Trowers' property litigation weekly update
In this week's bulletin, the team considers the practical implications arising from the enactment of legislation banning ground rents and offers an update on the Product Security and Telecommunications Infrastructure Bill. Alongside this we have included our usual insights from around the firm as well as good news stories and weekly quiz.
Ground rent ban enacted
The Leasehold Reform (Ground Rent) Act 2022 (the Act) banning ground rents in residential leases received royal assent on 8th February 2022, with the government publication stating it will come into force within 6 months.
The Act includes allowances for contracts for leases with ground rents entered prior to commencement to remain valid. Leases of multiple units are not caught by the Act, which will create an issue for developers and landlords purchasing headleases with a ground rent payable but potentially no way to recover those rents if the subleases are granted after the Act comes into force.
There will likely now be a scramble for contracts to be put in place prior to the Act coming into force, to enable the creation and recovery of ground rents, which will soon be a thing of the past.
The commencement of the ban will also see voluntary deals for new leases and lease extensions with a new or increased ground rent put under pressure to complete as soon as possible.
If you have any questions or would like to know more about the ground rent ban and legislation, please contact William Bethune.
Product Security and Telecommunications Infrastructure Bill - update
This Bill, which (among other things) proposes changes to the way in which operators can deal with installing and upgrading their equipment, continues to make its way through Parliament and is currently at the Committee stage where the various provisions are being examined and debated in detail.
Part 2 of the Bill proposes changes to an Electronic Telecommunications Code which is already weighted firmly in favour of operators. The proposed infrastructure updates follow that general theme and are being proposed to support the quick rollout of gigabit-capable broadband and 5G networks, simplify the process for renewals and optimise the use of existing infrastructure.
Some of the key changes are as follows:
- Meaning of "occupier" (ie. persons able to confer Code rights)
The definition has been widened further to include any person who exercises management or control over the land, or every person other than the operator whose interest would be prejudicially affected by the exercise of a Code right – so basically anyone!
- Rights to upgrade and share apparatus
The Bill proposes new rights for operators to automatically upgrade and share apparatus installed prior to introduction of the Code without the need for a new agreement.
- Renewal of business tenancies conferring Code rights
There are new provisions to ensure expired agreements are renewed consistently, and on similar terms to those for new agreements, allowing operators who already have apparatus installed under an expired agreement to either renew that agreement or request a new one.
- Unresponsive landowners
There are new provisions to enable operators to obtain Code rights over certain types of land quickly, in circumstances where a landowner does not respond to repeated requests. If the Bill is implemented, therefore, landowners will need to be wary of ignoring requests for site visits etc in the hope that the operator will not have an appetite for formal legal action and abandon plans for the site. Requests will need to be dealt with promptly, so that landowners have a say about any rights that are granted.
- Disputes and time limits for proceedings
The Bill proposes to add a specific requirement into the Code for operators to consider the use of Alternative Dispute Resolution rather than legal proceedings in cases where there are difficulties in agreeing terms, and also seeks to streamline the timetable for Court proceedings. Whether this will make any difference in practice remains to be seen, but any attempt to make the process (currently cumbersome and time consuming for all parties) more efficient has got to be a good thing!
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