From June 2, 2010, the CPSEs have been made available as "Version 3" enquiries, to replace the various versions of the previous set of enquiries. All enquiries (CPSE.1, CPSE.2, CPSE.3, CPSE.4 and CPSE.5) are now in Version 3.0. You can click through to them by clicking on CPSE enquiries. However, it should be noted that no actual changes have been made to the content of the enquiries. The changes are merely stylistic. The enquiries are currently under review and are expected to be updated over the summer months. You can also click through to current drafts of the still-to-be-finalised CPSE CRC enquiries by clicking on draft CRC enquiries.

The June 2010 edition of the Commercial Property Information Update is published today on this website.

Next Tuesday's online SDLT Commercial Property seminar will be covering what transactions are notifiable, and what are not, what consideration is chargeable (and what is not), which transactions are exempt (and which may be subject to relief), how lease duty works – and what traps lie in wait, what happens with lease variations, surrenders, and re-grants, and how leaseback relief affects property transactions, how to defer payment of tax, how the tax affects options, pre-emptions, sub-sales…and many other problem areas. See http://propertypsl.webex.com/ for further details.

The new Government has been quick off the mark in suspending, with immediate effect, the requirement for a HIP in the home selling process. The requirement to have a HIP was suspended from midnight on 20 May. The obligation to make available a valid Energy Performance Certificate remains as a requirement. However, a seller need only have commissioned an EPC to be prepared before marketing a property rather than actually be in possession of one. Full abolition of HIPs requires repeal of Part 5 of the Housing Act 2004. The Government says that this is a priority for its new legislative programme.

Do agreements under section 106 TCPA 1990, which provide for the grant or transfer of an interest in land in favour of a third party, need to be signed by all of the parties, including the third party, in order to satisfy the contractual formalities of section 2 LP(MP)A 1989? Some time ago, the High Court had held this to be the case in Jelson Ltd v Derby City Council [2000] JPL 203. In that case, a section 106 agreement between a developer and the planning authority, which required the developer to transfer part of its site to a housing association to be nominated by the council for affordable housing purposes fell foul of section 2 of the 1989 Act because it had not been (indeed it could not have been) signed by the eventual nominated transferee. However, in Milebush Properties Ltd v Tameside Metropolitan Borough Council & Ors [2010] EWHC 1022 (Ch), the High Court has declined to follow the Jelson decision, stating that “it would substantially frustrate the statutory scheme contained in section 106 of the 1990 Act to interpret section 2 of the 1989 Act as invalidating section 106 agreements which benefit third parties [where the third party has not signed the agreement]”. In this present case, Arnold J is following a line taken similarly by Neuberger J (as he then was) in R. G. Kensington Management Co Ltd v Hutchinson IDH Ltd [2003] 2 P&CR 13. Neuberger’s view was that the wording of section 2(3) “require the contract, or the parts of the contract to be signed by 'each party to the contract', not by 'each party to the prospective conveyance or transfer'.”

The outcome of the latest BPF consultation on drafting issues for landlords and tenants (which concluded on 5 February) is still eagerly awaited. Latest reports are that those working on a report on the consultation process are intending to produce a report by mid-June. CRC has, of course, been in force since 1 April 2010, although the need to purchase CRC allowances does not arise until April 2011. It is not expected that the report will offer standard CRC clauses to be included in all appropriate commercial leases, as was the initial intention. Rather, it is anticipated that the working party will report on a range of divergent views expressed as to how CRC is to be dealt with, and will suggest a range of different options for dealing with CRC in the lease. A consensus approach to drafting is most unlikely to be achieved. It will therefore remain a key point for lawyers to address with with letting agents at or before heads of terms stage: how is CRC to be dealt with in relation to this building?

Including a clause in an express tenancy at will to enable the parties to terminate the tenancy on, say, seven days' notice would normally be regarded as fatal to the creation of such a tenancy. A recent Court of Appeal case (Katana v Catalyst Communities Housing Ltd [2010] EWCA Civ 370 - an application for leave to appeal heard before one Lord Justice) suggests that it is not. The tenancy in question ran for a fixed term of three months (which, naturally, was outside the 1954 Act because of section 43 of that Act), and then, if the tenant held over, the tenancy was terminable by the giving of not less than one week's notice by either party, regardless of the way in which the rent payable in respect of occupation was either calculated or paid. The tenancy arising at the expiry of the fixed term was, said the court, a tenancy at will. Since the court presumes such a tenancy where a tenant holds over after the expiry of an unprotected business tenancy, and such a tenancy is only displaced by an alternative contractual arrangement made between the parties, such as an express fixed term, or an express or implied periodic tenancy, neither of which were found to exist here, the tenancy continued at will, even though terminable on notice.

This does rather beg the question as to what the "at will" actually means in a tenancy at will. On the one hand, one has always been taught that termination at will means termination now; immediately; at the click of a finger; today. Then again, having the freedom to terminate on notice, but at any time (i.e. not constrained by the special requirements of a periodic notice to quit), still seems to be a form of termination at will. Safe practice is to avoid including such notice periods in express tenancies at will. But maybe the presence of such a clause does not prevent the creation/existence of such a tenancy. After all, what other species of tenancy would the arrangement be?

The May 2010 edition of the Commercial Property Information Update is published today on this website.

More than 14 years after the commencement of the Landlord and Tenant (Covenants) Act 1995, the iniquities of original tenant liability are still the subject of sustained attacks in the courts. Linpac Mouldings Ltd v Aviva Life [2010] EWCA Civ 395 is one such example - and hardly surprising too, given that the "original" liability of the tenant in this case (actually, a liability of an assignee under a direct covenant given at licence to assign) will endure until 2070 in relation to 99 year leases at rack rents. The rents exceed £500,000pa. It is little wonder the tenant took this case to the Court of Appeal in an attempt to allow Linpac to exercise a personal break right even though Linpac had assigned the leases to a third party. Perhaps not surprisingly, but also very painfully, the appeal failed. Full consideration is given in this month's CPI Update to be published at the end of this week.

Coping with Insolvency in the Landlord and Tenant Relationship.
Monday's online property and insolvency seminar will cover:
- A detailed analysis of how bankruptcy, liquidation, administration, receivership and voluntary arrangement impact upon property ownership and property transmission.
- The rescue culture in 2010 – its uses and abuses. How administration and CVAs work, and how they may be reformed.
- What restrictions on rights and remedies apply in the different insolvency procedures? Will the rent be paid?
- What issues concern a tenant where its landlord is facing liquidation or administration?
- How does disclaimer work – for landlords, for tenants, for sub-tenants and for guarantors?

If you wish to join, use the contact button above.

For online seminars, see http://propertypsl.webex.com/