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

In June 2009, the British Property Federation launched a guide to the forthcoming Carbon Reduction Commitment - see Carbon Reduction Commitment - BPF Guide. After due consideration, the BPF has today published a CRC industry-wide consultation paper, the primary purpose of which is to explore whether a cross-industry consensus can be reached on how the costs of the Carbon Reduction Commitment (or, to give it its full name, the Carbon Reduction Commitment Energy Efficiency Scheme) should be apportioned between landlords and tenants in new leases. The underlying (or indeed overriding) aim of the consultation is to try to arrive at standard lease clauses to deal with CRC, to avoid property lawyers and others involved in the industry from having to wade through pages of firms' own preferred CRC draft clauses.

This month’s CPI Update, to be published on December 31, will contain a full review of how CRC will affect commercial property matters when the scheme comes into operation in April 2010, will comprehensively digest the important issues raised in the consultation paper, and will explore the drafting issues involved. However, for those with a requirement for some light Christmas reading in the meantime, the consultation paper, together with the original BPF Guide, can be downloaded by clicking on CRC Industry Consultation and following the link to the relevant PDF documents. The consultation period concludes on February 5, 2010.

The Land Registry is discontinuing the electronic notification of discharge (END) from January 3, 2010. The Land Registry believes that affected lenders will switch to the electronic discharge of mortgages through form e-DS1. This form is processed automatically by the Land Registry and provides for instantaneous completion of the discharge application.

Click on ENDs announcement to read the Land Registry's announcement.

A new set of mortgage instructions for residential property comes into force on January 1, 2010. The Building Societies Association is introducing the BSA’s Mortgage Instructions to provide, so it says, a full set of conveyancing instructions for conveyancers acting on behalf of BSA Members and their subsidiaries in residential conveyancing transactions. These instructions, which will be made available on the BSA website (www.bsa.org.uk) do not fully replace the CML Handbook. Use of the instructions is voluntary for BSA members. The Law Society understands that approximately 25 building societies initially intend to use the new instructions. BSA members who are also members of the Council of Mortgage Lenders may choose to continue to use the CML Handbook. The BSA says that it “has been mindful of the need not to introduce new requirements that may result in confusion, and excessive or unnecessary changes to building societies’ or their conveyancer’s practical arrangements.”

To read more, click on BSA Mortgage Instructions - FAQs.

The Court of Appeal has upheld an appeal in the case of Clarence House Ltd v National Westminster Bank plc. This was the case in which the tenant had entered into a "virtual assignment" of its lease whereby all of the economic benefits and burdens of the lease had been transferred to a third party, without any actual assignment or change in the occupancy of the premises. The High Court had determined that the outsourcing agreement was an unlawful parting with possession of the property, as the virtual assignee had been assigned the right to deal with the property as if the tenant. However, in a comprehensive analysis of what amounts to “possession” at law, and what therefore amounts to a parting with possession, the Court of Appeal has overturned the decision of the lower court and saved many an outsourcing arrangement. Full analysis of this case will appear in the CPI Update.

The December 2009 edition of the Commercial Property Information Update is published today on this website.

Patrick Cannon's website includes an item explaining that a legislative error may put HMRC on the back foot when pursuing a taxpayer for penalties in relation to an incorrectly filed SDLT return. The item is too technical for simplification here, and needs to be read in full, and it will be of interest to property tax lawyers in cases where the amount of the penalty to be raised against a client could be significant. Patrick Cannon's own introductory simplification is that: “A drafting error may mean that penalties for incorrect SDLT returns cannot currently be charged and will only apply to returns due from April next year.” Click on the article - April Fools.

As suggested in yesterday’s news item (Land Registry - Flood Risk Indicator) the Land Registry’s new Flood Risk Indicator may be of use in simple house purchases, or for the casually interested enquirer, but for commercial transactions it does not seem to be the appropriate tool. Commercial flood search providers Argyll Environmental Ltd, who provide the FloodSolutions products, point out the Land Registry’s terms and conditions for the Flood Risk Indicator state that the service is created “principally for the purpose of providing information and services for the personal use of the private citizen.” It is therefore clearly aimed at residential property and is not suitable for commercial acquisitions. In any event, there is a wide-ranging exclusion of responsibility in the terms and conditions which will discourage reliance solely upon this indicator. Furthermore, Argyll points out that the information used by the Land Registry’s indicator is limited to Environment Agency data only and therefore excludes, for example, risk of flooding from other sources, such as groundwater or surface water which, according to Argyll, accounts for around 50% of flooding annually.

The Land Registry has launched a new service on its website - a flood risk indicator. In its website announcement, the Land Registry says it has combined its own data with the Environment Agency's flood data to produce its new Flood Risk Indicator. The Land Registry's new service might be regarded as useful and effective for simple home purchases, but other services are available, such as the FloodSolutions products provided by Argyll Environmental. The Land Registry itself states that customers who require additional flood information are advised to contact the Environment Agency.

The Perpetuities and Accumulations Act 2009 ("An Act to amend the law relating to the avoidance of future interests on grounds of remoteness and the law relating to accumulations of income") received Royal Assent on 12 November. There is currently no date scheduled for commencement of the Act. As mentioned last week (click on: The rule against perpetuities) the changes will have a minimal impact on commercial property, but due consideration will be given in these pages when commencement is imminent.