Conveyancing Question Time with Richard Snape

ARTICLE

Conveyancing Question Time with Richard Snape

LawSure Insurance, the award-winning title insurance specialist broker, and sponsor of the Surrey Law Society, regularly runs conferences with Richard Snape, the leading legal presenter and trainer.

Here Richard provides answers to questions he is frequently asked during the conferences.

Q. What is the problem with positive covenants in freehold land?

A. Unlike restrictive covenants, which are recognised as property rights and, post-1926 subject to registration, combined third party purchasers, the case of Austerberry v Oldham Corporation (1882) stated that positive covenants in freehold land, such as maintenance, are not property rights but merely contractual rights. To bind third party purchasers there should be devices such as direct covenants and restrictions or estate rentcharges, with all the problems that they cause. In leasehold land both positive and negative covenants can bind third parties, which is why the vast majority of flats, where maintenance is essential, are leasehold.

Q. What must be included in a fire safety risk assessment under the Fire Safety Act 2021?

A. The Fire Safety Act 2021 came into force in Wales on 1 October 2021 and in England on 16 May 2022. It applies whenever a building includes two or more sets of domestic premises and states that the risk assessment must include the structure, external walls, common parts, doors between domestic premises and common parts and external walls, doors, windows and attachments, for example, balconies.

It is suggested that a large number of fire safety risk assessments are now out of date.

Q. In registered land can an easement bind a purchaser if it does not appear on title?

A. Prior to 13 October 2003 legal easements created by deed would be overriding interests and binding on purchasers. This is still the case for easements created prior to 13 October 2003 but since that day they are not legal and not binding until an application for registration is made.

However, prescriptive easements and easements implied into a transfer will be overriding if the purchaser has actual knowledge of them, or they are obvious from an inspection, or the easement has been exercised in the previous year.

Q. When will a lease bind a purchaser for value of the landlord’s reversion when the landlord’s title is registered?

A. A lease, or term of years absolute, is one of the two recognised legal estates (under S.1 (1) Law of Property Act 1925). To be legal, the lease must be created by deed and, if for more than seven years in duration, must be substantively registered. The major exception for this is leases of three or less years in duration taking effect in possession at the best rent reasonably obtainable. Such a lease would be legal if purely verbal or implied from periodic payment of rent. Short legal leases of seven or less years in duration will be binding on a third-party purchaser for value as they will be overriding interests.

If a lease of more than seven years in duration has not been substantively registered or a lease of more than three years in duration has not been created by deed, then it will be treated as a contract to create a legal lease if it satisfies the formalities in S.2 Law of Property (Miscellaneous Provisions) Act 1989. Such a lease will be an equitable lease and overriding under Schedule 3 (Paragraph 2) Land Registration Act 2002 provided that the tenant is in actual occupation. If so, the lease will be binding on third party purchasers.

Q. What is the enforcement period for Building Regulation breaches?

A. The enforcement period against the building owner is 12 months from the date of completion of the work. There may be a prosecution for up to two years after completion of the work, but only against the owner who commissioned the work or more likely the building or main contractor. Local authorities have numerous other powers in relation to dangerous buildings. There is also provision in the Building Safety Bill 2021-2022 to increase enforcement periods from twelve months to ten years.

Q. Can a landlord use ground (f) and intend to demolish and reconstruct, but plan the works in order to oppose a new lease?

A. The intention must be held at the date of any court hearing. After much debate, the matter was finally decided by the Supreme Court in the case of S Frances v Cavendish Hotel (2018). Here, amongst other things, the landlord intended to demolish a wall and replace it with an identical wall. The Supreme Court held that there is a “but for” test in that the landlord has to show that they would do the work even if the tenant had vacated. The landlord failed in opposing a new lease.

Q. Can a landlord oppose a new lease on ground (g) and occupy for their own purposes but later sell as a property?

A. The Landlord must have a genuine intention to occupy at the time of any court hearing. According to the Court of Appeal case of Patel v Keles (2009) the landlord may sell at a later date, but as in the present case they intended to continue use as a newsagents for two years and then redevelop the premises together with neighbouring land they could not use ground (g). In addition, under S.55 of the Act if there is deliberate concealment then the tenant has a misrepresentation claim.

Q. Can the landlord change the terms of the tenancy agreement on a 1954 Act renewal?

A. S.35 of the Act states that in the absence of agreement between the parties the court shall have regard to the terms of the current tenancy. In the House of Lords case of O’May v City of London Real Property Company (1983) stated that the burden is on the person proposing a change and it is a strong burden. It must be fair and reasonable between the parties and the fact that the rent is to be reduced is not a decisive factor. Thus, the landlord was unable to change the repairing covenant in return for a reduced rent.

Q. If a lease is to be excluded from the LTA 1954 what date should be entered in the warning notice?

A. This is an obvious error in the warning notices and has been debated since 2004. It was finally settled by the Court of Appeal in the case of TFS Stores v Designer Retail Outlet (2021) where the term “the date on which the tenancy is granted” was held to be sufficient. An actual date need not be included.

For your free no-obligation title insurance quote from the award-winning specialist legal indemnity broker for title insurance, call us today on 0345 557 0845 or email us at enquiries@lawsure.co.uk. ■