Property UPDATE

Issue No.6 September 2006

Rent Reviews - Preserving the liability of former tenants to pay increased rents

Landlords - Do you have an outstanding rent review on premises where the original tenant has assigned the lease?

If so you should be aware that a recent case suggests that if the current tenant fails to pay the increased rent, a former tenant or guarantor will only be liable for the increased rent if a certain prescribed notice (a “Section 17 Notice”) has been served on them within 6 months of the rent review date, whether or not at that date the current tenant has defaulted on payment.

Your Notice should not claim any specific amount but, if worded properly, will serve to preserve your ability to claim the increased rent should the current tenant default in the future. A Notice will need to be served within 6 months of each rent payment day until the reviewed rent is agreed or determined. At that stage, if the rent is increased, then a further notice specifying the new amount will need to be served within three months.

The case in question is being appealed. We will let you know the outcome when it is decided. In the meantime, if you consider that service of such a notice could be appropriate for you, please contact us (please see the contact details below).

Listed Buildings and Conservation Areas

If you own a building that is listed or within a Conservation Area, be aware that local authorities are being encouraged by Government to be more active in taking prosecutions for unauthorised works. It is a criminal offence to carry out works without obtaining a listed building consent (LBC) where one is needed.

You will need an LBC for any demolition works to a listed building and for any works which affect the character of the building. This is not restricted to just the exterior of the building. It applies equally to the interior. It also applies to structures or objects (e.g. a garden wall) within the grounds of the building if constructed before 1 July 1948.

If the building is not itself listed but is within a Conservation Area then you need to get Conservation Area Consent (CAC) for (a) its complete demolition (b) minor alterations affecting the appearance of the building which may not normally need planning consent, such as inserting dormer windows or putting up a satellite dish which is visible from the street or (c) cutting or lopping any tree.

The local authority has power to make directions extending the types of works which require CAC, for instance altering the windows or doors or changing the colour of the exterior paint.

The controls apply both to residential and non-residential buildings. If you are thinking of buying (or renting) a building that is listed or within a Conservation Area should you be concerned about past breaches? You should. Whilst you cannot be criminally liable for breaches by a former owner, you can be required to remedy those breaches. This can be costly and may result in a property that is different from what you had thought you had bought. If the local authority chooses to serve an enforcement notice, this can make the property virtually unsaleable. Also, failure to comply with an enforcement notice is itself a criminal offence.

What should you do to avoid this situation? You should engage a surveyor or architect experienced in historic building conservation at an early stage to examine the building for possible unauthorised works and to advise you on the acceptability of any proposed works you plan to carry out.

We can help you find the right person to do this.

Home Information Packs – Update

To follow up on our article in our April 06 Newsletter (to view this again, see Issue 5) the government has now published detailed regulations about Home Information Packs. You are probably already aware that Home Condition Reports will no longer have to be included, although sellers will need to obtain an Energy Performance Certificate.

It will be compulsory to include certain documents (e.g. title information and some searches). Including other specified documents (such as a Home Condition Report or a Contents List) will be optional. However, it is positively prohibited to include other information as part of the pack (although it can be supplied separately, as long as you make it clear that it is not part of the pack).

There are also strict time limits for when some items such searches and title information need to be replaced. There are also time limits regulating whether, if you withdraw your property from the market but then decide to market it again, you will need to prepare a new HIP.

Some commentators feel that government enthusiasm for HIPs is waning. However, at present they are still set to come into force in 1 June 2007. CVS will be able to assist you to prepare a HIP. We can of course also assist in reviewing the HIP (which will now be, essentially, a “legal pack”) for any property that you may be considering buying. We will continue to keep you updated.

Note:

Please note that this newsletter is not intended to be a comprehensive statement of the law and should be used for guidance purposes only. If you require specific legal advice please contact Alastair McClean, Michael O’Shea or Sharon Rutter or by telephone 020 7493 2903.