The Chancellor of the Exchequer Rishi Sunak delivered the Autumn Budget for 2021 on 27 October 2021 and draft legislation was published on 4 November 2021 in the Finance Bill. The majority of the Budget announcement were focused on recovering the economy from COVID-19’s impact and preparing the UK marketplace to be competitive in a post Brexit world, with limited changes to the real estate sector.
Continue Reading Autumn Budget 2021: Real estate focused updates
The Pandora Papers confirmed how attractive the UK, especially London and the South East, is for foreign property investors. This post considers what foreign investors need to know about transparency and land ownership in England and Wales and what is on the horizon.
Close to 90% of land in England and Wales is registered at Her Majesty’s Land Registry, and transaction involving unregistered land will trigger a registration requirement. The title gives basic information about a parcel of land, including the name and address of the registered proprietor. Non-natural legal personalities such as companies, limited liability partnerships, and charities can own land, and of course there is no restriction on non-UK entities owning land.
Continue Reading The Pandora Papers: overseas investment set to become more transparent
The new month sees a partial re-instatement of the legislation permitting creditors to serve winding up petitions on companies. However, the UK Government has adopted a softly, softly approach; this is seen from the temporary increase in the amount that must be owed from the modest £750 to £10,000 and the requirement for creditors to seek proposals for payment from a debtor business, giving them 21 days for a response, before they can proceed with winding up action. The measures are said to protect small businesses as they seek to rebuild their stability.
Continue Reading Winding up petitions: a return to the old normal? Except for landlords
Landlords are increasingly frustrated with tenants who simply will not pay their rent and arrears. Whilst some tenants are genuinely suffering, there is a feeling that some are using Chancellor Sunak’s moratorium on forfeiture as a budget management tool.
The suspension of forfeiture, a vital weapon in any landlord’s arsenal, is due to end in March 2022 (see “UK Government issues policy statement on Commercial Rent Debts“); Commercial Rent Arrears Recovery (the “CRAR”) which is the mandatory form of distress introduced by statute should also end at the same time.
Continue Reading What action can a Landlord take against defaulting Tenants?
As previously reported (“Commercial property evictions ban extended until 25 March 2022“), on 24 June 2021 the UK Government extended the moratorium on landlords evicting commercial tenants for non-payment of rent during the pandemic under s82 of the Coronavirus Act 2020 until 25 March 2022. Similarly, the restriction on the Commercial Rent Arrears Recovery (CRAR), which prevents landlords seizing a tenant’s goods in lieu of rent unless the tenant has more than 554 days’ of rent arrears, was extended until 25 March 2022. The restriction on the serving of winding up petitions based on a statutory demand under the Corporate Insolvency and Governance Act 2020 was also extended until the 30 September 2021. Continue Reading UK Government issues policy statement on Commercial Rent Debts
The government has launched the Building Safety Bill, which sets out a new regulatory regime for high-rise residential and other in-scope buildings, based on Dame Judith Hackitt’s review, following the Grenfell tragedy. The Bill, which has had its first reading in the House of Commons, will, as currently drafted:
See building regulatory system and building safety bill.
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The Government has announced that new legislation will be introduced in this Parliamentary session to ring-fence outstanding commercial rent arrears built up by tenants due to the COVID-19 pandemic and to introduce measures to guide tenants and landlords to come to an agreement on how to deal with the money owed, either by waiving some of the total amount or agreeing a longer-term repayment plan. If agreement cannot be reached, the new legislation will put in place an arbitration process to make a formal award that will be legally binding and must be adhered to by both parties.
Until these new rules come into force the existing measures to protect commercial tenants from eviction will be extended from 30 June 2021 to 25 March 2022. The Government has also extended the restrictions on landlords using Commercial Rent Arrears Recovery (CRAR) to recover unpaid rent to 25 March 2022 as well, which increased the total number of days’ outstanding rent required for CRAR to be used to 544 days. Statutory demands and winding up petitions will also remain restricted for a further 3 months until September to protect tenants from enforcement action where their debts relate to the COVID-19 pandemic. The extensions will apply to all businesses, but the new measures introduced by legislation will only cover those businesses impacted by closures. This means that rent arrears accumulated before March 2020 and after the date when relevant restrictions on trading are lifted, will be actionable by landlords as soon as the tenant protections are lifted. There is no restriction introduced on landlords suing for rent arrears as a simple debt claim.
Continue Reading Commercial property evictions ban extended until 25 March 2022
The Government is consulting on the design of the new Residential Property Developer Tax, ahead of its inclusion in the 2021-22 Finance Bill. The tax is one of two revenue raising measures to help pay for the Government contribution to the costs of remediation of unsafe cladding.
As previously announced, the new tax is time-limited and is to apply to the largest residential property developers in relation to their income from UK residential development.
The consultation runs until 22 July 2021.
See residential property developer tax consultation.
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If you wish to receive periodic updates on this or other topics related to UK real estate, subscribe to our Real Estate Insights mailing list.
For any other legal questions related to UK real estate, please get in touch with your usual Mayer Brown contact or one of the blog editors.
Further to our update on the Government’s residential leasehold reforms, the Leasehold Reform (Ground Rent) Bill was introduced into the House of Lords on 12 May 2021. The bill seeks to fulfil one of the proposals set out in the Law Commission’s enfranchisement report and follows on from the Government’s press release made earlier this year, to tackle the inconsistency and ambiguity of ground rents for future residential leaseholders.
Continue Reading Leasehold Reform (Ground Rent) Bill published
The COVID-19 pandemic and its consequences have had a turbulent effect on the retail, leisure and hospitality sectors in the UK. Government regulations in response to the pandemic have required tenants to close their premises to the public for long periods of time, causing profits to plummet, whilst landlords have been faced with rent ceasing to be paid and few remedies remaining available to them due to Government restrictions prohibiting leases being brought to an end by forfeiture for non-payment of rent and preventing the use of statutory demands and winding up petitions based on non-payment of rent until summer 2021.
There has been particular dispute and discussion as to upon whom (landlords, tenants and/or insurers) the burden of the financial detriment caused by the pandemic should fall. For this reason, the recent judgment in Bank of New York Mellon (International) Ltd v Cine-UK Ltd and others [2021] EWHC 1013 (QB) is important as it tackles head-on the thorny issue as to whether rent remains due and payable by tenants of commercial premises in spite of the circumstances of the pandemic.
Continue Reading Commercial rent arrears payable despite COVID-19 pandemic