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481 Pages·2013·3.48 MB·English
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i COMMERCIAL PROPERTY ii Commercial Dispute Resolution iii COMMERCIAL PROPERTY Editor Anne Rodell MA (Cantab), Solicitor Contributors Simon Halliwell, Clare Harris, Sue Highmore, Leona Mason, Stephanie McGuiness, Vanessa Ralph, Anne Rodell, Robert Tam and Matthew White iv Commercial Dispute Resolution Published by College of Law Publishing, Braboeuf Manor, Portsmouth Road, St Catherines, Guildford GU3 1HA © The College of Law 2013 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any way or by any means, including photocopying or recording, without the written permission of the copyright holder, application for which should be addressed to the publisher. Crown copyright material is licensed under the Open Government Licence v1.0. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. ISBN 978 1 909176 21 8 Typeset by Style Photosetting Ltd, Mayfield, East Sussex Printed in Great Britain by Polestar Wheatons, Exeter v Preface The aim of this book is to provide law students with a comprehensive introduction to the areas of property law particularly relevant to commercial property. Part I of the book deals with areas relevant to property acquisition and development. These include structures for joint ownership, arrangements for funding, contractual arrangements with the seller, the need for planning permission, environmental considerations, contractual arrangements with members of the construction team and taxation. Part II takes the reader through the grant of a commercial lease, the assignment of that lease and its termination. Part III deals with the law relating to property and insolvency. Although we hope that this book will provide a useful guide to trainee solicitors and others involved in commercial property work, it is primarily intended to complement the Stage 2 Advanced Property Law and Practice elective on the Legal Practice Course. This elective is only undertaken once the Stage 1 Property Law and Practice course has been completed. Apart from the matters specifically mentioned in Part I of this book, the conveyancing process for the transfer and leasing of commercial property is as described in the Legal Practice Guide entitled Property Law and Practice accompanying the Stage 1 course, so the conveyancing process is not dealt with in this book. The College of Law would like to thank the Practical Law Company for authorising the use of the following documents in this book: • Practice note on Overage Payments <http://uk.practicallaw.com/4-200-2514> (Chapter 3) • Lease of floor(s) of an office block with guarantee and prescribed clauses <http://uk.practicallaw.com/ 9-218-6006> (Appendix 4) • Diagrams on procurement <http://uk.practicallaw.com/9-329-1308> and linked documents (Chapter 9) The current team of authors would like to acknowledge the valuable contributions made by Paul Butt and Neil Duckworth to earlier editions of this book. The current team of authors bears responsibility for any failings in this edition. The law is as stated as at 1 September 2012. Anne Rodell The College of Law Guildford vi Commercial Dispute Resolution About the Contributors Simon Halliwell specialises in non-contentious construction and projects transactions. He trained at Linklaters LLP and qualified there as a solicitor in 2003, where he spent six years in the Real Estate department, before moving to leading US law firm, King & Spalding International LLP, and then Herbert Smith LLP. Simon has worked on complex and high-value transactions both domestically and internationally, acting for major developers, investment banks, blue-chip commercial organisations and governmental institutions. Clare Harris is a Senior Lecturer at the College of Law. She qualified as a solicitor in 1994, working as a commercial property lawyer for Edge Ellison (now Squire Sanders) and NatWest bank. In 2001 she moved to the College of Law where she currently teaches property law and advanced property law. Clare is co- author of Property Law in Practice. Sue Highmore is an editor with PLC Property. She specialised in commercial real estate at Linklaters for over 25 years and was appointed as its head of real estate knowhow and training in 2002. As Counsel there, Sue was responsible for development and delivery of a wide range of professional and skills training for real estate lawyers. She now writes for the Estates Gazette and Landlord & Tenant Review and lectures on topical issues. Leona Mason is a Senior Lecturer at the College of Law. She qualified as a solicitor in 1982 and was a partner in Underwood Solicitors LLP until 2004, specialising in property finance and secured lending. At the College, she teaches at the Moorgate Centre and has designed courses in Property Law & Practice and Finance & Capital Markets. Stephanie McGuiness has been a senior lecturer at the College of Law since 2006, having trained and practised at Herbert Smith. She teaches at the Moorgate Centre on both the LPC (Property Law and Practice) and GDL (Contract) programmes. Vanessa Ralph is a senior associate at Herbert Smith Freehills LLP. She has considerable experience in planning and major infrastructure development. She advises both promoters and objectors – and so has a thorough understanding of the issues relevant to both – on environmental impact assessment, consultation requirements, negotiations with third parties, inquiries and appeals, judicial review, compulsory purchase, compensation and enforcement. Anne Rodell is an Associate Professor at the College of Law. She qualified as a solicitor in 1989 and was an assistant solicitor in the Real Estate Department of Linklaters LLP until 1998. At the College, she currently designs courses in Property Law and Practice and Advanced Property. Robert Tam is a lawyer, lecturer, and international development consultant. Robert qualified in 2001 with Clifford Chance. He then spe cialised in environment law in Sydney and London, with Blake Dawson Waldron and Travers Smith. He also taught the GDL, LPC and LLM at the College of Law. Robert is now a project consultant with the Centre for International Legal Cooperation, and Carbon Leapfrog. Matthew White is a partner at Herbert Smith Freehills LLP and is recognised as one of the United Kingdom’s top planning solicitors. He works on large-scale commercial planning matters, with a focus on nationally significant energy and infrastructure projects and complex mixed use masterplan developments. Matthew has expertise in all elements of contentious and non-contentious planning, including environmental impact assessment, compulsory purchase, planning inquiries and judicial review. He has advised on many high-profile and politically sensitive projects in recent years. Contents vii Contents PREFACE v ABOUT THE CONTRIBUTORS vi TABLE OF CASES xiii TABLE OF STATUTES xix TABLE OF SECONDARY LEGISLATION xxiii LIST OF ABBREVIATIONS xxv Part I SITE ACQUISITIONS 1 Chapter 1 THE COMMERCIAL CONTEXT Anne Rodell 3 1.1 What is commercial property? 3 1.2 Who buys commercial property? 4 1.3 Buying commercial property jointly 5 1.4 Methods of structuring a property joint venture 6 Review activity 8 Chapter 2 OBTAINING PROPERTY FINANCE Leona Mason 9 2.1 Methods of finance 9 2.2 Debt finance 10 Review activity 14 Chapter 3 MATTERS OF CONTRACT Anne Rodell 17 3.1 The contract of sale 17 3.2 Different types of contract 18 3.3 Overage 23 Review activity 26 Chapter 4 PLANNING CONTROL Matthew White & Vanessa Ralph 27 4.1 The planning system 27 4.2 When is planning permission needed? 31 4.3 Planning permission 38 4.4 Application to the local planning authority 44 4.5 Appeals against adverse planning determinations 48 Review activity 52 Chapter 5 PLANNING OBLIGATIONS AND COMMUNITY INFRASTRUCTURE LEVY Matthew White & Vanessa Ralph 53 5.1 Introduction 53 5.2 Planning obligations 54 5.3 Government policy 55 5.4 Unilateral undertakings 56 5.5 Modification and discharge of planning obligations 56 5.6 Community Infrastructure Levy 57 5.7 CIL and planning obligations 61 5.8 Practical points 62 Review activity 63 Chapter 6 ENFORCEMENT OF PLANNING CONTROL Matthew White & Vanessa Ralph 65 6.1 Introduction 65 6.2 Definitions and time limits 65 6.3 Certificates of lawful use or development (ss191–192) 66 viii Commercial Property 6.4 Right of entry for enforcement purposes (ss196A–196C) 67 6.5 Planning contravention notice (ss171C–171D) 68 6.6 Breach of condition notice (s187A) 69 6.7 Enforcement notice (ss172–182) 70 6.8 Stop notice and temporary stop notice (ss183–187 and ss171E–171G) 73 6.9 Injunctions (s187B) 75 6.10 Appeals against enforcement notices (ss174–177) 75 Review activity 77 Chapter 7 ENVIRONMENTAL ISSUES Robert Tam 79 7.1 Introduction to environmental law 79 7.2 Environmental risk management 81 7.3 Contaminated land 83 7.4 Nuisance 91 7.5 Environmental Damage Regulations 93 7.6 Environmental permitting and regulation 94 7.7 Climate change law and energy performance 97 7.8 Regulatory Enforcement and Sanctions Act 2008 103 7.9 Asbestos 103 7.10 Japanese knotweed 105 7.11 Environment Tribunal 105 Review activity 105 Chapter 8 SEARCHES AND ENQUIRIES Anne Rodell 107 8.1 Local search and enquiries 107 8.2 Planning matters 107 8.3 Drainage 108 8.4 Highways 108 8.5 Contaminated land 108 8.6 Commons registration 108 8.7 Enquiries of the seller 108 8.8 Flood searches 109 8.9 Survey and inspection 109 8.10 Investigation of title 109 Review activity 110 Chapter 9 CONSTRUCTION PROJECTS Simon Halliwell 111 9.1 Introduction 111 9.2 Who will be involved? The design and construction team 111 9.3 Different forms of procurement 114 9.4 Duties owed to third parties 121 9.5 Protecting third parties 124 9.6 Dispute resolution 128 Review activity 129 Chapter 10 AN OUTLINE OF TAXATION OF COMMERCIAL PROPERTIES Anne Rodell 131 10.1 Value added tax 131 10.2 Stamp duty land tax on leases 137 Review activity 137 Part II COMMERCIAL LEASES 139 Chapter 11 LANDLORD AND TENANT LAW Stephanie McGuiness 141 11.1 Introduction 141 11.2 Lease/licence distinction 141 11.3 Security of tenure 142 11.4 Liability of the parties on the covenants in the lease 142 Review activity 143 Contents ix Chapter 12 AGREEMENTS FOR LEASE Stephanie McGuiness 145 12.1 Introduction 145 12.2 A typical agreement 145 Review activity 149 Chapter 13 LEASE CONTENTS Stephanie McGuiness 151 13.1 Introduction 151 13.2 The 2007 Code for Leasing Business Premises in England and Wales 151 13.3 Drafting leases 152 13.4 Prescribed clauses leases 153 13.5 The structure of the lease 154 Review activity 158 Chapter 14 THE PARTIES TO THE LEASE AND THEIR LIABILITIES Clare Harris 159 14.1 Introduction 159 14.2 The landlord 159 14.3 The tenant 161 14.4 The guarantor 164 Review activity 169 Chapter 15 THE PARCELS CLAUSE Anne Rodell 171 15.1 Purpose 171 15.2 Airspace and underground 171 15.3 Fixtures 171 15.4 Rights to be granted and reserved 172 Review activity 173 Chapter 16 TERM Anne Rodell 175 16.1 Introduction 175 16.2 Break clauses 176 16.3 Options to renew 177 16.4 Impact of SDLT 177 Review activity 177 Chapter 17 RENT Anne Rodell 179 17.1 Introduction 179 17.2 Amount 180 17.3 Time for payment 180 17.4 Other payments reserved as rent 180 17.5 Suspension of rent 180 17.6 Interest 180 17.7 VAT 181 Review activity 181 Chapter 18 THE REN T REVIEW CLAUSE Clare Harris 183 18.1 The need for review 183 18.2 Types of rent review clause 183 18.3 The dates for review 185 18.4 Working out the open market rent 186 18.5 The assumptions 187 18.6 The disregards 193 18.7 The mechanism for determining the rent 195 18.8 The late review 196 18.9 Recording the review 196 Review activity 197 Chapter 19 REPAIR Stephanie McGuiness 199 19.1 Introduction 199 19.2 Tenant’s covenant to repair 200

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