Arbitration - PainSmith Solicitors Legal Update - April 2008

Many property professionals will be familiar with arbitration clauses. In the past
these used to be relatively popular but, with the advent of Tenancy Deposit
Protection and the end of the TDSRA scheme their usage has tended to fall away.
This is unfortunate, as when dealing with higher value claims a well crafted
arbitration clause can actually produce a quicker, cheaper and more effective form
of settlement for both sides.

Arbitration is governed under the Arbitration Act 1996 which was designed to set
out a quick, effective, but thorough form of arbitration to be used in the United
Kingdom. The Act has been so effective in so doing that its forms have been
adopted by other countries and it is the de facto standard for international
arbitration.

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Energy Efficiency & Energy Performance Certificates

Energy Efficiency

Energy efficiency improvements cost less than you think. Central heating, insulation, and double glazing can increase the long-term value of your properties and make them more attractive to renters. What’s more there are many grants available and they can reduce your income tax bills.

Here are some simple things you could do to improve the energy efficiency of your properties:

- Top up your loft insulation and insulate your walls. Your energy supplier is offering big discounts on prices for insulation right now – make the most of them!
- Update your heating system with a high-efficiency condensing boiler and effective heating controls
- Take advantage of significant discounts and buy a new, more energy efficient washing machine, fridge or freezer

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Competition Commissioner’s Report - Competitiveness in Retail?

In its provisional findings, published 31 October 2007, the Competition Commission’s interim report on competition within the grocery trade, concluded that there is a lack of competition in certain local markets which creates not only disadvantages to consumers in those areas but also allows retailers to weaken their offer to consumers nationally.

CgMs Consulting
P l a n n i n g & D e v e l o p m e n t , A r c h a e o l o g y & H i s t o r i c B u i l d i n g s

The planning system is seen to be contributory factor in restricting competition in the grocery trade by limiting the construction of new food stores on out of centre or edge of centre locations and by imposing costs and risks on smaller retailers and potential entrants.

The Competition Commission recommends (see appendix 1 to this report all of the suggested changes to the planning system) that the planning system might have to be changed so that there are greater opportunities for foodstore developments on the edge of town centres, while maintaining constraints on out-of-town developments.

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Is the deal closed? The use of the ‘Subject to

PainSmith Solicitors Legal Update - 30 October 2007

Many agents will be familiar with the phrase “Subject to Contract” or some similar formulation as a method of accidentally making a representation to the tenant
which was not intended. This way any offer made is subject to its incorporation in
the final lease agreement. However, there are some other consequences of the use of
this phrase which are not so favourable and it may not always be the best course of
action.

First it is worth examining precisely what the Courts understand the situation to be
when the “Subject to Contract” formula is used. The Courts construe the formula
in accordance with the conveyancers understanding of the phrase. This is that a
negotiation for a conveyance of land which is expressed to be ‘subject to contract’
is not complete until there is an exchange of contracts.

There is an entire set of procedures for such exchange which are set out and agreed between solicitors. It is this position that allows for such situations as ‘gazumping’ where the seller suddenly pulls out of a deal because they have had a higher offer. In the case of Salomon v Akiens, the Court of Appeal had to consider whether this formulation should also be applied to a lease agreement.

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Section 13 Notices

PainSmith Solicitors Legal Update - 30 October 2007

Most agents and landlords will be familiar with the need to serve a section 13 Notice to increase the rent in periodic Assured and Assured Shorthold tenancies. However, they may not be aware that it is perfectly possible to get round the provisions of s13 with a little forward planning. A recent Court of Appeal case has highlighted this point.

It is important to understand the purpose of the Section 13 procedure. It is intended to allow landlords to have a means of increasing rent during periodic tenancies. It was envisaged that this would be important as the Housing Act 1988 specifically allows for periodic tenancies to occur and continue for substantial time periods.

However, the process is specifically subject to certain controls to prevent landlords getting rid of tenants by massively increasing the rent. This control process is the right for the tenant to refer the rent proposed by the section 13 notice to a Rent Assessment Committee for them to determine whether that rent is a fair market rent for the property.

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New Consultations

PainSmith Solicitors Legal Update - 24 August 2007

There are two key consultations which Landlords and the Agents may wish to respond to at the moment.

The first of these is by the Law Commission which is considering how to reduce problems relating to poor housing quality and harassment of tenants. Their current view is that all landlords should either be licensed or forced to use an approved Letting Agent.

All Agents are strongly advised to make their views known on this controversial topic. More information can be found at the Law Commission website on www.lawcom.gov.uk/housing_renting.htm

The DCLG has also published a consultation that will be of interest to Agents who deal with block management issues. This relates to planned changes to the Commonhold and Leasehold Reform Act and specifically to the rules on provision of statements of account to leaseholders and on the keeping of payments in designated client accounts.

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