintenance and repairs.

  • The terms and conditions in lenders’ finance packages are not always necessarily appealing to the balance sheet. Rationalisation can help raise finance outside the standard lenders’ requirements and process, and this is of course desirable when a certain part of the registered provider's stock is underperforming due to a variety of factors which might include, for example, increased management and service costs.

  • Concentrating stock to a specific geographical area brings numerous benefits, through boosting the RP’s footprint in an area it wishes to gain or extend visibility and presence. Invariably, the main drive for this is due to cost efficiencies as it costs more to manage a dispersed stock portfolio and by concentrating the housing stock to a smaller (and perhaps more strategic) geographical location, RPs are able to reduce maintenance expenses while also improving service response times by reducing travel time and distance.

  • A strategically reviewed portfolio can also go a long way towards improving tenant and community engagement, resulting in empowered and involved residents - an especially important focus area for the regulator currently.

The cost efficiencies brought by rationalisation are often experienced within a relatively short period of time, and so the effectiveness of using rationalisation as a tool toward a healthier balance sheet is not to be underestimated.

It is of course not just the selling RP who may look to rationalisation to assist with wider issues. Many providers can find real value for money in gaining additional stock in their area if they identify an opportunity with a selling provider. This can be a real boon for the purchasing RP looking to increase their housing provision in a local area, especially given the current high levels of competition for section 106 sites (which is the usual source of new properties for many smaller RPs).

What we can do for you

The rationalisation process isn’t necessarily complex, but there are numerous considerations to address, ranging from the structure of the proposed acquisition and/or disposal programme to avoiding the many pitfalls rationalisation can bring.

There are various predictable surprises in a rationalisation project which can be avoided through careful planning. These include the examples mentioned above, as well as operational, tax and accounting issues that can occur as a result of the rationalisation programme, as well as TUPE and data protection considerations.

At Shakespeare Martineau, our advisors will engage with you and your team at the outset to ensure the appropriate structure is established and material considerations properly explored. We will work collaboratively with your intermediaries and professional team through every step of the rationalisation journey, and by sharing our experience from previous transactions, we will ensure that you benefit from the strength and breadth of our expertise.

If your organisation is interested in pursuing a rationalisation programme or would like further information regarding the above, please call any of our advisors for an informal chat.

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Joanna’s expertise encompasses advising on social housing development transactions, from site assemblies to larger scale phased sales and purchases.

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Joanna Lee-Mills
Partner

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Backed by specialists and an in-depth knowledge of social housing, residential and commercial development, planning and construction as well as housing management, employment, finance and funding, corporate and commercial law, we build your team of advisers to help you realise your goals.

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Nutrient neutrality - how might it affect development

Blog | Social Housing

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Nutrient pollution is a big environmental issue for many of our most important river catchments and waterbodies. In freshwater habitats and estuaries, excessive levels of nutrients can cause the rapid growth of certain plants through the process of eutrophication. This is damaging to wildlife.

The sources of nutrients generally include sewage treatment works, septic tanks, livestock, arable farming, industrial processes and urban runoff. Where sites are already in unfavourable (poor) condition new development can make matters worse.

Nutrient neutrality is one approach to ensuring that new housing development does not lead to an increase in the levels of nutrients flowing from the development to the receptor (the protected river and its catchment). In the affected areas developers must prove their schemes would be nutrient neutral by demonstrating how they would remove or offset the full amount of nutrients anticipated. At its simplest level this could be through demonstrating through the use of a ‘calculator’ that after development a scheme would generate the same or less nutrient outputs than the site was already contributing before development.  However in many, if not most developments, additional interventions may be required to ensure that development does not increase nutrient levels added to sensitive sites.

In practice, this could mean that developers may need to identify, fund and in some cases deliver additional offsite and onsite mitigation measures.  Onsite mitigation measures, such as the adoption of water efficiency measures and the appropriate use of sustainable drainage could help, especially if your site is large, previously developed (and in particular already discharges wastewater), or offers the potential to include measures to reduce the levels of nutrient in the watercourse or one of its tributaries directly (for example through the construction of reed beds, silt traps or other measures).  If mitigation has to be offsite these can take time to identify and deliver, meaning development could be delayed.  It is expected off site measures would be identified and coordinated by local authorities. Clearly, these could take time to identify, although the government has made some funding available to councils, presumably to help address the need for offsite measures to be identified.

Additionally, wherever you are planning for development, which is caught by this requirement, it is likely that you will need to include mitigation to specifically deal with the impact on a sensitive site.  Wherever you include measures specifically to do this, there is a requirement for the council to prepare a Habitat Regulation Assessment (HRA), sometimes called an Appropriate Assessment. In practice, many councils will not be geared up, or have the expertise to do this so developers may be asked to submit a shadow HRA to assist the council in discharging their obligations in respect of the Habitat Regulations.

Finally, it’s always worth checking the areas affected.  Catchments rarely cover the whole district, though given the way the government has published recent announcements you may think that whole districts are affected. In practice, it may only be a small or localised part of the council area subject to this additional requirement.  It is also worth being mindful of where any foul flows from your new development go.  If your site is on the edge of the catchment it is always worth checking which treatment works will receive any foul water. In some instances, the foul water from a development that sits inside a sensitive catchment is taken out of the catchment to treatment works that discharge to watercourses unaffected by nutrient neutrality requirements.  Where this is the case it significantly reduces the potential for development to affect water quality in the sensitive site.

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Kevin works with clients on a wide range of real estate maters to facilitate the delivery of their affordable housing developments.

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The nationally significant infrastructure project regime and development consent orders - how to have your say

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I have been served with a formal notice concerning a proposed DCO - what does this mean, what do I need to do and how can we help?

Q. What is a Nationally Significant Infrastructure Project and who decides them?

A: Nationally Significant Infrastructure Projects (“NSIPs”) are major infrastructure developments in England and Wales. These include projects such as power plants, large renewable energy projects, new airports, airport extensions and major road projects. A Development Consent Order (“DCO”) is the means for obtaining planning permission and a range of other consents for developments categorised as NSIPs – note this can include the use of compulsory purchase powers to acquire any land and rights required for the project. Instead of applying to the local authority, the developer must apply to the Planning Inspectorate who will consider the application and make a recommendation to the Secretary of State.  The relevant Secretary of State will then decide whether a DCO is granted. The notices served as part of the DCO process are different to those you will see for straightforward planning applications and compulsory purchase orders.

Q. How does the NSIP process work?

A. The process comprises six key stages with statutory timescales, including pre-application, acceptance, pre-examination, examination, decision and post-decision stages. From accepting an application to making a decision, the whole process should take approximately 15 months. Previously, the average time taken for major applications was around 2 years.

Q. How can a social housing provider get involved and have a say on a project?

A. The best chance to influence, for example the design, layout, or location of a NSIP takes place during the pre-application stage before the applicant finalises its application and submits it. The opportunity for this is during the public consultation period. The applicant must formally consult on its proposed application before it is submitted. If you wish to be involved, you should take part in the applicant’s pre-application consultation. Once the application is submitted you can be involved by making a relevant representation and then registering and participating in the examination.

Q. We have been identified as a statutory consultee - what does this mean?

A. Statutory consultees are organisations or individuals that are legally required to be consulted on NSIPs. If you have been consulted on a proposed application, is it likely that you either have an interest in the land subject to the DCO or could be affected by a project in such a way that you may be able to make a claim for compensation.

Q. Our land/interest has been identified as land which is subject to proposed compulsory acquisition or land as being affected by a project in such a way that means compensation may be payable– what should we do?

A. Often a social housing provider will not be aware of a proposal for a NSIP until it receives notice of the formal statutory consultation. While a DCO can authorise the compulsory acquisition of land, various rigorous policy tests must be met before compulsory purchase will be authorised. Objections which relate solely to compensation values for compulsory acquisition will be disregarded, however, it may be that you are able to argue that the various tests are not met.  It is crucial that you engage in the process as early as possible to secure your position. With this in mind, you should consider making an objection or relevant representation so as to put a marker down and alert the applicant that it will need to proactively engage with you and/or that you are challenging their grounds for taking powers of compulsory acquisition. We can advise you on how best to deal with the compulsory acquisition negotiations, the split of compensation for shared ownership properties and also how to deal with similarly affected tenants or leaseholders whilst also protecting your own interests.

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Julie Russell has vast experience working on all aspects of legal planning, development and infrastructure work.

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Orbit Homes plants pear tree at Daventry development to mark Queen’s Platinum Jubilee

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In celebration of the Queen’s Platinum Jubilee, a pear tree has been planted at Orbit Homes flagship development in Daventry, Micklewell Park.

In celebration of the Queen’s Platinum Jubilee, a pear tree has been planted at Orbit Homes flagship development in Daventry, Micklewell Park.

The Williams pear tree was planted on Wednesday, 30 March, having been provided by and planted in collaboration with leading law firm Shakespeare Martineau as part of the Queen’s Green Canopy (QGC) – a unique initiative created to mark Her Majesty’s Platinum Jubilee this year.

Colin Dean, sales and marketing director at Orbit Homes, said: “We are proud to plant this pear tree to celebrate the Queen’s Platinum Jubilee and add to the biodiversity we are creating at Micklewell Park. We consider a home’s surroundings to be just as important as the living spaces inside and know that sustainability and wellbeing go hand-in-hand for an improved quality of life for our residents.

Micklewell Park will be surrounded by beautiful green spaces and will include 20 allotments, newly-constructed cycle paths and newly-planted woodland. We know our new pear tree, which we planted in collaboration with our partners at Shakespeare Martineau, will be appreciated by the new neighbourhood and will be flourishing once the first phase of the development is completed in spring 2023.

With a focus on planting sustainably, the QGC initiative aims to encourage the planting of trees to create a legacy in honour of The Queen’s leadership, while benefitting future generations.

Shakespeare Martineau is pending B Corporation status – where organisations are legally required to consider the impact of business decisions on their people, customers, suppliers, communities and the environment – and has committed to 30 ambitious responsible business pledges, including becoming carbon negative by 2030 and is on this journey already with all registered office hubs using 100% renewable energy.

Rachel Gwynne, partner and head of social housing at Shakespeare Martineau, said: “We are delighted to have partnered with Orbit Homes to plant a tree in honour of the Queen’s Platinum Jubilee.

While this is a small contribution in terms of biodiversity, it will have a positive impact on the community once the development has completed – nourishing the neighbourhood with greenery and fruit, while helping to add to the nationwide drive to mark the Queen’s 70 years of service.

“We look forward to residents enjoying the fruits of their efforts, quite literally, for decades to come.

Micklewell Park comprises 450 homes – featuring one and two-bedroom apartments and two, three, four and five-bedroom houses – which will be a mixture of rented, shared ownership and market sale properties. The development will be embraced by nature and green spaces, including eight acres of woodland, and has been designed for a desirable quality of life today and a sustainable future.

The first phase in the Micklewell Park development – comprising 108 homes – is scheduled to complete in March 2023 and will include 20 allotment spaces, electric vehicle charging points, two bus stops and land allocated for a new primary school. Two further phases will commence thereafter.

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Rachel provides strategic advice and support to housing associations, charities and other not-for-profit organisations.

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The new Commercial Rent Arrears bill - not the end to landlords’ woes

Blog | Rent Disputes

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The Commercial Rent (Coronavirus) Bill finally received Royal Assent on 24 March 2022 and has established a legally-binding arbitration process for landlords and tenants to settle certain outstanding debts arising from the national lockdown period between 21 March 2020 and 18 July 2021.

What is the bill?

The bill has been introduced to coincide with the end of multiple restrictions that have been placed on landlords since late March 2020 – preventing them from recovering pandemic-induced rent arrears from their tenants.

It aims to encourage collaboration, keep disputes out of court, and avoid the time and costs of litigation.

For rent debts to be considered for the arbitration process, they must be attributable to 21 March 2020 and 18 July 2021, and the tenant must have been mandated to close by reason of coronavirus during that period.

Any rent debts outside of these dates won’t be subject to such restrictions which means landlords can sue and forfeit leases for rent arrears incurred by tenants who weren’t forced to close during Covid – such as essential retail and pharmacies.

Some sectors – such as non-essential retail and hospitality – were able to reopen before the above stated period due to restrictions being lifted. It is important to bear in mind that rent debts will not apply to those certain time periods for these industries.

The arbitration process

Either landlords or tenants can start the arbitration process. Currently, they have a six-month period from now to refer these protected debts to arbitration.

There are three stages of the process:

Pre-arbitration, which must be commenced within six months of 25 March, although this is likely to be kept under review. Prior to a referral, either the landlord or tenant needs to notify the other party of their intention of doing so.

Within 14 days of receiving this notification, the other party can respond, which will then allow for another 14 days before the formal referral can be made. As the process is currently only for six months, the pre-notification period should be started no later than five months in to allow for this period.

After this, the arbitrator must determine whether the criteria for the process has been met. This includes checking whether the tenant was adversely affected by COVID, if the tenant’s business is viable or would be viable if given relief, whether the debt relates to the protected period.

The arbitrator will then consider what relief should be granted to relation to the owed debts. They will determine how much the tenant can afford to pay and how quickly, as well as take the landlord’s position into consideration and whether any relief will jeopardise their solvency.

Any award the arbitrator makes has a payment deadline of 24 months from the day the decision is handed down.

How will this bill affect landlord and tenants?

The criteria for arbitrators to consider when making their decisions seems, for tenants, to be quite flexible in terms of assessment of their viability, whereas for landlords, these are pretty limited. The act says in assessing the solvency of landlords, the arbitrator must have regard to their assets and liabilities, including any other tenancies to which they are party, and any other information relating to the financial position of the landlord the arbitrator considers appropriate.

While the analysis of assets and liabilities might be familiar territory for landlords and their advisers, the reality is that the bill offers limited protections for landlords in this regard. The bill would appear to simply wish to avoid tipping landlords into insolvency by granting concessions to tenants, rather than positively seeking to improve the position of landlords.

However, it is important to remember that some landlords may be suffering considerably as a result of Covid and unpaid rent, leaving them unable to meet their loan repayments or pay their staff for example.

Within the jurisdiction granted, we would expect arbitrators to not only look at tenants’ viability in isolation and make sure they are seriously considering landlords’ positions during the process to ensure they are not being adversely affected.”

Considerations

Two major cases – brought by BNY Mellon and the London Trocadero – in relation to pandemic-induced rental arrears are currently making their way through the courts, with a decision in the Court of Appeal expected in June 2022.

Should these cases succeed, there is the potential for relevant rent arrears not to qualify as protected debts. And if there is no protected rent debt, arbitrators must dismiss any such referrals.

This means many tenants may not have a strong incentive to refer cases to the arbitration process immediately. Some may hold off doing so until those decisions have been made so an arbitrator doesn’t order them to pay something when they may end up having to pay nothing.

Given the uncertainties and the background, references to an arbitrator may get off to a slow start.

Preparing now

The introduction of this new arbitration legislation will play a crucial part in continuing to help landlords and tenants resolve outstanding rent arrears.

The key thing for landlords is to carry out an analysis of the arrears they are owed – look at the periods they relate to and check whether tenants qualify. Then, speak to a professional to work out what action can be taken in relation to both protected and unprotected debts.

It is also strongly advised that commercial landlords seek early legal advice on their position and strategy to maximise recovery. Advice may also be required throughout the negotiation process.  This can be important in continuing to protect their capital value and maintain bank interest covenants.

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James works with clients and colleagues to find effective solutions to property disputes and problems.

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Registered Providers Response to the “Homes for Ukraine" Initiative

Blog | Social Housing

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On 14 March 2022, the Department for Levelling Up, Housing and Communities (DLUHC) announced the launch of its Homes for Ukraine scheme for those fleeing the war in Ukraine.  The scheme is open to Ukrainian nationals and their immediate family members who were resident in Ukraine prior to 1 January 2022.

From 18 March 2022 UK residents were able to express an interest to act as a sponsor for Ukrainians (including families) to stay in their home.

The sponsors will be asked by DLUHC to provide homes or a spare room rent free for as long as they are able to, with a minimum stay of six months.  In return, the sponsor will receive £350 per month from the Government.

It is anticipated that customers of registered providers, whether they are leaseholders, shared owners or tenants may wish to apply to be a sponsor and the question will arise whether becoming a sponsor could potentially be a breach of a term of the customer’s lease or tenancy agreement.  Whether the lease or tenancy agreement is breached will depend on the specific terms of that agreement.  However, there are some general points that we will address below, which will help registered providers answer queries from their customers.

Customers with a Right to Buy/Right to Acquire Lease

Q1 - Are they allowed to take in lodgers?
Answer

Lodging usually occurs when a customer shares their home with another person (the lodger) but the lodger does not have any exclusive right to any part of that home. They will be allocated their own bedroom.

There is nothing within the standard right to buy or right to acquire lease that would prevent the customer to taking in a lodger to occupy a spare room at their home.

Q2 - Are customers allowed to sub-let their property?
Answer

Subletting occurs when the customer relinquishes occupation of their home and allows somebody else or another family to live there, usually for payment.

A standard right to buy/right to acquire lease would usually allow the customer to sublet the property with the consent of the landlord, not to be unreasonably withheld.

It is usually the case that the customer is able to sublet the property without consent if the customer is proposing to sublet the property to a tenant using an assured shorthold tenancy agreement.  However, we do not believe it is the Government’s intention that Ukrainian refugees become parties to assured shorthold tenancy agreements because their accommodation involves no payment from them to the customer.  It is not anticipated that the payment from the Government to the customer is intended to be classed as rent.

In any event, in order to avoid this complication, the Registered Provider is usually able to provide consent to a customer in the absence of an assured shorthold tenancy.

Q3 - Any other issues?
Answer

Most right to buy leases allow a payment to the registered provider for giving consent to a sublet. The registered provider is at liberty to waive this fee if they choose.

Customers with a Shared Ownership Lease

Q1 - Are they allowed to take in lodgers?
Answer

A shared ownership lease based on Homes England’s model lease does not prevent - customers from taking in lodgers to share the accommodation.

Q2 - Are customers allowed to sub-let their property?
Answer

It is a fundamental clause of all shared ownership leases that forbids customers from subletting their home. The Homes for Ukraine scheme does not allow sponsors to charge rent to the Ukrainian national. Therefore, it could be argued that the customer is not subletting the property due to the absence of rent. However, it is felt that because the Ukraine national is still occupying the whole of the property, that is sufficient to meet the requirements for subletting which in the case of a shared owner is not allowed.

Q3 - Any other issues?
Answer

No further issues.

Assured/ Assured Shorthold Tenants

The terms of a tenancy will vary between landlords but it is anticipated that the position of the assured tenant will be the same as that referred to above for shared owners.

Customers who own the freehold of their home

When a shared owner buys additional shares to their home (known as stair casing) so as to eventually own 100% of the property, they may also be entitled to have the freehold transferred to them. That freehold transfer might also include terms regulating in some limited circumstances how the property is used.

In those cases, it is not anticipated that there will be any restrictions on the customer applying for the Homes for Ukraine scheme.

Head Leases

Where the freehold of a property is owned by another corporate entity with the registered provider owning a head lease, allowing them to grant leases and tenancies to their customers, then the registered provider should check the terms of the head lease to ensure that there are no terms in it that might conflict with the Homes for Ukraine scheme.

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Gary is a social housing specialist who engages with all stakeholders to ensure landlords and property managers achieve their goals for their housing stock.

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Claiming Empty Property Relief – a tale of two halves

Blog | Commercial Property

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An important case, The Queen (on the application of the Secretary of State for Health and Social Care on behalf of Public Health England v Harlow District Council [2021], has brought some much needed clarity to the claiming of empty property relief on empty property - an area of contention for both landlords, businesses and the councils who benefit from the income.  Harsh words too from the presiding judge.

For many years, landlords have looked at ways of mitigating their exposure to business rates on empty properties. One way of doing this is to have a short-term occupation of the property for a period of at least six weeks, allowing the landlord to take advantage of empty property relief for a period of three or six months.

Over the years there have been a number of ways that landlords and businesses have sought to do this – from pop up businesses to storing documents, installing blue tooth servers transmitting marketing messages and even snail farms (the latter was unsuccessful).

Over time, business rates mitigation has become a business in itself and there are companies who work with landlords and portfolio managers, and when managed and implemented properly on a rolling basis, significant savings can be made.

Reduced income for councils

But, the councils do not like this and understandably so from their perspective. Business rates is a form of income for councils, who get to keep a percentage of the business rates they collect. They do not like giving reliefs and therefore many make it hard for landlords to claim.

To be eligible for empty property relief, the council must be satisfied that the property has been occupied for a period of at least six weeks. Rateable occupation is generally understood as meaning that there must be:

  1. Actual occupation (i.e. physical occupation);

  2. Exclusive occupation;

  3. Some value or benefit of the occupation to the possessor; and

  4. Possession for not too transient a period.
    (John Laing & Sons Ltd v Kingswood Area Assessment Committee [1949] 1 KB 344)

Over time, cases such as Makro Properties Ltd v Nuneaton & Bedford BC [2012] and Sunderland City Council v Stirling Investment Properties LLP [2013] (where Shakespeare Martineau LLP acted for the successful landlord at first instance and on appeal) have made it very clear that the bar for actual occupation is low. For example, in the Stirling case, a small blue tooth server installed in a large warehouse was found to be sufficient for the court to find that the whole of the property was occupied.

The biggest and consistent battle for landlords and tenants is over what amounts to beneficial occupation. Different councils have different interpretations of the rule and case law. Often what is acceptable to one council is deemed insufficient for another. Unfortunately, unless one of the parties is willing to back down, it comes down to a court to make a final ruling.

A process open to abuse?

There is evidence though, that councils abuse this position too. Going to court costs and even if successful, recovering all costs is rare, and the time incurred going through the process will never be recovered. There is also the inherent risk in litigation. For councils, however, the major costs and risks come a lot later. To obtain a liability order against a landlord for non-payment of a business rates bill (due to a dispute over empty property relief), the council only has to submit a list of all alleged debtors to the Magistrates’ Court, who will issue court summonses. The landlord then has to attend court to dispute the making of a Liability Order.

If the court can see that there is merit in the dispute, the matter will go forth to a trial. Unlike with the commercial courts, there is no requirement for the council to set out its case until after the summons hearing. There is also no court fee for the council to pay. Some councils, somewhat questionably, force parties to attend court to dispute the order of a Liability Order without having previously given proper consideration to their case.

The case of The Queen (on the application of the Secretary of State for Health and Social Care on behalf of Public Health England v Harlow District Council [2021], however, provides useful guidance.

The judge in this case had some harsh words for difficult “business rates mitigation hunting” councils and set down some directions on how these disputes should be dealt with.

Importantly, the Judge confirmed that:

What counts as beneficial occupation of a commercial property?

The case of The Queen (on the application of the Secretary of State for Health and Social Care on behalf of Public Health England v Harlow District Council [2021], however, provides useful guidance.

The judge in this case had some harsh words for difficult “business rates mitigation hunting” councils and set down some directions on how these disputes should be dealt with.

Importantly, the Judge confirmed that:

  1. The bar for beneficial occupation is not high. Actual use of the property, even minimal use, combined with an intention to occupy is sufficient for occupation. The use does not need to be substantial, and can be “whimsical or eccentric”.

  2. More importantly, occupation for the purpose of rates mitigation is beneficial occupation, regardless of any view held by a council over the morality of such a business.

The judge also provided a useful summary at Annex A of the judgment on when a property should be considered occupied, as well as a proposed protocol for resolution of these sort of disputes at Annex B. Annex B in particular, stressed that the council’s should provide written reasons for its conclusions and, if it remains in dispute, landlords should not pay the disputed amount.

Despite the judge finishing his judgment by saying that he hoped that “further challenges of this kind in “rates exemption hunting” cases will be few and far between” it is apparent that this message has not reached many councils, and we are still seeing the same arguments over and over. For now, the argument continues.

If you are in dispute with a council in over your liability for business rates, please contact Ben Humphreys at Shakespeare Martineau LLP, who has extensive experience in this area.

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Ben has a broad range of experience across all areas of commercial litigation, including breach of contract claims, professional negligence recovering large commercial debts, business protection claims and applications for injunctive relief.

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New Research - Our Green Homes Report: What buyers want

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More than three quarters (77%) of homebuyers are likely to consider a green home as their next property.

Green homes will have a significant influence on the UK reaching its net zero 2050 targets, but unless homeowners are happy to live in them, there will be little commercial benefit for housebuilders to construct them.

We wanted to understand the opinions, knowledge and demands of those in the market to purchase a new home – having either recently purchased, or looking to purchase a property in the next 12 months.

We asked 500 first time buyers and ‘second steppers’ whether they were likely to purchase a green home, which green features they were willing to pay more for and their reasons for choosing – or not choosing – a green home.

Key findings

  • More than three quarters (77%) of homebuyers are likely to consider a green home as their next property

  • Top reasons for wanting a green home included it’s ‘better for the environment' (39%), it will ‘save me money in the long run’ (27%) and ‘I want to reduce my energy bills’ (35%)

  • Consumers confirm they are willing to pay more for better energy efficiency and renewable energy sources in their homes.

With bills high on the agenda of many homeowners, now is a good time to increase adoption of green home technology, ahead of 2025 building regulations for net zero coming into force.” said Neil Gosling, head of residential development at Shakespeare Martineau.

Our research also shows that buyers are willing to pay more for features like renewable energy sources and energy-saving measures such as triple glazing – indicating a commercial incentive for developers.

More than a third (34%) of homebuyers also wanted to reduce their carbon footprint and get ahead of the curve, stating: ‘I think eventually all homes will need to be green so I will pre-empt this.

Buyers want more information about green homes

Despite a significant uptake, more than 1 in 3 (35%) respondents who were likely to purchase a green home said they wanted to understand more about how it would benefit them in the future, indicating a gap in knowledge and understanding.

Neil added: “Housebuilders should be doing more to emphasise the health and economic benefits of green homes in their marketing.

Not enough green homes in the Midlands

When it comes to availability, however, of those considering a green home, just 14% of respondents in the Midlands1 said there were green homes available in their desired location, compared to 25% and 24% in the North2 and South3, respectively.

The results also show that age, social class and gender are influencing factors in demands and expectations of green homes.

The age group most likely to consider a green home is 35 to 44-year-olds at 84%, followed by 25 to 34-year-olds (78%).

More than three quarters (76%) of 18 to 24-year olds would opt for a green home, in contrast to just 64% of respondents aged 45 and over.

It’s probably no surprise that the millennial generation is most likely to opt for a green home. This leans into the stereotype that younger generations are more concerned about the environment and also reflects the ageing first time buyer population. - Neil Gosling

Why aren’t people opting for green homes?

Six per cent of respondents said they were unlikely to choose a green home and 18% said they were neither likely nor unlikely.

Almost three quarters (72%) of those who were undecided said it was because they didn’t know enough about it, while 29% said they felt ‘indifferently’ about green homes.

When given a detailed description of what a green home is, 76% of people said they would be more likely to consider purchasing one for their next property.

Neil said: “Our results show that not all is lost when it comes to getting more people on board with green homes. I believe those on the fence can be convinced with the right information and education.

“As a sector, we should be leading with messages that hit both hearts and minds to turn the undecided few. But it’s also important we’re building homes with the features people value and in the locations they want.

“Adoption of green homes at scale is a complex jigsaw that will require canvassing of Government, legislative changes and greater financial incentives for both consumers and those delivering the product. More must be done to encourage larger players in the industry to get behind the cause, so that maximum efficiencies are achieved in the future. There is also need for a significant educational and engagement piece with the public and wider supply chain.

“For the short term, the focus should be on fabrication of housing to secure green homes status, but the potential for positive change on a much larger scale is huge, should the pieces fall into place.

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1. ‘Midlands’ refers to those in the West Midlands and East Midlands regions
2. 'North’ refers to those in the North East, North West and Yorkshire and the Humber regions
3. 'South’ refers to those in the East of England, South East, South West and Greater London regions

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We wanted to understand the opinions, knowledge and demands of those in the market to purchase a new home – having either recently purchased, or looking to purchase a property in the next 12 months.

We answer the following questions

  • What do buyers want?

  • Are there enough green homes in the midlands?

  • Why aren’t people opting for green homes?

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Shakespeare Martineau one of four to secure slot on housebuilder’s national legal panel

Blog | Residential Development

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After a lengthy tender process, leading law firm Shakespeare Martineau has been appointed to national developer Lovell Homes’ Core Legal Services Panel.

Led by partners Neil Gosling and Kevin Joynes, the residential development team successfully took on the highly-competitive tender process, securing one of four available slots on the three-year panel, sharing a legal spend of more than £3 million per annum.

The firm’s role will largely involve carrying out residential development work, including land acquisition, strategic land, legal planning and later living, as well as providing advice on property disputes and construction matters in England and Wales.

Head of residential development at Shakespeare Martineau Neil Gosling said: “To be one of the four firms chosen to form Lovell’s new legal panel is hugely exciting, especially as we were competing against a number of large, national firms.

“We’ve invested significantly in our people in recent years to ensure we have an incredibly strong group of talented lawyers across numerous disciplines who are all perfectly placed to provide the best advice at all times.

“The appointment adds to our already impressive list of existing residential development clients and will help us to achieve our growth ambitions. We very much see this as the start of a long-term relationship with Lovell, and we are looking forward to delivering outstanding service to the developer and becoming one of its key suppliers of legal services.

With more than 60 high-experienced and wholly specialist residential development experts nationally, Shakespeare Martineau supports housebuilders at all stages of their residential and mixed-use developments.

As a full-service law firm, the team also draws on the deep expertise of its colleagues to help clients with any related matter, including planning issues, construction warranties and building agreements, property disputes, and corporate and tax structuring.

Tonia Atkinson, Lovell’s head of legal, said: “We're pleased to welcome Shakespeare Martineau onto our panel as legal advisers. The fresh thinking shown by the team during the tender process really impressed us and we're excited to work with them moving forward.”

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The New Homes Quality Code

Blog | Residential Development

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There have long been calls for the implementation of a new scheme to provide increased levels of protection and rights to purchasers of new homes, to combat a minority of housebuilders where build quality and customer service falls on deaf ears.

Against this backdrop, the creation of the New Homes Quality Board (NHQB) by the Government is a welcome initiative.

New Homes Quality Board

The NHQB is an independent body whose purpose is to develop a new framework to oversee reforms in the build quality of new homes and the customer service provided by house builders.

The NHQB has now published the New Homes Quality Code (the Code) and put in place a New Homes Ombudsman (the Ombudsman Scheme).

In so doing, the NHQB’s aim is to improve standards in the context of the new build homes market across the UK and provide purchasers with a means of redress if they discover faults with their new build property which are not dealt with by the house builder responsible satisfactorily.

The code

The code was published on 17 December 2021 by the NHQB after a period of consultation lasting almost five years.

The code is split into two parts. The first part is a statement of the fundamental principles that registered developers agree to apply in their business and their dealings with purchasers. The second part is the practical steps i.e. what is expected at each stage of the sales process.

The fundamental principles are described as ’10 guiding principles’ which include fairness, transparency, quality and responsiveness (amongst others).

Applying the 10 guiding principles, the code:

  • protects vulnerable customers, prohibits high pressure selling and requires any deposit the purchaser pays to the house builder to be protected;

  • requires the house builder to provide all relevant information about the home during the sales process (including, for example, about the tenure and any future management or service charges), to allow the purchaser to make an informed decision;

  • sets out requirements for a fair reservation agreement, including a 'cooling off' period, and sales contract requirements;

  • allows the purchaser to have a "suitably qualified inspector" carry out a pre-completion inspection of their home on their behalf if they wish (against a standard form Pre-Completion Template);

  • specifies that a home must be 'complete' and ready to occupy, preventing housebuilders from paying purchasers to move into a new home early;

  • requires housebuilders to have an effective after-care service process in place to deal with any issues or 'snagging' problems purchasers raise; and

  • requires house builders to have a robust complaints process that responds to purchasers' concerns in a timely manner. Should a purchaser not be satisfied with how their complaint is dealt with, they will be able to refer their case to the new independent Ombudsman service (detailed below).

As a result, there are a number of changes that house builders will need to make in order to ensure compliance with the code. This will involve updating existing policies and procedures (such as sales information and reservation agreements), and ensuring that all staff members receive appropriate training on the changes. Housebuilders are expected to ensure that all customer facing staff have a good understanding of the requirements of the code.

Housebuilders will need to familiarise themselves with all aspects of the code. However, there are a number of provisions of particular note, including:

  • House builders aren’t obliged to register their entire business at once. Instead, a house builder can choose to register each regional office (or even development-specific subsidiaries) separately although it should be noted that the code does expect the entire business to be registered on or before the end of the transition period (i.e. 31 December 2022).

  • The code allows the purchaser (and/or a suitably qualified inspector) to visit the property before completion and from five calendar days after the Notice to Complete has been served.

  • A fundamental principle of the code is that house builders should take steps to identify and support vulnerable customers. The onus is on the house builder to take the lead on this, so consideration needs to be given on how best to approach this.

  • There are specific timeframes in which housebuilders must provide updates to purchasers following a complaint, including updates no later than day 10, 30 and 56 from receipt of the complaint.

During the transition period, once registered, housebuilders must inform customers as to whether they are covered by the new code or are covered by previous arrangements.

New Homes Ombudsman Scheme

The Ombudsman Scheme will provide purchasers with free access to timely, independent and efficient redress where issues occur with their new home. It is intended to be used where quality issues that the purchaser is not happy with arise, which are not dealt with to their satisfaction by the house builder. The Ombudsman Scheme will deal with claims with a value of up to £50,000. This will obviously cover lots of cases, except in respect of the most serious of issues.

The ombudsman is an independent body who will consider the evidence provided by the purchaser and the house builder and reach a decision.

The newly selected provider of the Ombudsman Scheme is working in conjunction with the NHQB to put in place the appropriate processes so that the service can be rolled out and made available to purchasers. It’s understood that, as matters stand, the intention is that the service will go live by June 2022.

What is the next step?

Although the code is voluntary, Homes England has made it compulsory for house builders and contractors to register if they are under the Help to Buy Scheme. It is also clear that the industry expects lenders/ warranty providers to follow suit in requiring their services to be dependent on registration. Given that the period for registration is now open, house builders should move now to not only register but ensure that they are able to effectively comply with the requirements of the code.

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All Change: The Building Safety Bill

Blog | Residential Development

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You’d probably have to have been living in a cave not to have heard something about what has often been referred to as ‘the biggest change in the construction industry in a generation’. Yes, we’re talking about the Building Safety Bill. We will affectionately just refer to it as ‘bill’.

What you might not know though is that the bill is currently in the final stages of passing into law, with the House of Lords having undertaken the second reading of it on 2 February 2022.

As a result, it is sensible for those in the construction and property industries to be getting to grips with the proposals set out by the bill and developing their understanding of how the bill will affect them.

What is the Building Safety Bill?

The bill is the Government’s response to what it saw as a lack of self-regulation across the construction industry, with the catalyst being the Grenfell tragedy in June 2017. In response to the Grenfell tragedy, the Government commissioned an independent review, the Hackitt Review (led by Dame Judith Hackitt), to investigate building regulations and fire safety in relation to high-rise residential buildings. The Building Safety Bill focuses on implementing the recommendations and principles of the Hackitt Review into law.

Principally, the bill is concerned with the safety of residents in residential buildings and it provides a stringent new regulatory regime that will apply during the design and construction of higher-risk buildings. The bill does this through the introduction of three ‘Gateways’ which will set out specific requirements that must be satisfied at various stages of a development. The three Gateways are: 1. ‘Planning’; 2. ‘Construction’ and 3. ‘Handover’.

Gateway 1, the Planning Gateway, is in fact already in force via amendments to existing planning legislation and requires a fire safety statement to be submitted to the Health and Safety Executive, as a statutory consultee, during the planning stage of a development.

When does the bill come into force?

It is anticipated that the bill will become law between April and July 2022. Thereafter, the implementation of the various provisions of the Bill will be staggered over the course of approximately 18 months.

Why should house builders care?

Admittedly, the focus of the bill centres around high-risk buildings - those which are 18 metres in height, or at least seven storeys and contain at least two residential units. However, the Bill is also set to implement wide reaching changes to the Building Act 1984, Architects Act 1997, the Regulatory Reform (Fire Safety) Order 2015 and the Building Regulations 2010,

To highlight just one proposed change which will be of major significance (assuming it gets passed into law) - the Bill proposes to make drastic changes to limitation periods, i.e. the timeframes in which building owners, homeowners and leaseholders are able to make claims for compensation following the completion of works that are found to be defective. The bill, via amendments to the Defective Premises Act 1972, currently proposes to increase statutory limitation periods for claims bought under section 1 of the Defective Premises Act 1972 as follows:

  • For work already complete, the limitation period will be extended retrospectively from six years to 30 years; and

  • For work in progress and completed in the future, the limitation period will be extended from six years to 15 years.

The bill’s proposed changes to limitation periods alone has significant consequences for the construction and property industries in that it leaves all parties open to a potential swathe of claims that would have previously been time barred. Such claims would inevitably be complicated - both factually and legally - and time consuming. As such, record keeping and the retention of documents will be critical.

It should, however, be noted that the bill remains subject to change before it is finally passed. Although, significant changes to the current proposals at this stage seems unlikely. Moving forwards, we will be keeping you updated on the changes set to be implemented and providing our take on the implications that those changes are having across the construction and property industries. Watch this space!

This short article is the first in a series that we have designed to help you navigate your way through the bill as it progresses through parliament and is finally passed into law.

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A sigh of relief for landlords and letting agents everywhere – as you were

Blog | Landlord and Tenant

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26 January 2022 saw the Court of Appeal hand down the judgment in the case of Northwood Solihull v Fearn & Ors (2022) EWCA Civ 40, which could have had a major impact on landlords and letting agents.

The Court of Appeal ruled that any authorised employee of a landlord or a letting agent can sign a Section 8 Notice or a prescribed information tenancy deposit certificate and did not have to comply with the requirements of Section 44 of the Companies Act 2006.

Background to the case

In 2019, Mr Fern and Ms Cooke (the tenants) were served a Section 8 Notice (the notice) after they fell in to rent arrears. The notice was signed by the property manager of Northwood Solihull, who was acting in the normal course of her duties as she was employed by the landlord.

The claim for possession was defended and the basis of their defence was that the notice was invalid. They argued that as the landlord was a corporate body and in order for them to rely on the notice it needed to be signed in accordance with Section 44 of the Companies Act 2006.

Section 44 of the Companies Act 2006, sets out that a limited company may execute a document either by affixing its common seal, or by a director of the company signing the document in the presence of a witness or by two authorised signatories.

The tenants  brought a counterclaim relating to the prescribed information certificates for the security deposit, which was only signed by one director of the landlord and without a witness signature, whereas in their view it needed to be signed by landlord.

At the possession hearing, the trial judge granted the landlord an order for possession. However, the judge did uphold the tenant’s counterclaim that the prescribed information did need to be executed in accordance with s.44.

The landlord’s positon was that even if the prescribed information did have a second signature on it, it did not have any impact on the tenant’s position.

The tenants appealed against the trial judge’s findings in relation to the notice and the appeal was dismissed. However, the landlord was granted permission to cross-appeal in relation the tenants counterclaim on the prescribed information.

The Court of Appeal’s decision

The Court of Appeal looked at the issue of the prescribed information certificate and the notice.

The certificate

The Court of Appeal agreed with the landlord’s position with regards to the signature of the certificate.

They held, “if an authorised and authenticated certificate, containing all the information is given to the tenant, I cannot see that any harm has been done”

The certificate was signed by the property manager who was authorised to do so on behalf of the landlord.

The Section 8 Notice

With regards to the notice, the Court of Appeal held “it was signed by an agent in the manner permitted by both the primary legislation and Regulations”.

The notice was signed by the director of Northwood Solihull, who was an agent of the landlord.

Furthermore, the Court of Appeal also considered the implications of non-compliance for both the certificate and notice and it was held that non-compliance would not invalidate the documents.

The Court of Appeal decision is a very welcome one for landlords and agents. Had the judgment not gone in the favour of the landlord, it would have had a detrimental impact on any notices served and prescribed information certificates, which would have been signed on behalf of the landlord.

The decision means that landlords and letting agents can continue in the way they have been doing so, provided that all the required information is provided to tenants on a notice and the prescribed information certificates.

Contact us

For information contact Habib Khan in our housing management team, who can guide, help support you and your teams to deal with any housing management and litigation issues you face during these evolving times.

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Habib is part of the social housing litigation team. He engages with all stakeholders to ensure landlords and property managers achieve their goals for their housing stock.

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UK new homes lowest in five years

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UK New Homes lowest in five years

The government’s own target of building 300,000 new homes per year is proving difficult to meet with the year to March 21 showing an 11% drop to just 216,490.  This is according to the government’s own Department for Levelling Up, Housing and Communities and is the lowest number of new homes being built since 2015-16. 

Many reasons have been sighted for this shortfall with the COVID pandemic playing a major part with sites closing down immediately in March 2020 – a restart did begin in May 2020 but three months had already been lost. 

Add to that the soaring cost of materials and overall availability and the fact that some developers are scaling back due to skyrocketing costs and reducing profits and the evidence is clear as to why this has happened. 

So how can house builders get back on track and ensure they are meeting the targets set by the government? 

Neil Gosling, head of residential development, comments, “There has been much talk and a promise of planning reform to bring additional sites forward for development in recent years.  This is crucial to the supply but we also need to see the time involved in securing planning and the commencement of actually breaking ground significantly reduced. 

Land values are significantly increasing due to developers having land shortages due to a lack of activity during lockdown.  This is causing developers to have to revaluate their profit margins, effectively reducing them, to secure sites for development. 

And while COVID impacted the development programme, a very real issue is likely to be a skills and materials shortage as developers catch up.” 

The need and desire for affordable new homes remains a top priority for the government.  The sector now has to catch up and deliver. 

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Neil builds long-standing working relationships with our clients by becoming an extension of their business. He is forward-thinking and progressive in his approach.

Our focus is on residential development. From inception to completion, we can support you at all stages of your residential and mixed-use developments.

Our reputation as one of the leading national residential development teams is supported by our enviable client list which includes 7 of the top 10 UK housebuilders, so you can be confident that you are working with a team of true specialists who can provide a full range of legal services.

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Property team help Godwin Developments secure prime commercial site in Staffordshire

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Godwin developments secure new site

Our associate Ben Darlow has worked with developer Godwin on another significant land purchase in Uttoxeter. 

Godwin Developments have secured a prime site in Uttoxeter which it intends to transform into a brand-new commercial development for the Staffordshire market town. Godwin Developments are an experienced national property developer with a focus on residential, commercial and mixed-use schemes, in partnership with the public and private sectors 

The Brookside Road site they have acquired is opposite Uttoxeter railway station which is used by over 165,000 people every year. With an estimated population of 20,000 also living within a three-mile radius and a high daily traffic count, the development will be well-placed to serve the local community, as well as commuters from the wider West Midlands region. 

The land - located near a brand-new 22,873 sq. ft. Lidl supermarket in Town Meadows Way that opened in October 2021 - is very well suited to a range of coffee, food-to-go and fast food operators and has the potential to create new jobs locally as well as deliver additional choice to residents, shoppers and passing traffic. Demand for takeaways and drive-thru restaurants has rapidly increased and was the fastest growing sector in the first half of 2021, providing convenience to consumers to access their favourite offerings. 

Nikesh Solanki, Development Manager at Godwin Developments, said: “We are thrilled to have secured this prominent site in Uttoxeter and we are looking forward to transforming it into a new commercial development.  

“Sitting opposite Uttoxeter railway station and near the A518 – which connects Uttoxeter to Telford, in Shropshire, via Stafford and Newport – the site benefits from a busy and highly visible location, providing the perfect spot for a commercial operator to reach not just local customers but also those from further afield.” 

Our property team provided legal advice on the deal. 

Ben Darlow said: “We’ve been working with the Godwin Development team for more than five years and have seen them grow their portfolio with great success during this time. Commercial space used for food and drink is definitely on the up and demand from consumers and operators is growing. We look forward to seeing the project come to fruition.” 

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Agriculture: diversifying or leasing your land to create habitat banks

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Teachers’ Pension Scheme – strategic issues independent schools need to think about

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Are you a farming business? Complete our free legal health check

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Legal support for agriculture businesses

We're delighted to announce that we are offering farming businesses a free legal health check to support the agricultural sector.

The interactive, online questionnaire, which should take users no longer than 20 minutes to complete, aims to identify and highlight any potential issues and legal gaps that may need addressing to safeguard a farming business’ future – providing certainty and security for forthcoming generations. 

This includes family arrangements – partnership issues, wills, family agreements and potential disputes – and diversification, supplier contracts, renewable energy schemes (for example solar), and business aspirations. 

Head of agriculture Peter Snodgrass, who advises his farming clients on a wide variety of matters from partnerships to agricultural tenancies, said: “A regular review of your business and family affairs is good practice as circumstances and business goals change over time. 

“We want to help you review your current arrangements and highlight any areas where further advice, support or action could be beneficial or required to ensure you meet your objectives and have peace of mind that all arrangements are up to date. 

“Completing the user-friendly questionnaire will help provide our team with the information they need to best identify any areas of concern. Once submitted, we will review your responses and call you to arrange a free consultation meeting with one of our agriculture specialists.” 

Last month, we expanded the size of our agricultural law team to meet growing demand for its specialist legal services, including the appointments of partner Amy Cowdell, legal director Jennie Wheildon and solicitor Kimberley Brookes – bringing with them more than 30 years’ combined experience. 

Peter said: “Agricultural law is a niche but highly sought-after and prestigious area of law. We are continuing to expand the team with the aim of building a centre of excellence in the country that is able to support farming businesses with all their legal requirements.” 

Complete the farming health check today

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Peter advises his farming and landowning clients on a wide variety of matters from partnerships to agricultural tenancies.

The legal requirements of the agricultural sector can be complex and you need a team who are real experts in agriculture law – lawyers that understand and have experience of the issues affecting you and your business.

Our agriculture law team supports and advises farmers, landowners, producers, landlords and tenants on all types of issues affecting this vibrant and challenging sector.

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Take a look at our new eco-friendly office transformation

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Our eco-friendly office transformation

 

Reclaimed pallet-clad walls and ceiling features, booth seating with sustainably sourced fabric, and tables made from recycled yoghurt pots are some of the eco-friendly features that can be found in our first revamped office hub in the heart of Stratford-upon-Avon. 

Our space – located in Bridgeway House, just off the A3400 and near the River Avon – is the first in our property portfolio to undergo a major makeover to reflect modern, new ways of working and to fall in line with the goals of COP26.

Earlier this month, we announced our pending B Corporation status and 30 ambitious responsible business pledges, including achieving net-zero by 2025 and becoming carbon negative by 2030. 

To support this, more than 80% of the materials used as part of the refurbishment were sustainably sourced, recycled, or reused – including wall cladding made from reclaimed pallets; tables created using Forest Stewardship Council wood; stools made from recycled cosmetic bottles; upcycled chairs, which have been sprayed and re-covered in sustainably sourced fabric; carbon-neutral flooring solutions; neon lights made from recycled acrylic; energy-efficient LED lightbulbs; and finishing touches, such as Beach Clean coasters created using EVA plastic saved from our oceans. 

We also ensured there was minimal impact on landfill by donating all items of furniture that were unable to be reused or upcycled to local charities, religious groups, schools and community groups. 

Karen Walker, chief transformation officer said: “We’re delighted with the finished look of our Stratford hub – it reflects our personality and aspirations, while demonstrating our investment in and commitment to our people, the town and Warwickshire.  

A collaboration hub

“The office was designed as a collaboration hub, creating a place where our people can come together to undertake tasks and activities better carried out in a face-to-face environment, while also supporting agile working with facilities such as a dedicated Zoom room, large planning surfaces, height-adjustable desks, spaces for confidential conversations, and areas to work away from the desk or hold informal conversations, team meetings or to socialise. 

“Our aim is to have a positive impact in all that we do and contribute to a better and brighter future for our people, communities and environment. Our commitment to achieving our responsible business pledges is part of that target, starting with the Stratford hub. 

“Over the coming 24 months, our wider portfolio of hubs will undergo refurbishments to become modern, eco-friendly spaces that promote collaboration between teams.” 

The transformation also supports our pending B Corporation status. B Corporation organisations are legally required to consider the impact of business decisions on their people, customers, suppliers, communities and the environment; ensuring a balance between purpose, people and profit. 

 

Flexible working is the future

Ben Buckton, our chief marketing and people officer said: “For us, achieving B Corporation status will simply be a by-product of the work we’ve already been doing to become a better and more responsible business for our people, clients and the planet. 

“We want all our people to work where, how and when they need to, to use their time and balance their life effectively. 

“In our latest firm-wide survey, 88% of our people want to continue with flexible working post-pandemic, so we have taken this as an opportunity to redesign the purpose of our hubs to better support networking, training, client meetings and other activities better done face-to-face. 

“We see lots of firms offering flexible working arrangements, yet they still bind their people to fixed rules and commitments. This doesn’t go far enough for us as it doesn’t match the reality of life or the new business world; we want our people to have a true work-life balance. 

“We also know that empowering people is the best motivation, and our positive, high-performance work culture is already attracting top talent and expertise from across the UK, which, in turn, delivers the best quality service for our clients.” 

Other responsible business pledges made by the firm include increasing female representation within the membership by five per cent (currently 33%) and racial diversity by two per cent (currently 8%), as well as supporting teams by training 100% of managers in wellbeing. 

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Working closely with the CEO, CFO, CTO and the Managing Directors of each business unit; Ben is a key driver of our growth strategy – ensuring we make the right investments to develop our people, brands, clients, markets and innovations that unlock potential.

Why Shakespeare Martineau?

On paper we’re a full-service law firm, providing legal services to businesses, organisations, government departments, families and people throughout life and in business. But we offer so much more than that. Expertise, commerciality and relationships are at the very heart of what we do.

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Agriculture: diversifying or leasing your land to create habitat banks

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Teachers’ Pension Scheme – strategic issues independent schools need to think about

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Demand for EV chargepoints means smart charging essential for construction industry

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Demand for EV chargepoints rises in the UK

As the UK continues to phase out petrol vehicles and encourage the mass uptake of electric vehicles, considerations have to be taken on new build homes and offices for EV charge point installers. Speaking in Parliament on 9 September, transport minister Rachel Maclean said the government will publish its response to a two-year-old consultation on mandating EV charge points later this year.

Expected to be included in the response is legislation requiring all new residential and non-residential buildings to have an EV charging station, news that will surely be welcomed by the hundreds of thousands of EV owners in the UK.

If passed, this legislation would make the UK the first country to mandate chargepoints in all new-build developments, and would be the latest in a string of indications that Westminster sees the future of personal transport as electric.

With the government recently confirming it will legislate to require all new-build homes and offices with parking spaces to have electric vehicle (EV) chargepoints, Shakespeare Martineau’s Neil Gosling, partner and head of residential development, and Isaac Murdy, trainee solicitor in the energy team, discuss the possible risks and available solutions.

As retrofitting charging stations is a lot more expensive than implementing the infrastructure during the construction stage of a new development (on average, £2,040 compared to £976 per space), it is positive to see the government looking to introduce legislation to combat one of the major barriers to drivers switching to electric.

However, while this would be a game changer in the shift to net zero transportation, the chargepoints pose huge potential challenges to the electricity distribution networks that will bring power to the points.

There are risks associated with multiple chargepoints being used at once, such as overloading their connections, and currently, the nominal load attributed to a development does not take EV charging stations into account.

With this in mind, it is vital the construction industry – whether developers or builders subcontracting the installation of a chargepoint – is aware of the potential hazards and the solutions currently available to avoid compromising its reputation.

The future of EV charging stations in the UK

The RAC estimates that, as of April 2021, there are around 239,000 zero-emission battery EVs on UK roads – with more than 100,000 registered in 2020 alone – along with 259,000 plug-in hybrids and 629,000 conventional hybrids.

With a plan to phase out petrol and diesel cars by 2030, the National Grid projects an EV stock of more than 11 million in Britain by that point and 30 million a decade later.

While this will help to meet decarbonisation commitments, new ways of thinking are needed to decrease the load demand created by EVs on an energy system that could face a 30% rise in peak electricity consumption in 10 years’ time.

Demand spikes for EV chargepoint installations

Chargepoints on all homes with a parking space would give the most utility to residents. However, it also places the greatest burden on the cables and wires distributing power to the estate – especially if EVs become as common as petrol and diesel vehicles, as they are projected to.

An analogy of why this would be a problem would be to compare the electricity to water. If we think about water pipes and all residents on a housing estate turn on their taps and flush their toilets at the same time, there will be a massive draw of water and either the taps will trickle or the pipes may even implode.

The same issue goes for electricity. Chargepoints can draw a lot of power from the grid and without control, there is the potential for huge spikes in demand, which could lead to brownouts (as insufficient electricity is shared around) or potentially the failure of distribution equipment that cannot handle the currents running through them.

Currently, many distribution network operators (DNOs) discount the possibility that everyone will be charging their cars while running the tumble dryer and boiling the kettle as too unlikely. This means that when calculating the additional reinforcement their networks will need when an estate is connecting in, they do not require any additional capacity to account for EV chargepoints.

This allows the network operator to give a more competitive price, but creates a problem for developers and drivers alike in the long run. We hope that as EVs become more ubiquitous, the real burden on the networks will be realised, and the Distribution Code that guides DNOs’ activities will be updated.

Smart charging shares data via the cloud

The solution is clear – smart charging and good communication with networks, and the government has acknowledged the importance of the former.

Smart charging refers to a system where an EV charging station can share its usage data via the cloud. This should help connect EV charging into the wider energy system, and could allow peak demand to be reduced, which would help prevent them becoming a burden on the power grid.

This is like the smart meter in your house being able to turn down the thermostat though, and will surely require commercial agreements to compensate people who will not get their vehicles charged as fast as they wanted.

We have started to see these put in place between high-profile housebuilders and installers to ensure the chargepoint will be controlled and what technology is needed to be put in place.

These early adopters are already showing how spikes can be smoothed by shutting down chargers when power is at a premium and turning them back on when demand is lessened. This can reduce the need for expensive reinforcement of the electricity network.

The solution is clear – smart charging and good communication with networks, and the government has acknowledged the importance of the former.

Smart charging refers to a system where an EV charging station can share its usage data via the cloud. This should help connect EV charging into the wider energy system, and could allow peak demand to be reduced, which would help prevent them becoming a burden on the power grid.

This is like the smart meter in your house being able to turn down the thermostat though, and will surely require commercial agreements to compensate people who will not get their vehicles charged as fast as they wanted.

We have started to see these put in place between high-profile housebuilders and installers to ensure the chargepoint will be controlled and what technology is needed to be put in place.

These early adopters are already showing how spikes can be smoothed by shutting down chargers when power is at a premium and turning them back on when demand is lessened. This can reduce the need for expensive reinforcement of the electricity network.

Looking ahead

To reach the UK’s ambitious target of becoming net zero by 2050, it is clear that renewables must become an integral part of housebuilding efforts.

And given that tens of millions of EVs could one day be on the UK’s roads as they replace petrol and diesel vehicles in a long-term strategy to decarbonise personal transport, domestic charging could soon become the norm.

To support this ambition, it is vital there is minimal impact on the grid and to deliver this, smart charging, delivered by commercial agreements, should be a priority.

To ensure they do not fall foul of the laws regulating electricity supply, generation and distribution, it is important developers take advice.

So, when specifying chargepoints to be installed on a new housing estate, taking a preventative approach by investing in the right technology and ensuring suitable agreements are in place will bear many benefits for residents and nearby locals, electricity suppliers and our planet in the long-term.

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Neil builds long standing working relationships with our clients by becoming an extension of their business. He is forward thinking and progressive in his approach.

As head of our residential development team, Neil has acted for the majority of the country’s top 10 national housebuilders as well as for significant institutional landowners, private builders and developers.

Construction Law

Our construction lawyers know what it is to be in your boots – some literally, after previous careers in building surveying – so we don’t sit on the fence. Our advice is direct, perceptive and commercial, adding efficiency to any stage of a construction project.

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Our Autumn Edition of Life Times is Out Now

We bring you the autumn edition of Life Times magazine - a round-up of insightful and informative content.

From looking at how to access the First Homes scheme, to resolving relationship disputes out of court, and Inheritance – A gift or a curse? The autumn issue is packed full of useful tips and information.

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What To Expect from Your Conveyancer When Buying A House

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Buying A House - Conveyancer Tips

The Seven Important Steps to Buying a House

Step 1: Instruct a conveyancer

Your conveyancer (solicitor) plays a very important part in your buying process. It can be a stressful and exciting time, but your solicitor will be able to answer all your questions and guide you through the process. 

Step 2: Confirm instructions to your conveyancer and pay search fees

Having instructed your conveyancer, you will need to provide full details and pay search fees.  Searches are the enquiries made to find out information about the property you are buying.  Searches will include: local authority, water and property and environmental.  It can take a couple of weeks for the searches to be completed. 

Step 3: Have your funding in place, i.e. your mortgage, if one is required 

Make sure you have your finances in place.  Eg have a mortgage offer in place, have investigated Help to Buy, First Homes or any other type of loan you may be using.  Having the finance in place and ready to go will speed up the whole process. 

Start to make enquiries if you are using a removals company and compare quotations. 

Step 4: Your conveyancer / solicitor will report all the findings back to you.

A good conveyancer will stay in constant communication with you, to report their findings once they have completed the necessary steps, such as; 

  • Received and reviewed your contract
  • Reviewed/completed the searches

Once you are happy with all the findings and any discrepancies/issues have been discussed you will be asked to sign your sales contracts and mortgage if applicable. 

Step 5: Agree a date for completion with your conveyancer

Once your documents have been signed and your deposit is paid to your solicitor / conveyancer, you will be asked to confirm a date for completion. Your completion date is essentially your moving day and this must be agreed on by all parties involved in the process.  

Step 6: Contracts can now be exchanged 

Once contracts are exchanged, it is vital that you understand that you are now committed to buying the property. Once contracts have been exchanged with your seller, the property is yours and if you fail to pay, the seller can take legal action and it can be a very costly situation.  

Please take time to run through your paperwork one more time before contracts are exchanged.   

Step 7: Completion Day!

The buying process is now complete and the property is yours.  This is the day you can officially take ownership of your keys and begin the process of moving into your new home. 

Congratulations! 

How long can it take to buy a house?

The buying process from instruction of a solicitor (conveyancer) to completion takes on average 8-12 weeks.  This can be dependent on your circumstances – ie if you are a first time buyer or if you have a property to sell, how long the buying chain is etc. 

How to choose a solicitor/conveyancer

Do your research, ask for recommendations, talk to your estate agent and find someone you trust.  Some estate agents may have an established relationship with a particular solicitor/conveyancer – but you are under no obligation to go with this firm. 

Get quotes and compare costs.  Compare conveyancing fees with a couple of companies to ensure you are paying a fair rate  

You can only instruct a conveyancer once you have agreed the sale of your home / purchase of your new home but do the research and make your decision so that this does not hold up the process.    

 

Residential Conveyancing

Our Residential Property team is a dedicated team of over 50 experts across all of our office locations in the UK.

They provide a specialist service to clients who are looking to sell or buy their own home or are looking to invest in residential properties and begin or expand their existing property portfolio.

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The Modern Method of Auction - A New Trend?

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Modern Method of Auction

Selling or buying a property in a traditional property auction can be a hair raising affair sometimes with nerves of steel involved. It is not for the faint hearted. But the auction arena is changing and another method of buying property and land is becoming increasingly popular - the Modern Method of Auction or the Conditional Auction and there are definite advantages for both the buyer and the seller.

How does a traditional property / land auction work?

Many different types of properties and land are bought and sold by a traditional auction method – often properties such as repossessed properties, uninhabitable properties, unmortgageable properties and land for development,

Under the traditional method the buyer is committed to the purchase and a completion date regardless of any potential issues they may then subsequently discover on the property. A 10% non refundable deposit is required and contracts are exchanged on the same day. Due to the immediate timescales buyers need to have their finances in place prior to attending the auction.

Completion must happen within 28 days.

How does the modern method of auction work?

Modern auctions take place on line.

With the modern method of auction the buyer pays a non-refundable reservation fee or reservation deposit within 48 hours of the auction ending which does not form part payment of the final selling price. The buyer is required to formally exchange and complete within 56 days of their solicitor receiving the draft contract from the seller’s solicitor. This is the reservation period.

After securing the property at the modern method of auction the buyer will need to carry out the usual searches, check the title and the information pack.

The auctioneer prepares the buyer’s information pack under the modern method of auction in the same way as they would have done under the traditional method.

The buyer’s information pack includes the title register and plan, property information questionnaire, water and drainage search and the local search.

The modern method of auction allows buyers time to check the property and to raise funds but the deposit will be lost if the sale does not proceed. It is definitely advisable to ensure the funding is in place and the title is checked prior to making the bid at the auction and entering into the reservation agreement.

The seller or buyer cannot terminate the reservation during the exclusivity period of 56 days which gives some buyers a grace period and limits the possibility of being gazumped. The reservation can be terminated at the discretion of the auctioneer.

The seller can also terminate if the buyer is in breach of its conditions.

The seller can reoffer the property for sale at the end of the reservation period should formal exchange and completion of contracts not have taken place.

What are the advantages and disadvantages of the modern auction?

There is more time for buyers - 56 days over 28 days in the traditional auction, giving some flexibility around raising finances, carry out searches etc.

Buyers are not committed to buying, although they will lose a hefty deposit, usually 10% of the purchase price, if the sale does not complete.

From a sellers perspective, this is probably not the route to take if attempting to sell difficult to sell properties or land, as the buyer is not committed to buy.

What are the advantages and disadvantages of a traditional auction?

Once the hammer is down, the 10% deposit paid and contracts exchanged, the buyer has entered into a legal commitment to buy and cannot pull out, which gives security to the seller.

For sellers, this is the best route to dispose of difficult to sell properties/land and often attracts cash buyers. This also means that sales are achieved much more quickly.

For buyers willing to take a calculated risk, there are good deals to be had.

The modern method of auction is one of the fastest-growing sectors in property, but there are distinct advantages and disadvantages and it remains to be seen whether this will trend will continue. As a buyer or a seller it’s important to investigate the detail of both options carefully.

For further information on using either of these routes to buying or selling, contact Caroline Irvine in our property team or Tom Ansell in the residential conveyancing team.

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Caroline advises clients on landlord and tenant work and supports companies when they are buying and selling properties.

Commercial Property Development

Even when working on the most complex of real estate projects, we propose commercially sound strategies that deliver results for our clients and address any issues that arise quickly. Our property development team takes a full-service approach to development work, advising on matters as diverse as financial structures, environmental law and property litigation so that all angles are covered.

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Teachers’ Pension Scheme – strategic issues independent schools need to think about

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On the brink of collapse: insolvencies in the construction industry

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Insolvency in the construction sector

The pandemic has placed the construction industry under considerable pressure, with it accounting for 17% of all UK corporate insolvencies in May 2021. Now that restrictions have lifted, it’s hoped that many companies will be able to survive moving forward. However, sector leaders should ensure they understand the insolvency process – whichever side they’re on.

The challenge ahead

Even before the pandemic, the construction industry was facing a number of challenges, including wafer thin profit margins and materials and labour shortages. This left many businesses in vulnerable positions, particularly in the wake of the May 2020 construction boom.

The complexity of construction supply chains often means that one problem can have widespread repercussions, so it’s important to be aware of warning signs that things may be going wrong

Understanding the signs

There are often distinct warning signs that indicate that a project is headed for trouble, these include:

  • Problems contacting subcontractors, employers or site teams
  • Unexpected changes in management
  • Subcontractors suddenly removing plant and equipment from the site
  • Unexplained reductions in productivity or resources

In the event these tell-tale signs appear, it’s time to take action.

Next steps

The first course of action should be to review your contracts and documentation, which will help you to understand the risk and who carries it. A plan can then be formulated.

If the financial position is worsening, it’s important to maintain lines of communication with key stakeholders, including the team ‘on the ground’. Staying close to site activity will provide a greater insight into any future problems.