Property—Lexis®PSL comments on key developments in 2018 and 2019

17 Dec 2018 | 6 min read

In this year’s end of year comment, our Lexis®PSL Property team consider what their standout legal development was in Property in 2018. Our Lexis®PSL team also preview the anticipated talking points for Property in 2019.

First published on Lexis®PSL on 12 December 2018.

What was the standout legal development in your area this year?

The Supreme Court decision in Regency Villas Limited v Diamond Resorts (Europe Limited) [2018] UKSC 57. This is a key legal development which has extended the understanding of what rights are capable of qualifying as easements beyond that as stated in the Court of Appeal’s decision in Re Ellenborough Park[1956] Ch 131. These rights now include the right to use recreational and sporting facilities.

How has this impacted on practice in your area?

While the Supreme Court confirmed that a recreational easement could exist, it thought that the use of easements as the conveyancing vehicle for conferring recreational rights for timeshare owners on an adjacent leisure complex was hardly ideal, by comparison for example with a leasehold structure. It therefore seems unlikely that the mechanism in this case will be used going forward.
 

That said, practitioners dealing with land used or owned for holiday purposes (including timeshare) and where use is being made of leisure, recreational and sporting facilities on adjoining land, should check the terms of any conveyances and agreements as to the extent of the rights granted as it may be the case that those rights are not merely personal rights, but qualify as legal easements which will bind successors in title.

What Lexis®PSL content would you recommend to find out more about these developments?

Property key future developments tracker—2018 archive and News Analysis: The grant of recreational and sporting rights can create an easement (Regency Villas Title Ltd and Others v Diamond Resorts (Europe) Ltd and others).

What do you think will be the key development(s) next year?

The Royal Institution of Chartered Surveyors (RICS) has published a Professional Statement on Service Charges in Commercial Property (1st edition) (the Statement). The Statement is effective for all service charge periods commencing from 1 April 2019 and for the first time contains mandatory requirements. Although it is a first edition professional statement, it supersedes the RICS code of practice on service charges in commercial property (third edition), which has been in use since 2014.

What do you think this will impact and how do practitioners find out more?

The Statement does not override the provisions of existing leases and is not binding on the parties to lease negotiations or their lawyers, but it is likely to become increasingly difficult not to have regard to its provisions due to the professional implications for any surveyor involved. As a professional statement, the RICS will take account of its provisions when deciding whether a member has acted professionally and with reasonable competence and the code is also likely to be taken into account in court proceedings regarding the competence of surveyors. It would be unwise for any qualified surveyor involved in the negotiation of application of service charge clauses not to have serious regard to the provisions of the Statement due to the potential impact on their practice should they fail to do so. For examples of how the Statement may affect lawyers, and more information generally, see: A review of the RICS Professional Statement on Service Charges in Commercial Property (1st edition), September 2018 and Implications of the RICS Professional Statement on Service charges in Commercial Property.

Other developments of interest

If the various consultations proposing reform translate into legislation, together with various Bills currently going through Parliament also aimed at reform—eg Freehold Properties (Management Charges and Shared Facilities) Bill 2017–19, Housing Reform Bill 2017–2019, Tenant Fees Bill 2017–19, Private Landlords (Registration) Bill, Leasehold Reform Bill 2017–19, Homes (Fitness for Human Habitation) Bill 2017–19) then the landscape for residential property could look very different in 2019. These include:

It will also be interesting to see where we get to with reform to the Land Registration Act 2002. Following on from a consultation which took place as far back as 2006, on 24 July 2018 the Law Commission published its final report and draft Bill on the reform of the Land Registration Act 2002. The recommendations include measures to tackle fraud which is something of a hot topic at the moment as there have been a run of cases on conveyancing/mortgage fraud. See: Proposals for updating the Land Registration Act 2002 for the digital age.

Re all the above developments (save the right to manage consultation which has yet to happen), see the: Property key future developments tracker (a separate subscription may be required to view some content).

Brexit

As the UK prepares to withdraw from the EU in March 2019, Brexit will continue to be essential reading for all legal practitioners. A particular area of interest for Property practitioners is the potential impact Brexit could have on lease terminations. In the possible test case for the European Medicines Agency (EMA), the courts could be asked to rule if Brexit is a frustrating event. EMA entered into a lease in 2011 which runs until 2039 without an earlier break option. At the time of entering the lease, withdrawal from the EU was not anticipated. Whether this argument will succeed remains to be seen, although, as many commentators have pointed out, neither the plans to hold a referendum, nor its outcome could be said to have been totally unexpected. It is arguable therefore that having to move to another state for operational reasons could have been initially provided for in the lease, eg as a condition. See News Analyses: Lease terminations and the implications Brexit might have and Brexit—Lexis®PSL comments on key developments in 2018 and 2019.

 

Filed Under: Property

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