Property Dispute New Starter Guide

An introduction to Property Disputes (PD) is given in this updated beginner guide.

A broad range of challenging commercial and residential real estate matters are advised on by PD lawyers, including:

  • Guidance on risk management before acquisition or development, especially concerning rights of light and other easements or covenants, and organising extensive vacant possession plans with regard to current tenants.
  • Conflicts between landlords and tenants, ending commercial and residential leases, enfranchisement and lease extension claims in the home, property bankruptcy concerns, neighbour disputes, and adverse possession.
  • Getting ready for and carrying out court or tribunal cases, such as:
  • Renewals of company leases.
  • Claims of residential possession.
  • Problems with the Electronic Communication Code agreement or termination.
  • Evicting trespassers.

 

Both individuals and corporations may be involved in the issue. If the dispute cannot be resolved through negotiation or another form of dispute resolution, a property dispute lawyer will represent their client(s) in seeking to resolve the dispute and will be expected to advise their client(s) as to whether they have a valid claim (if they are the potential claimant) or defence (if they are the potential defendant) in any possible proceedings.

It can be necessary for a PD attorney to appear in court on behalf of their client or to give instructions to a barrister to do so.

Important subjects for property disputes

A PD attorney must possess a thorough comprehension of the fundamental elements of the disagreement. The PD module includes precedents and guidelines about the main property dispute issues that lawyers may face regularly, such as:

  • Security of tenure, including how it develops and ends, for both residential and commercial tenancies.
  • Executing break terms, which includes making sure notices are properly served and meeting any requirements before exercising the break, such as paying the rent or abiding by other lease covenants.
  • Forfeiture, a clause in most leases that allows a landlord to end a rental agreement when a tenant violates the terms of the agreement, like failing to pay rent.
  • Obtaining an order from the Upper Tribunal (Lands Chamber) (UT) compelling a landowner to grant operator rights to install and operate electronic communications apparatus on their land and providing advice on how to terminate those rights are examples of electronic communications under the Electronic Communications Code (the Code).
  • Light rights, other easements, and covenants: their emergence and termination.
  • Both explicit and implicit repair duties between the landlord and tenant, as well as claims for such commitments’ violations resulting in deterioration.
  • remedies for disagreements arising under contracts, such as ending the contract and/or suing for damages for violating its conditions.

Nature of occupation

Determining the nature of a party’s occupation – lessee, tenant at will, licensee, or trespasser – is the first step in resolving many PD disputes since it will define the scope of that party’s rights, whether under any occupying agreements or other legislative protections.

Tenancies/Lease agreements

Apart from the contractual right to occupy as stipulated in the lease agreement, tenants in residential or commercial tenancies may also be granted several statutory rights. These rights may include:

  • “Security of tenure,” such as through the Housing Act 1988 (HA 1988) for assured tenancies (AT) and assured shorthold tenancies (AST) of residential properties in England, and through Part II of the Landlord and Tenant Act 1954 (LTA 1954) for business tenancies (see: Business tenancies).
  • Reimbursement for enhancements in accordance with the Landlord and Tenant Act of 1927 (LTA 1927).
  • Residential leases, security against eviction, control over expenses like service fees (see: Rent and service fees), and the option to renew the lease or purchase the freehold.

A lease is often awarded by deed, and any land lease that lasts more than three years needs to be granted by deed. However, there are situations where a contractual arrangement or an oral agreement may be used for leases shorter than three years. Leases might have a set duration or be renewable.

Fixed-term tenancy

It is possible for the landlord and renter to decide on a fixed-term lease. As per Section 54 of the Law of Property Act 1925 (LPA 1925), a lease to last more than three years must be created in writing and signed by the parties involved. In addition, for it to be legally enforceable, it must be established by deed (LPA 1925, s. 52(1)).

Periodic tenancy

A tenancy created by statute, express agreement, or inference is known as a periodic tenancy. The term of the tenancy, unless otherwise specified, is often the time frame during which rent is reserved, not the time frame for when it is due. For instance, if the parties concur (or concurred under a prior fixed-term lease):

  • Rather than a monthly tenancy, an annual tenancy will probably occur with an annual rent of £30,000 payable monthly.
  • There will be a quarterly or monthly rent payment and a quarterly or monthly tenancy, depending.

Until terminated by a notice to vacate, which must be given at least six months’ notice in the event of an annual tenancy, or at least equivalent to the remaining term in other circumstances, and concluding at the end of the time, a periodic tenancy will remain in effect. The statutory procedure for termination must also be followed if the periodic tenancy has statutory security of tenure. For instance, if the periodic tenancy is used for business reasons, it will automatically be protected by LTA 1954.

Tenancy at will

A tenancy at will is created when someone is permitted to enter or stay in exclusive possession of the property for an extended time with the understanding that either side may terminate the agreement at any time, either explicitly or implicitly.

For tenancies at will, LTA 1954 does not apply. Therefore, between the contractual expiration of a business tenancy that was bargained out of the LTA 1954 security of tenure provisions and the negotiation and conclusion of a new lease, tenancies at will are occasionally employed.

Using a tenancy at will is not risk-free, though; this depends on the specifics of each instance. If the remainder of the agreement contains provisions incompatible with a tenancy at will, the term “tenant at will” alone will not establish a tenancy at will. Inconsistent terms include those that need forfeiture clauses, periodic rent payments, and break notice provisions. The case law is quite erratic and heavily reliant on the particular facts of each case for determining whether an agreement establishes a periodic tenancy or a tenancy at will.

It used to be easy to assume that once rent was paid, the tenancy turned into a periodic one. The emphasis of recent case law is that the parties’ intentions play a role in this. It may be assumed that the tenant occupies the space as a tenancy at will in situations where, for instance, the parties are actively negotiating the terms of a new lease and that the goal is not for a formal landlord and tenant relationship (i.e., periodic tenancy) to develop in the interim before the new lease is granted. Even though the agreement is called a tenancy at will, if it is viewed as a periodic tenancy and pertains to properties used, it will automatically be protected under LTA 1954.

Licences

Licensees, in general, are not as protected as tenants. The laws HA 1988 (ATs and ASTs) and LTA 1954 (commercial tenancies) solely pertain to tenancies – not licencing. Therefore, a licence gives the owner of commercial property a method to permit possession on an “easy in, easy out” basis without adhering to intricate legal requirements. Additionally, licences are occasionally used to grant early access to a property to a prospective renter before the finalisation of a tenancy.

Nonetheless, the substance of the arrangement – rather than the parties’ label – will be considered by the court when determining whether an agreement qualifies as a lease or a licence. The House of Lords determined the characteristics of a tenancy in Street v. Mountford to be:

  • Exclusive possession.
  • Of defined premises.
  • For a term (fixed or periodic).
  • At a rent (although later case law has demonstrated that, although rent can be a sign of a tenancy, it is not necessary for one to exist).

Consequently, even though a licence agreement may be labelled as such, care should always be taken when seeking to employ one because the court may determine that it is a tenancy rather than a licence. The occupier may then be entitled to significant statutory rights and protections.

Business tenancies

Licensees, in general, are not as protected as tenants. The laws HA 1988 (ATs and ASTs) and LTA 1954 (commercial tenancies) solely pertain to tenancies – not licencing. Therefore, a licence gives the owner of commercial property a method to permit possession on an “easy in, easy out” basis without adhering to intricate legal requirements. Additionally, licences are occasionally used to grant early access to a property to a prospective renter before the finalisation of a tenancy.

Nonetheless, the substance of the arrangement – rather than the parties’ label – will be considered by the court when determining whether an agreement qualifies as a lease or a licence. The House of Lords determined the characteristics of a tenancy in Street v. Mountford to be:

  • Exclusive possession.
  • Of defined premises.
  • For a term (fixed or periodic).
  • At a rent (although later case law has demonstrated that, although rent can be a sign of a tenancy, it is not necessary for one to exist).

Consequently, even though a licence agreement may be labelled as such, care should always be taken when seeking to employ one because the court may determine that it is a tenancy rather than a licence. The occupier may then be entitled to significant statutory rights and protections.

Lease agreement signed outside of LTA 1954

Before granting of a fixed-term lease, the parties may agree to contract out of (or omit) the pertinent sections 24–28 of the LTA 1954. Section 38 of the Land Tenancy Act 1954 features stringent anti-avoidance clauses, stating that any agreement pertaining to a tenancy to which the Act applies that aims to prohibit the tenant from claiming security of tenure or penalises the tenant for doing so will be void, regardless of whether it is included in the tenancy agreement or not.

The only exception is Section 38A of the Landlord and Tenant Act of 1954, which states that the parties may agree to eliminate the security of tenure. The parties shall adhere to the process outlined in LTA 1954, s. 38A (3), for this agreement to be enforceable. Contracting out a periodic lease is not feasible.

The contracting out process must be performed precisely, though, as one mistake might render it void and provide security of tenure for the lease. For instance, caution must be used to guarantee that the right tenant receives the landlord’s notice, that it is given to them using the appropriate means, and that the tenant subsequently provides a declaration in the appropriate format and with accurate information regarding the proposed lease. The granted lease must thereafter bear the endorsement of the landlord’s notification, the tenant’s declaration, and the agreement to contract out of LTA 1954.

Upon the expiration of the lease, the landlord has the right to retake possession of the property and replace the locks because the statutory security of tenure will not cover a lease contracted outside of LTA 1954. But starting the legal process for a possession order could be better. The Civil Procedure Rules (CPR) Part 55 and the Practice Directions that go with it control these court proceedings.

Residential tenancies

Residential tenancies will terminate with the expiration of the fixed or periodic term instead of continuing under a statutory continuation tenancy unless they fall under one of many various statutory regimes offering security of tenure.

Remember that under the Renting Homes (Wales) Act 2016 (RH(W)A 2016), several tenancies, such as ATs, ASTs, and licences for residential properties, will be abolished on December 1, 2022, and replaced with occupation contracts (with some exceptions). Existing licences and tenancies will convert to employment agreements.

Rent Act 1977 tenancies

Most leases awarded before January 15, 1989, fall under the category of “regulated tenancies” or “fair rent tenancies,” and they are controlled by the Rent Act 1977 (RA 1977) (also known as Rent Act tenancies).

Compared to other private tenants, regulated tenants are better protected from eviction. When a reasonable rent is paid, a regulated tenant is granted the legal right to occupy a property with complete security of tenure.

A tenancy will be referred to as a “protected tenancy” for the agreed-upon term. After the predetermined term has passed, it will become a “statutory tenancy.”

A court order is required for the landlord to take possession of a statutory tenancy. The requirements and optional justifications for possession are outlined in RA 1977, Schedules 15 and 16.

It should be noted that tenancies protected or statutory under RA 1977 are specifically exempt from the terms of RH(W)A 2016, meaning that they will remain in place and not be changed to contracts for occupation.

Assured and assured shorthold tenancies

The RA 1977 regime, which effectively provided security of tenure for life and succession rights, except for the landlord’s right to obtain possession under certain circumstances, was superseded by the Housing Act 1988 (HA 1988) for residential tenants. However, a sizable number of Rent Act tenancies remain in place.

Tenancies granted on or after January 15, 1989, and before February 28, 1997, were therefore likely to be automatically granted assured tenancies (ATs) under HA 1988 (unless the tenancy was a renewal of an existing Rent Act tenancy), provided that the tenant (or, in the case of joint tenants, at least one of them) met the relevant requirements, which include being an individual, occupying the dwelling house as their primary or only residence, and not falling under any of the exceptions.

The following are examples of the exclusions:

  • High-value residences (annual rent of £100,000 or more in England).
  • Low-rent tenancies (annual rent of £250 or less, or £1000 or less in Greater London).
  • Rent-free tenants; business tenancies.
  • Rentals from public agencies and local authorities (LAs).

Tenancies granted on or after February 28, 1997, are likely to automatically be assured shorthold tenancies (ASTs) as a result of amendments to the Housing Act 1988 made possible by the Housing Act 1996 (HA 1996) unless notice was served beforehand stating, (or it was written into the tenancy agreement), that it would not be an AST, (or one of the exceptions mentioned in respect of ATs applies). Except for not offering tenure security over the long term, an AST is an AT.

To stop an AT and AST, a tenant may serve a break notice or, in the case of a periodic tenancy, a notice to vacate. However, the notice cannot be served before the tenancy is granted, as it would make it unenforceable under HA 1988, s. 5(5). Alternatively, when the predetermined period is up, the renter can just vacate.

However, if they continue to occupy the space after the defined term has passed, a statutory periodic tenancy will form, which must be ended with a notice to quit that provides the necessary amount of notice depending on the length of the tenancy.

The rules of HA 1988 primarily limit a landlord’s options regarding the termination of an AT or AST. For instance, exercising a right to forfeit (in the traditional sense) will not terminate the lease. Possession of the property can be transferred to a landlord under either:

  • Section 8, if the landlord can rely on the grounds that are available (rent arrears, anti-social behaviour, and the landlord needing the property for their own residence); some of the grounds are required, meaning that the court must grant possession if the case is made out, and others grant the court discretion over whether to grant possession even in cases where the case is made out.
  • The s. 21 procedure, which requires the court to issue a possession order when the necessary notice has been given, and court proceedings have been issued and served, only applies to ASTs at the conclusion of the stipulated period.

Secure tenancies

A Local Authority (LA) may issue any of the following forms of tenancies (although not Rent Act tenancies, ATs, or ASTs).

  • Secure tenancy: covered by section 79 of the Housing Act 1985 (HA 1985), this is the most typical kind of tenancy given by LAs.
  • Degraded tenancy: According to HA 1985, s. 82A, a tenant who has engaged in anti-social behaviour relating to housing or has utilised the property for illegal purposes may have their secure tenancy reduced to a 12-month probationary lease.
  • Introduction tenancy: a probationary tenancy that is given for a maximum of 18 months, with a 12-month trial term after which it automatically becomes secure (Housing Act 1996, s. 124).
  • A sort of stable tenancy known as a flexible tenancy may exist in some situations, such as when the fixed period granted is at least two years, and the tenant was informed in advance that the tenancy would be flexible. Section 154 of the Localism Act of 2011 governs these.
  • A family intervention tenancy is a tenancy of a dwelling house awarded to a tenant who has been (or may have been) the subject of a possession order due to anti-social conduct in lieu of an AT or secure tenancy.

Common law tenancies

Tenancies that do not fit under any of the statutory security of tenure regimes are known as common law tenancies. Depending on whether a common law tenancy is, there are different conditions for ending it and regaining possession.

  • Fixed period: the tenant loses control of the property at the end of the time, and the landlord gains possession. It would be unprofessional to serve a notice of resignation, and none is necessary.
  • Periodic tenancies (from the beginning or after the tenant continues to occupy the space after the fixed term has expired): notice of termination must be given, including the prescribed information required by section 5 of the Protection from Eviction Act 1977 (PEA 1977). It must also provide notice equal to the duration of the tenancy, and under PEA 1977, s. 5, it must be given for a minimum of four weeks.

A court order for possession is necessary if a tenant refuses to vacate after their tenancy has ended because residential common law renters are protected under PEA 1977.

Part 55 of the CPR will govern the possession process.

Agricultural tenancies

PD solicitors provide advice with the ending of many kinds of agricultural tenancies, such as:

  • Agricultural holdings: Agricultural tenancies granted prior to September 1, 1995, are governed by the Agricultural Holdings Act 1986 (AHA 1986).

Under AHA 1986, s. 27, the landlord may issue an unqualified notice of termination or a notice of termination that specifies the reason(s) for the termination of the tenancy. The notice to quit can only go into force if the tenant delivers a counter notice within a month of the original notice, and only then with permission from the Agricultural Land Tribunal (ALT) in Wales or the First-tier Tribunal (Property Chamber) (FTT) in England. Only if one of the six grounds is established and the ALT/FTT is convinced that a just and reasonable landlord would, under all the circumstances, demand upon possession can it grant its consent.

A tenant cannot serve a counter-notice if the notice to quit lists one of the exceptional grounds (or “Cases”) listed in AHA 1986, S 3 Pt 1 – sometimes referred to as the “seven deadly sins,” though there are really eight of them. However, in some cases (A, B, D, and E), the tenant has a month to serve a notice contesting the validity of the notice to quit and requesting arbitration of the dispute. For the remaining cases, on the other hand, the tenant may challenge the validity of the notice to quit in any court proceedings pertaining to possession of the holding. The Cases cover situations where the landlord has the right to invoke Case A and provide suitable alternative housing if the tenant is over 65, or where the tenant has neglected to remedy a breach of their tenancy agreement that could be remedied, such as failure to pay rent (Case D).

  • Farm business tenancies: Under the Agricultural Tenancies Act of 1995 (ATA 1995), an agricultural tenancy awarded after September 1, 1995, provided it satisfies the “Business Conditions” and either the “Notice Conditions” or the “Agriculture Condition.” There is no long-term security of tenure available to tenants under farm business tenancies. However, tenants whose tenancy was granted as an annual periodic lease or for a fixed term of more than two years are provided certain statutory protection under ATA 1995.
  • Residential rentals to farm labourers: properties rented to farm labourers (also known as “tied lettings”) under the terms of their employment contracts are typically governed by the Rent (Agriculture) Act 1976 R(A)A 1976 for tenancies started before January 15, 1989, or HA 1988 as a “assured agricultural occupancy” for tenancies began after that date. Both legislative frameworks provide for different reasons why the landlord may request possession.

It should be noted that the following Welsh tenancies will remain in place and not be converted to converted occupation contracts because they are specifically exempt from the RH(W)A 2016 provisions:

  • A tenancy on an agricultural holding as defined under the AHA of 1986.
  • A farm business tenancy in accordance with ATA 1995.
  • A statutory tenancy or a protected occupancy as defined by R(A)A 1976.

Terminating tenancies

The principles of ending commercial and residential leases in accordance with common law or statutory security of tenure frameworks are covered in the guidance above. Another way to end a tenancy is by:

  • Break notice.
  • Forfeiture.
  • Surrender.

Break notice

An option to terminate the lease before the agreed-upon expiration date may be included in a fixed-term lease for one or both parties. This is referred to as a break clause or break option. Unless the lease specifically specifies otherwise, time is important for all actions to be completed to activate a break option.

When creating and delivering a break notice, there are several things to consider, such as:

  • When the break notice can be served – for instance, at any time (rolling break), or must it start on a specific date, or at predetermined intervals (every three years), or in response to a specific event (e.g., a landlord deciding to redevelop a property).
  • The break notice is properly formatted, the party looking to invoke the break clause should review the lease for any specific instructions on notice format. If a specific notification form is required under the lease, it must be used.
  • Ensure the break notice is delivered correctly – the majority of leases contain clauses that specify how the notice must be delivered, either as a stand-alone item or as part of the break clause. These clauses may be obligatory, meaning the service will not be valid if the required method is not employed. Statutory means of service, such as those provided by LPA 1925, s 196, or LTA 1927, s 23 may also control the lease. In those circumstances, care must be taken to guarantee adherence to the contractual and legal procedures.
  • Any prerequisites are met; for instance, the tenant’s ability to terminate the lease may depend on their ability to pay the full amount owed, complete their maintenance responsibilities, or turn over vacant possession. The break will not function if the prerequisite is absolute and is not met. There might be more leniency about what constitutes appropriate compliance if it is qualified, for instance, by terms like “reasonable” compliance with mending responsibilities, etc.
  • Make sure the break notice is delivered to the right person or parties; if the lease or reversion has been assigned, the original parties to the lease may not be the ones who can exercise the break option. The benefit and responsibility of a break provision shall transfer automatically upon assignment unless otherwise specified in writing. When serving notices, it’s critical to identify the appropriate party.
  • The relationship between any required form notice under a statutory security of tenure regime and the break notice that is being served.

A corpus of case law exists pertaining to circumstances in which the court has determined that a break notice is legitimate despite errors in compliance with the aforementioned concerns. The majority of cases build upon and proceed from the criteria established in the seminal case of Mannai v. Eagle Star, where the House of Lords employed the question, “Is the notice very apparent to a reasonable tenant reading it? Does it seem obvious that he cannot be duped by it? In light of this, the Mannai decision permits the court to maintain the legality of a notice in the event of a minor error provided that the recipient would not be misled. The notice is clearly understood by a reasonable recipient who is aware of the terms of the tenancy and can be reasonably construed based on the specific facts of each case.

Forfeiture

The landlord may choose to set the lease terms if they have a right to forfeit. The forfeiture right needs to be either:

  • Be included specifically in the lease as a provision (for instance, a re-entry or forfeiture clause stating that the landlord may reclaim the lease in the event of certain covenant violations, such as nonpayment of rent within 14 or 21 days after the due date).
  • Have resulted from a tenant’s breach of an express or implicit condition or from a clause in the lease that is so important that a breach of it deems the landlord liable for forfeiture, even in the absence of a forfeiture clause.

A landlord may not be allowed to forfeit even if there is a right to do so and that right has materialised (for instance, rent has not been paid within the 14 days as required by a re-entry provision). This is because the landlord may have waived that right. Waiving the right to forfeit is any action that acknowledges the lease’s ongoing existence, whether directly or indirectly. If a landlord knows about a breach and accepts the lease as is, they will relinquish their right to forfeit.

Demanding or accepting rent, authorising the assignment or sublease of a property, sending notices under the lease, setting up an inspection, and requesting an injunction for a breach are all common examples of waivers. Depending on whether the violation is one-time (like illegally sharing employment) or ongoing (like nonpayment of rent), the waiver may or may not be fatal to the right to forfeit.

When a landlord exercises forfeiture on the grounds of unpaid rent, they may immediately proceed to forfeit the lease. If there are any additional violations, the parties shall first serve a notice under LPA 1925, s. 146, which shall state the nature of the breach, require that it be remedied (if remediable; for instance, a breach of an alteration covenant may be remedied, but an unlawful subletting cannot), and, if appropriate, require compensation.

After that, the landlord may forfeit through:

  • Peaceful re-entry, or physically returning to the property; however, this is not appropriate for residential properties, and commercial properties still require caution because peaceable re-entry is limited to situations in which no one is present who is opposed to the re-entry at the time of forfeiture.
  • Legal proceedings – in accordance with CPR Part 55.

Mortgagees, subtenants, and tenants can request relief from forfeiture. If they prevail, the court will decide which party applies and under which statutory provision to give a new lease, or it will reinstate the existing one.

Surrender

A tenant who surrenders their lease to the landlord does so. The landlord gains ownership of the lease when it ‘merges’. At the moment of surrender, rent and the obligation to uphold the lease’s stipulations will terminate. But if there isn’t a clear release, all parties are still accountable for any violations that occurred before the surrender. If there are joint tenants, only one must participate for the surrender to be successful. A surrender is not required to be accepted by the landlord. A surrender may be inferred (occurring by operation of law) or explicit.

Enfranchisement

Practitioners of PD provide advice on problems pertaining to long-term residential leaseholders’ statutory rights to an extension of their lease or the acquisition of their home or apartment’s freehold (enfranchisement). Common disagreements include those on the legality of serving statutory notices and/or disagreements about the conditions outlined in a lease extension or enfranchisement agreement. In brief, the legal framework stipulates that:

  • Owners of apartments who meet the requirements are eligible to apply:
  • ln accordance with the Leasehold Reform, Housing and Urban Development Act of 1993 (LRHUDA 1993) for a 90-year lease extension. The landlord must reply with a counternotice under section 45 once the tenant serves a notice under section 42 to start the process. The tenant may apply to the FTT (if the property is in England) or the LVT (if the property is in Wales) to determine the terms of the acquisition if the terms of acquisition are still up for dispute two months after the service of a counternotice.
  • To purchase the freehold jointly with the necessary number of other eligible tenants in accordance with LRHUDA 1993. To start the procedure, the landlord must serve a counternotice under section 21 to the tenants who have served an initial notice under section 13. If the landlord wishes to contest the right, they can take their argument to the County Court for a declaration of rights. In accordance with CPR Part 8, the nominated purchaser needs to apply no later than two months from the day the counternotice was sent.
  • Homeowners who meet the requirements are eligible to apply:
  • In accordance with the Leasehold Reform Act of 1967 (LRA 1967) for a 50-year lease extension. The tenant must serve a notice in accordance with section 5 to start the process. Under LRA 1967, s. 14, the County Court has jurisdiction over most matters, including processes to ascertain what terms should be included in a lease giving a new tenancy. Nonetheless, the FTT handles some matters, such as rent due under LRA 1967, s. 15(2).
  • To purchase the freehold (as well as any intermediate leasehold holdings) jointly in accordance with LRA 1967. Section 5 requires the tenant to serve an initial notice. Most matters fall under the jurisdiction of the County Court, including processes to ascertain what terms should be included in a transfer in compliance with LRA 1967, 10 or 29(1). Nonetheless, the FTT handles some matters, such as the amount due for the residence, in accordance with LRA 1967, s 9.

Under the Landlord and Tenant Act of 1987, qualifying tenants of apartments have the right of first refusal, allowing them to purchase their landlord’s interest if and when it proposes to dispose of it. As a result, PD practitioners may also be involved in providing advice regarding the validity of service issues and other disputes relating to rights of first refusal.

Lease Covenants

The tenant would be free to assign (i.e., transfer the lease to a new tenant), underlet, change use, or alter the premises if there were no covenants restricting their freedom. However, they would have to ensure that any change of use would not result in waste and that it would adhere to the property’s current planning use. Thus, to safeguard the landlord’s interest, covenants in leases typically impose limitations on a tenant’s capacity to:

  • Assign or Lease: These covenants can be totally qualified (i.e., the covenant goes on to provide that the landlord’s consent is “not to be unreasonably withheld”), qualified (i.e., the tenant can only assign, underlet, etc., with the landlord’s consent), absolute (i.e., they are a straightforward prohibition), or fully qualified. A statute steps in to ensure that qualifying covenants become fully qualified in the case of assignments. In cases where a covenant is either wholly or partially qualified, the landlord’s approval must be confirmed within a reasonable timeframe after the application is submitted, along with documented justifications demonstrating that the consent was not unjustly withheld. Whether or not the landlord was reasonable in refusing to consent is a topic of frequent dispute.

The International Drilling Fluids v. Louisville Investments (Uxbridge) case established the general guidelines governing the reasonableness of a consent refusal. Among these guidelines is the rule that a landlord cannot refuse consent for reasons unrelated to the landlord-tenant relationship. A substantial corpus of case law addresses the question of whether consent was rightfully denied in several particular circumstances. For further details, including the tenant’s remedies for an arbitrary withholding of consent and the landlord’s remedies for unauthorised assignments or underlettings.

  • Alter the use of the property, such as using it for residential, commercial, or restaurant purposes. Once more, these covenants may be fully qualified, qualified, or absolute. But unlike in the case of assigning and underletting, the statute does not step in to turn qualified covenants into fully qualified covenants or require confirmation of whether or not the landlord consents to be given within a reasonable timeframe with written justifications, among other things.
  • Modify and enhance the demised premises; the covenant’s goal is to shield the landlord from additions and adjustments the tenant makes that could jeopardise their property rights. “Alteration” is typically understood to mean changing a building’s shape or structure. Once more, these covenants could be conditional or absolute.

Under LTA 1927, §19(2), the alterations covenant is understood to be subject to a provision that the landlord’s consent cannot be arbitrarily withheld if the covenant is qualified and the proposed alteration is an “improvement” (i.e., fully qualified). “Reasonableness” is not a fixed point but a spectrum. There is a dearth of case law defining what constitutes a “reasonable” refusal to consent to changes.

The Court of Appeal decided in Iqbal v. Thakrar that, with the appropriate modifications, the same rules that govern consent to assign or sublet should also apply to cases involving alterations. But under section 19(2), a landlord can demand payment of a fair amount for the reduction in the value of their interest, reimbursement for legal fees, and restoration upon the end of the term as a condition of giving approval. The statute doesn’t step in to mandate that consent be granted as soon as possible.

Furthermore, LTA 1927, s. 3 permits the tenant to make improvements and, upon vacating, to receive compensation for them, regardless of whether the lease contains an absolute covenant or other restrictions on making changes. The tenant must first go through a statutory notice procedure, giving the landlord the chance to object, and then the tenant must file a court application attesting to the fact that the improvement is “proper,” reasonable, and increases the property’s letting value.

When the landlord transfers their stake in the lease (assignment of the reversion) or the tenant assigns their interest in the lease (assignment of the term), there is another area where disputes may emerge regarding the transmission of benefits and liabilities of covenants. Whether a lease is “old” (mostly, one signed before January 1, 1996, when the Landlord and Tenant (Covenants) Act 1995 went into effect) or “new” (signed on or after January 1, 1996), will determine how benefits and obligations are transferred.

Lastly, basic advice regarding the landlord’s remedies for breach of lease covenants is a common request for PD practitioners.

Disrepair

Subject to a few exceptions and statutorily implied requirements, such as the following, there will be no implied obligations for maintenance if a landlord and tenant do not have clear repairing obligations in the lease:

  • Landlords: Certain repairing covenants regarding residential leases are implied by statute, and it is implied that a landlord shall make sure any premises retained are in a condition that will not cause harm to the tenant.
  • Tenants: It is assumed that they have a responsibility to use the property like renters and to refrain from wasting anything.

As a result, landlords and tenants typically ensure that a lease includes explicit clauses stating who oversees repairs and who is liable for covering the associated expenditures. For instance, a lease can state that, regarding an office in an office building, the:

  • The tenant bears the responsibility for maintaining the internal portion of the property (the demise) over which the lease was granted.
  • The landlord is responsible for the outside portion of the office building and any shared areas, including the lift and foyer. A “fair and reasonable” part of the repair costs is typically mentioned in a lease, and in that case, the lease is also likely to provide that the landlord can recover some of those costs from the tenant through a service charge.

There may be disagreements on the scope of certain repair duties, for instance:

  • What is the obligation’s subject matter? Specifically, does it cover the demised premises’ roof? Is it only the inside walls, or does it also include the external walls?
  • What is the repair standard? ‘Such repair as having respect to the age, character and vicinity would make it reasonably fit for the occupation of a reasonably minded tenant of the class likely to occupy it’ is the conventional formula.
  • How much work needs to be done on the repairs? When repair is impossible, does the obligation allow for – or require – replacement? Tenants may prefer a patch repair to keep expenses down, but landlords may prefer a full repair be done when the liability is on them, and they may collect through the service charge.

The following are some possible remedies for both landlords and tenants:

  • For tenants: rent set-off, self-help, special performance, or damage claims.
  • for property owners [Landlords]:
  • Damages, forfeiture, entrance, and repair pursuant to a “Jervis and Harris” clause or particular performance within the term.
  • When the term is over: terminal dilapidations claim, which is a disrepair damages claim. The Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property upon Termination of a Tenancy (the “Protocol”) must be followed if the lease included commercial property before making a claim.

Any claim for reinstatement of alterations made to the premises will often be included in dilapidations claim. If the licence for alterations and/or lease does not specifically require the tenant to reinstate the demised premises, then a valid alteration becomes part of the premises, and the tenant cannot be forced to do so. If there is a reinstatement obligation, every clause pertaining to providing notice that requires or does not need reinstatement must be delivered in line with the requirements of the obligation.

Rent and service charges

Rent

PD practitioners are often requested to advise on collecting rent arrears. When a renter is behind on their rent, a landlord has a few choices. But before pursuing any legal action to recoup arrears, landlords had to think about:

  • Since taking legal action to recoup the arrears could renounce the ability to revoke the lease for non-payment.
  • Whether the renter is insolvent in any way and, if so, how this affects the potential recovery options.
  • If there are any questions about the restriction period. After six years since the arrears became due, no action may be pursued to reclaim the unpaid rent.
  • Whether a rent demand was legally required (i.e., under the terms of the lease or by statute, a tenant under a long lease is not obligated to pay rent unless the landlord has served them with a notice in accordance with section 166 of the Commonhold and Leasehold Reform Act 2002).

Among a landlord’s options for recovering unpaid rent are:

  • Litigation for the recovery of debt.
  • Taking money out of a rent deposit.
  • Serving a statutory demand.
  • Requesting payment of rent from a surety.
  • Sending a notice in accordance with section 17 of the Landlord and Tenant (Covenants) Act 1995 (LT(C)A 1995) to a former tenant or guarantor to collect the rent owed.
  • Only available regarding commercial leases, commercial rent arrears recovery (CRAR) is a landlord’s directive to enforcement agencies to collect rent or seize goods.
  • Delivering notice requiring rent to be paid directly to the landlord; if rent is not paid, the landlord may pursue CRAR action against the subtenant.

Service Charges

It makes sense for the landlord to oversee repairs, maintenance, and services in a multi-tenant building and collect the associated costs from the tenants via a service charge. Within a:

  • Commercial lease: Commercial leases are fully contractually governed and are not subject to statutory supervision. This includes the tenant’s need to pay service charges and the landlord’s authority to collect costs. Nonetheless, a substantial corpus of case law exists concerning whether or not different goods fall under the express contractual provisions for the recovery of expenses paid in handling the item, depending on the specifics of each case (see: Disrepair). The procedures for recovering commercial service charges are comparable to those for recovering rent (apart from CRAR, which does not apply to service charges). However, it is important to consider the specific terms of the lease and any other pertinent documents, such as the guarantee and/or rent deposit, when recovering commercial service charges. For instance, does the rent deposit allow for the deduction of service charge arrears?
  • Residential lease: A service charge clause in a residential lease determines the tenant’s payment obligation. The Landlord and Tenant Act 1985 (LTA 1985), sections 18–25, severely restricts the landlord’s power to designate management agents, perform repairs, and recoup expenses. These sections address the following points:
  • Limitations on the reasonableness of service charges: In this regard, tenants and landlords in Wales and England, respectively, have the right to inquire about the reasonableness of a proposed fee or the LVT in Wales.
  • Requests for a cost summary that is relevant.
  • the requirement for a written summary of rights and obligations, with established guidelines for its form and substance
  • Consultation obligations: A landlord must notify everyone who is anticipated to pay for any repairs, maintenance, or improvements before proposing to do any work that will cost a single service charge payer more than £250 (LTA 1985, s 20). This serves the dual purpose of informing the renters of the landlord’s intentions and getting their feedback on the suggested work. The landlord must notify the payers of service charges before awarding a contract for the provision of services for a duration longer than 12 months if the annual proportionate cost to any tenant exceeds £100.

Property Insolvency

Statutory demands

A statutory demand is an official demand for payment of debt made on the debtor’s behalf by a creditor; it is not a judicial procedure and need not be made in person. It is typically made as a prelude to:

  • Bankruptcy in relation to personal insolvency.
  • In the context of corporate insolvency, liquidation.

It is a prerequisite for bankruptcy but not for liquidation; that is, a landlord may move straight forward with filing a winding-up petition to place a tenant in liquidation. However, the threat of insolvency resulting from serving a statutory demand is a potent weapon if a landlord’s goal is debt recovery rather than forcing their tenant into bankruptcy. If tenants can do so, they will want to avoid the landlord going to the next stage, which is filing for bankruptcy or winding-up (liquidation). For instance, a statutory demand may be made in relation to:

  • Rent arrears.
  • Non-payment of a liquidated obligation, such as amounts owed under a repair notice.
  • Non-payment of a judgement debt.

A statutory demand may only be served in accordance with the Insolvency Act 1986 (IA 1986) on:

  • An individual if the debtor has an uncontested liquidated and unsecured debt that exceeds the £5,000 bankruptcy minimum threshold (the bankruptcy level) and there isn’t a cross-claim that equals or surpasses the debt.
  • A business if the business is in debt by at least £750.

Prior to serving a statutory demand, all other remedies – such as forfeiture, debt collection, CRAR, pursuing former tenants or guarantors, or withdrawal from a rent deposit – should be taken into account. To increase the chances of recovering the unpaid amounts, a landlord should attempt to determine the tenant’s assets and the number of other creditors, especially secured creditors, after serving a statutory demand and before filing for bankruptcy or winding-up.

Landlord or tenant insolvency

The insolvency of a landlord or renter presents several issues for the other party, such as:

  • Tenant insolvency: making sure the property is safe and secure, examining the landlord’s options for collecting unpaid rent, making certain covenants are followed going forward or taking possession.
  • Landlord insolvency: these could include where rent is to be paid, if a rent deposit is safe, if the landlord will fulfil their end of the bargain, how to handle rent reviews or renewals, and the implications of a superior landlord’s enforcement action or disclaimer of the superior lease.

Whether the landlord or renter is an individual or a firm will determine the form of insolvency that applies:

  • Personal insolvency consists of:
  • Individual voluntary agreements (IVAs).
  • Bankruptcy.
  • Order for debt relief.
  • Administration orders.
  • The following are examples of corporate insolvency:
  • Administration.
  • Liquidation.
  • The insolvency of retail stores and company voluntary arrangements (CVAs).
  • Receivers.
  • Independent moratorium under the IA 1986.
  • Restructuring Plan in Compliance with the Companies Act of 2006.

When a tenant becomes insolvent, there are limits on what a landlord can do to enforce the agreement. These restrictions can include the inability to pursue debt recovery procedures, renounce a lease, or draw from a rent deposit, among other things.

Dissolution, bona vacantia and disclaimer

Disclaimer

In the event of bankruptcy, liquidators and trustees (the “trustees”) may reject any onerous property, which is described as:

  • Any contract that is not profitable.
  • Any other property that cannot be sold or is not easily sold, or that could result in a need to make payments or carry out other burdensome tasks.

It is important to remember that the Crown may reject a lease when it becomes bona vacantia property; for further information on this, refer to the section below on “Bona vacantia and escheat.”

While it can and does happen regarding freehold property, office holders most frequently deal with onerous property in the form of leased property.

The following results can be obtained from a notice of disclaimer issued by a trustee or liquidator:

  • In relation to the property disclaimed, it functions to ascertain the rights, interests, and liabilities of the business or the bankrupt or the bankrupt’s estate as of the disclaimer date.
  • With effect from the beginning of the trustee’s appointment, a disclaimer in bankruptcy releases the trustee from any personal duty about the relevant property.
  • It does not affect any other person’s rights or duties, except what is required to release the corporation or the bankrupt or bankrupt’s estate.
  • Anybody who suffers loss or harm because of the disclaimer has the right to present proof of such loss or damage during the winding-up or bankruptcy process.

The effect of the disclaimer on any third parties can, therefore, be complicated, even though the situation is straightforward if there are no affected parties (such as guarantors or subtenants), as the lease will simply terminate. In that case, the lease itself will continue to exist or be deemed to exist despite the absence of a tenant, so any guarantor remains liable as such. Although the lease does not legally bind, they are still permitted to occupy the space as long as they uphold the mortgagee’s rights, such as the power of sale, and they comply with the tenant’s obligations under the disclaimed lease.

In the event that the disclaimed property is freehold, the Crown will get the freehold interest as an escheat (see below), although this will not impact the interests of any lessees or mortgagees.

A party with an interest in or responsibility under a lease may request that the court issue an order vesting the lease in them.

Dissolution

Businesses may be dissolved for a number of reasons, such as:

  • A renter is removed from the register due to noncompliance with Companies House regulations.
  • After liquidation is finished, albeit in that case, the liquidator will typically have taken care of any lingering property interests, through disclaimer or otherwise, before dissolving the business.

Bona vacantia and escheat

The Latin phrase “bona vacantia” means “ownerless goods.” As per Section 1012 of the Companies Act 2006 (CA 2006), upon dissolution, the Crown (or the Duchy of Lancaster or the Duke of Cornwall, if the company’s registered office was in Lancaster or Cornwall, respectively) is entitled to all property and rights that were vested in the company or held in trust for it immediately before dissolution. This is known as bona vacantia.This covers leased property but excludes any property that the business has in trust for third parties. The Crown (or Duchy) may, and often does, disclaim its interest in the lease if the lease is burdensome.

If the property is disclaimed, it is considered to have never vested as bona vacantia in the Crown. In addition, the disclaimer terminates the company’s rights, interests, and liabilities regarding the property it has disclaimed. However, it does not affect the rights or liabilities of third parties unless it is required to absolve the company of any liability. Similar to a disclaimer in an insolvency situation, the court can provide a party with a responsibility or interest in a lease an order to vest the lease in that party.

Although CA 2006, s. 1012 makes no mention of escheat, several authorities have acknowledged that freehold property passes in the Crown (really, the Treasury Solicitor) as bona vacantia upon dissolution. The Crown then has the right to renounce the property under CA 2006, s. 1013. After the disclaimer, CA 2006, s. 1012 will be invoked to determine that the property has not vested in the Crown. But then there will be an automatic escheat, returning the freehold to the Crown. Until the Crown takes possession of or exerts control over the property, it will not be held liable. The judge in the case of Scmlla Properties Ltd v. Gesso Properties (BVI) Ltd called this a “boomerang effect.”

Remedies for mortgagees

Practitioners of PD also offer advice regarding the rights of lenders in relation to mortgages. A stake in real estate is granted via a mortgage. “A conveyance of land…for the payment of a debt or the discharge of some other obligation for which it is given” is the traditional mortgage definition. The applicable security document will typically grant the lender (the mortgagee) the following rights once the mortgage security is enforceable:

  • Acquire ownership of the land.
  • Appoint a receiver (or in some cases, an administrator).
  • Sell the property without going to court.
  • File a foreclosure application with the court (which is rarely utilised in practice),

LPA 1925, s 101, grants the lender the power of sale, subject to LPA 1925, s 103 regulations. This gives a lender the authority to start possession procedures once:

  • A portion of the mortgage’s interest is past due and has been unpaid for two months.
  • (In the case of a repayable on-demand mortgage): three months have passed since the notice demanding payment of the mortgage funds was served, and payment has still not been received.

Lenders are required to abide by the Pre-Action Protocol for Possession Claims Based on Mortgage or Home Purchase Plan Arrears in Respect of Residential Property (the Protocol), which outlines the conduct that the court will typically anticipate from the parties before the issuance of possession proceedings, in cases where there is a possession claim based on arrears in relation to residential property. It considers what a lender must if a borrower (mortgagor) defaults, whether a claim should be initiated immediately or delayed, and how the lender should handle any payment proposals from the borrower. It also covers the situation with permitted renters and the fallout from a failure.

Lenders frequently choose not to take possession and instead use their power of sale since they are subject to several duties if they choose to do so, including liability for garbage and repairs as well as leasehold conditions.

Any tenant in the mortgaged property may be entitled to be joined as a party to the proceedings and fight eviction if they can demonstrate that the tenancy exists and that the lender is bound by it (i.e., where the tenancy was not granted in violation of the mortgage deed) if a lender brings possession proceedings due to the borrower’s default on mortgage payments.

Furthermore, the Mortgage Repossessions (Protection of Tenants etc.) Act 2010 applies in cases where a landlord of a mortgaged property grants a residential tenancy without the lender’s consent. This Act gives a limited degree of protection to certain types of residential tenants, such as AT and Rent Act tenants, by giving the court the authority to postpone the execution of an existing order or the granting of a possession order for a maximum of two months.

In addition to other easements and covenants, rights of light

Rights of Light [ROL] and easements

An easement is an implicit right that the owner of a legal estate (dominant tenement) has over property that is owned by another individual (servient tenement). Positive easements, such as a right of way, grant the dominant owner access to or usage of the servient land. They may, however, have unfavourable effects, such as limiting actions on the servient land and granting the dominant owner the right to obtain resources from it (such as the right to light, or ROL).

A private nuisance action may be initiated in response to improper interference with an easement. Nevertheless, not all interference with it will be considered an actionable wrong depending on the type of easement and interference produced.

The party benefiting from an easement may pursue the following remedies if an actionable interference occurs:

  • An injunction to restrain the interference.
  • Damages.
  • A ruling by the court attesting to the easement’s existence and scope.
  • Abatement [reduction].

An ROL could be given:

  • Expressly or impliedly.
  • In accordance with Wheeldon v. Burrows ruling.
  • Through a prescription.

The implied right to light that is most frequently found is a prescriptive right outlined in the Prescription Act of 1832, which mandates uninterrupted real enjoyment of light access for 20 years. In addition to freeholders, a tenant of the dominating land may also obtain the right, to withhold it from the freeholder of the servient land and any tenant(s) of that freeholder. Even in cases where the dominant land owner and the servient land’s freehold owner are the same, the principle will still hold true.

ROL allegations usually surface in relation to significant advancements. PD practitioners are frequently asked to provide risk mitigation advice at the start of the development process. They do this by going over all pertinent leases and property titles to determine who might benefit from a right of light. An ROL surveyor then reports how much the development may affect any ROL when that procedure is finished. Depending on the duration of the ROL, the degree of ROL interference, and the parties’ negotiating stances, there a number of choices available in the event that ROLs exist. These choices could consist of:

  • Putting in place Light Obstructions Notices (LONs), which function as a hypothetical barrier that prevents a ROL from being enjoyed; for this to be effective, it must be done before the ROL has been enjoyed for 19 years and one day.
  • Arranging a contractual payment arrangement in exchange for the ROL’s release.
  • Acquiring indemnity insurance for the ROL (this should be done early in the process, as it will probably be nullified if the parties who stand to gain from the ROL have already been contacted about a negotiated settlement or if an LON has been served).
  • Decreasing the planned development to include especially controversial ROLs.

The typical course of action for interference with a ROL is to seek injunctive relief, which stops a development from moving forward or orders the demolition of the offending structure development starts before all ROLs have been addressed. This is frequently the case when an urgent and temporary injunction is requested. Subsequently, the injunction may be lifted or replaced with a final injunction, with damages being granted.

Restrictive covenants

A restrictive covenant forbids the covenantor from carrying out the stated action, such as constructing on the property or utilising it for specific uses. Restrictive covenants, in contrast to “positive” covenants, can “run with the land,” meaning that subsequent owners or occupiers will be subject to the restriction.

Three categories of covenants exist that limit how a seller may use their land:

  • Covenants imposed solely for the advantage of the seller; these covenants are personal to the seller and are only enforceable by it, unless otherwise designated.
  • Covenants put in place as the owner of another land, of which the sold land was a portion, and meant to safeguard or improve the unsold land; these can “run” with the land in equity (as long as certain conditions are met) and are enforceable without the owner’s express assignment of the land for the duration of the land’s benefit.
  • Covenants on a land sale to different buyers who are meant to jointly benefit from and be bound by the covenants, with their separate successors in title. This type of covenant is typically encountered in sales under building projects. They are enforceable in cases when the parties intended for the different purchasers of different portions of a defined area of land from a common seller to have the ability to enforce the covenants against one another.

One can get a declaration from the court about long-term leasehold and freehold land, specifying whether the land is subject to any restrictions and, if so, what kind, how much, and how enforceable they are.

If the applicant can demonstrate that one of the grounds listed in LPA 1925, s. 84 applies, the Upper Tribunal (Lands Chamber) (UT) has the authority to discharge or amend a restrictive (but not a positive) covenant. The most often cited defences are that the covenant is out of date or that it prevents development or legitimate usage.

An injunction is the primary remedy for violating or threatening to violate a restrictive covenant. In cases where the breach has yet to occur, the court will almost certainly grant an injunction. It is helpful to remember that an injunction may be granted even after a structure has been finished, as demonstrated by the case of Mortimer v. Bailey. It is not a safe assumption that the court will order destruction in lieu of awarding damages once a building is up. An award of damages may be made by the court in place of an injunction.

Conflicts involving party walls, neighbours, trespass, and adverse possession

Neighbour conflicts/disputes

The following are the most typical forms of neighbour disputes:

  • Among the most challenging and sometimes dangerous neighbour issues are noise and disturbance. Before taking any private action, consider whether it might make sense to ask local and other authorities for assistance in the form of police participation, antisocial conduct orders, or fines.
  • Trees and hedges: The tree owner may be required to pay damages if the tree’s roots cause harm, but it must be proven that the owner knew or should have known about the risk. The principles of reasonableness between neighbours, both literal and figurative – and reasonable foreseeability – which form the foundation of the nuisance law – must be applied to establish liability. Local authorities may receive complaints from evergreen hedges that reach a height of more than two metres.
  • Boundaries – HM Land Registry title plans only document the overall location of the borders for a property. As such, in a border dispute, consulting the deeds or relying on legal presumptions is still required. Typically, the deed that initially divided the two parcels of land into separate ownership serves as the best proof of property borders. It is recommended to consult the conveyance language and any attached plans. When reading the papers, a judge may also consider extrinsic evidence.

A suggested boundary dispute protocol (the Protocol) can be used in cases where neighbours disagree on where to draw the boundary between their properties. It may also be applicable when there is a claim for adverse possession, covering both residential and commercial properties. The Protocol states that the parties shall take into consideration alternative dispute resolution (ADR), such as arbitration, expert determination, or mediation, if they are unable to agree on the boundary after completing the first phases of the Protocol. The Protocol states that if alternative dispute resolution (ADR) proves to be ineffective or unsuitable, the matter will be referred to the court or the First-Tier Tribunal (Property Chamber (FTT)) for resolution (via a Land Registry application for determination by the Registrar, which is then contested).

Adoption of the Protocol is voluntary as it has no formal significance under the norms of courts or tribunals. However, if the disagreement is not settled and proceedings are started, a court or tribunal may consider a party’s failure to abide by the Protocol when determining who is responsible for paying costs.

  • Conflicts involving the attempt by parties to claim or modify rights of way, or shared access (i.e., easements)

Even though they might not have a large monetary value, neighbour disputes can be among the most contentious and challenging to settle. Even after a disagreement has been settled, it is crucial to consider the possibility of excessive expenses and a long-term effect on neighbour relations.

Conflicts about party walls

The Party Wall Act (PWA) of 1996 has an impact on building owners who want to:

  • Build a new wall or structure at the edge of the property that borders it.
  • Work on party walls or other constructions that are already there.
  • Dig a hole up to three or six metres (depending on the depth of the work) away from a neighbouring building or structure.

The way PWA 1996 operates is by granting building owners the power to make repairs to party walls that would otherwise constitute trespassing onto neighbouring property or expose them to liability for nuisance. Additionally, it establishes a process for resolving disputes, provides some protections to neighbouring owners, and allocates costs in specific situations. The individual planning the work (referred to as the building owner) starts by giving notice to the neighbour who will be impacted (referred to as the adjoining owner). The type of works involved determines the notice’s content and duration. After then, the owner next door is given the chance to agree or disagree. In the event of an objection or lack of response, the dispute procedure takes effect, requiring the appointment of surveyors to evaluate the works and objections and produce an award outlining the building owner’s permissible scope of work subject to any restrictions.

Trespass

The illegal presence of someone on property that belongs to someone else is known as trespassing. This includes:

  • Wrongfully walking across, riding over, or driving over it.
  • Occupying it or driving out the occupant (also known as squatting).
  • Unlawfully lingering after authority expires (for example, a former tenant who stays in possession against the owner’s wishes is considered a trespasser from the date the tenancy was determined, regardless of any legislative protection).
  • Unauthorised use of it for a purpose other than that for which a private or public right of way has been given.
  • Destroying whatever that is affixed to it permanently.
  • Destroying whatever that is affixed to it permanently putting something inside or on top of it.

A landowner has several options for reclaiming possession from trespassers, such as:

  • Physical repossession,
  • Police arresting the trespasser for a crime – residential squatting is now illegal according to the Legal Aid, Sentencing and Punishment of Offenders Act of 2012.
  • Injunction (such as an interim or quia temporal injunction).
  • Claim for Possession under CPR Part 55.

In addition to the above remedies, a landowner may also seek damages in respect of the trespass.

Adverse possession

The process via which a trespasser, or squatter, gains title to land is known as adverse possession. The following are the two distinct sets of processes that are available:

  • Unregistered land: Unregistered land as defined by Section 15 of the Limitation Act 1980 (LA 1980) (as well as registered land covered under the Land Registration Act 2002 (LRA 2002)’s transitional provisions). Adverse possession, or the purpose to own the land, and 12 years of continuous factual possession are prerequisites for this method. Following the end of that time frame, LA 1980 keeps the “paper” owner from regaining control.
  • Registered land: Registered property as of October 13, 2003. After 10 years of occupancy, under this procedure, a squatter who can provide proof of their intention to remain in possession of the land may apply to be registered as the proprietor. The application will be denied if the registered owner requests that it be handled in accordance with LRA 2002, Schedule 6, paragraph 5, unless the squatter is able to meet one of the three requirements stated in that paragraph. The main effect of this is that, under the previous regime, squatters were entitled to register as proprietors of the registered estate upon acquiring title. However, under the new regime, this concept is effectively reversed, with registration – rather than possession – conferring title.

Code for Electronic Communications

The Electronic Communications Code (the Code) governs the legal relationships between landowners and operators to protect the physical networks of apparatus that support the provision of electronic communications. It also gives certain network operators – those who are registered with Ofcom: Register of Persons with Powers Under the Electronic Communications Code – the ability to install and maintain equipment like masts, base stations, cables, or fibre optics, along with ancillary equipment cabinets, power supplies, etc. The Code addresses several Code rights-related issues, such as:

  • Application for a Code agreement: In the event that the parties are unable to agree on the conditions of the Code rights, the operator may ask the court to issue an order compelling the land’s proposed site provider to grant a Code right or to be bound by one.
  • Statutory continuation of a Code agreement: Until a new agreement is signed, or the termination process is carried out, an expired agreement will remain in effect.
  • Termination of Code agreements: To terminate a Code agreement, a site provider may give the operator an 18-month notice period in accordance with paragraph 31. The site provider may choose to do so if there are repeated violations, payment delays, planned redevelopment, or other reasons that outweigh the benefits to the public. If the operator doesn’t serve a counternotice within three months, the agreement would terminate as per the notice. In the event that a counternotice is filed, the operator is required to file an application pursuant to paragraph 34 within three months of the counternotice, asking the court to determine whether there are sufficient grounds to end the agreement and, if not, what grounds remain for the agreement to continue.

Regarding agreements imposed by courts as well as processes for termination and modification, the UT has jurisdiction.

Contractual disagreements

PD practitioners may be asked to provide advice on possible remedies in cases where disagreements emerge over the terms of contractual property arrangements (e.g., claims for breach of contract, misrepresentation, or misstatement and mistake). Depending on the type of issue, a variety of remedies are possible, such as:

 

Remedy What is the remedy, and when does it arive?
Contract termination for breach or repudiation (also known as rescission for breach or discharge by breach).
When one party accepts the other’s repudiatory violation, the other may terminate the agreement and treat it as void. This remedy is frequently known as “rescission for breach.” Still, it should not be confused with “rescission ab initio,” which refers to rescission in the event of misrepresentation and results in a different remedy (see below). Termination for breach, in contrast to rescission ab initio, does not rewrite the terms of the agreement; that is, it does not impact rights and responsibilities that have already been fulfilled. The innocent party may file a lawsuit for damages resulting from the repudiation or for the loss resulting from the non-performance of future obligations, and both parties will be released from further performance of the contract.
Specific performance
The injured party may seek specific performance of the contract, which is when the court orders that a party must go ahead and complete a contract, in the event of a repudiatory breach (where a party fails or refuses to perform an essential or fundamental term of the contract and is taken to have decided to set the contract aside). In this scenario, the injured party may choose to "affirm" the contract rather than terminate for breach (see above). A discretionary remedy known as specific performance will only be allowed in cases where damages are insufficient to compensate the claimant fully. If you wait to seek this remedy, it may be denied, and damages may be granted in its place.
Damages
In cases where a contract is terminated for breach, the injured party is likely also to seek damages for loss caused by the non-performance of the contract. Damages for breach of contract can either be for the primary remedy sought, or they can be a remedy that the court orders as an alternative to the remedy sought (for example, instead of specific performance – see above).

Procedural issues

Tribunal and court guidance

The pertinent article above contains guidance regarding the court or tribunal procedure involved concerning the particular dispute (for example, LTA 1954 opposing court procedures). PD does, however, also include links to general guidelines on courts and tribunals, based on which is relevant given the nature of the issue. For instance:

  • Business lease renewals are handled by the County Court, or the High Court if necessary (i.e., complex factual disputes or significant legal issues).
  • Enfranchisement disputes – depending on the nature of the disagreement – are heard in either the County Court or the FTT.
  • Difficulties with the electronic communications code – the majority are handled in the UT.

Charging orders

A judgment for a debt is frequently just the beginning of the process of getting the amount owed, especially in cases where the debtor lacks the money to pay the judgment.

Getting a charge order is one way to enforce a court judgment that is used rather commonly in a property dispute; this is an indirect way of enforcement that secures the judgment debt instead of satisfying it. A charging order over land establishes an equitable charge (section 3(4) of the Charging Orders Act 1979), which secures the debt by ensuring that the creditor will be paid from any proceeds of sale that remain after all mortgagees and other charge holders with priority have been paid back. Obtaining an intermediate charge order and a final charging order requires two steps.

An order for the sale of the property can be obtained to enforce a final charge order once it has been obtained.

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