Advanced Commercial Property
Advanced Commercial Property
Contents
1. Acquisition and development: Initial considerations
2. Planning and environmental issues
3. Contractual matters, satisfying contractual conditions & VAT
4. Construction
5. Agreements for lease in development transactions
6. Alterations
7. Repair, insurance and service charge
8. Rent review
9. Alienation
10. Property Management: surrender, lease, termination and LL and TT Default
11. Lease amendments
1
, Advanced Commercial Property
SGS1 – Acquisition and Development: Initial Considerations
Structure for development issues
● Use the official copy of the title as the starting point – go through it
register by register, bringing in other information
● Explain the incumbrance (identify benefitting and burdened land as
appropriate) and how it impacts the development for your client
● What additional info do you need from the seller?
● → What is your preliminary advice?
Report on title: Key issues of concern for the buyer
1. Title Issues ● Need to be sure of property details so check property register and
proprietorship register of the official copies
● Refer client to title plan and attach to report on title so they can be sure of the
exact extent of the property they are buying
● Check the following:
o Address
o Title no
o Class of title (Absolute → best class of title)
o Registered owner1
● Excepted Mines and Minerals
o Right of extraction may be retained by a third party
● Advice
o Search Index Map to establish identity of owner
o Ask seller if right exercised in the past
o Any interference with minerals (digging foundations etc) could lead to
a trespass claim: liability for damages and inunction to stop work
o → Buyer should carry out survey to establish scope and extent of any
mines/minerals
o → Could purchase rights from owner but this is expensive and time-
consuming
o → Obtain insurance (do not approach owner if doing this)
2. Restrictive • Run with the land therefore bind successors in title (SiT)
Covenants • Identifying issues when reviewing RCs:
o Any continuing past breaches (buyer will be liable)
o Proposed future breaches (buyer will be liable)
● Past breaches
o (1) RC Indemnity insurance
▪ The older the breach, the cheaper the premium
o (2) Retrospective consent
▪ Good be difficult to trace the PWB
o (3) Apply to the Upper Tribunal (Land Chamber)
▪ Application under s.84 LPA 1925 for discharge or
modification of RC
▪ Note: Time consuming and expensive, with no guarantee of
success
● Future breaches
o As above however note that insurance may be prohibitively
expensive
● Advice
o Seller to confirm what land benefits from any RCs if there is
ambiguity
o Ask seller if they have had any issues with RCs and have the rights
ever been exercised
o Find out when any covenants were breached and whether approvals
were obtained (e.g. if land is subject to a ‘no building’ RC and there
are buildings)
1
Make sure you use this information in your answer!
2
, Advanced Commercial Property
3. Positive covenants ● Do not run with the land therefore do not bind SiT
● However, if there is an indemnity covenant in the official copies, the S will
require the B to enter into one
● Also necessary because of SCPC 7.6.5
● Buyer will therefore have a continuing obligation to perform the PC
● Advice
o Compare PC in the schedule of RCs to the title plan (i.e. is the
location marked on the title plan)
o Check with seller that PCs have been complied with and if not see
seek compliance with them
4. Rights benefitting ● Right of way
third parties o Check the extent of the right of way (e.g. vehicles, at all times etc)
o Check who owns the right
o → If owned by Seller, request they enter into a deed of release in
respect of these rights
o → Seller may need temporary rights of access during works and/or
be granted new rights over the new roads once finished
● Right of Services
o Water, gas, electricity, oil etc
o Subject to benefitting landowner paying proportion for maintenance
and repair
o Can also enter Property to construct media for supply of services
● Advice:
o Seller’s solicitor to confirm who has the benefit of the rights
o Seller to confirm whether (to their knowledge) right exercised
o → Does the continued exercise of these rights affect the
development plans?
o → If so, consider getting a release from the benefitting landowner
(Note time and cost implications)
5. Leases ● Are there any leases and when are the due to expire?
● A lease may be contracted out of the LTA 1954 BUT if the TT is in occupation
and LL is accepting rent, it may have become a protected periodic tenancy
and therefore TT would have security of tenure
● If so, LL will need to serve s.25 notice to terminate the lease, relying on
ground (f) intention to redevelop.
● If expiry date has passed, this can be done immediately
● Note: ground (f) is a compensatory ground so will need to be factored in to the
development cost
● Advice:
o Ask LL whether TT still in occupation and take it from there
6. Charges/Other ● Pre-emption
o If still in force, S is obliged to offer to sell property to whoever is on
the register
● Advice
o Seller’s solicitors to provide copy of the agreement
o Seller’s solicitors to confirm that it is no longer enforceable
o → If not enforceable, notice of the agreement should be removed
from the register
● Mortgage
o Ask Seller’s solicitors to confirm this will be discharged on completion
Site visit: Key issues of concern for the buyer
1. Adverse possession ● Look at the sketch plan; Are there any physical gaps in the title? (Ransom
strip issue)
o E.g. If the roadway does not adjoin the boundary of the property (i.e.
is there a sliver of land between the two?)
o This sliver is known as a ransom strip
● → Compare sketch plan with title plan!
● → SIM search to establish if land reg’d/unreg’d
Unregistered
3
Advanced Commercial Property
Contents
1. Acquisition and development: Initial considerations
2. Planning and environmental issues
3. Contractual matters, satisfying contractual conditions & VAT
4. Construction
5. Agreements for lease in development transactions
6. Alterations
7. Repair, insurance and service charge
8. Rent review
9. Alienation
10. Property Management: surrender, lease, termination and LL and TT Default
11. Lease amendments
1
, Advanced Commercial Property
SGS1 – Acquisition and Development: Initial Considerations
Structure for development issues
● Use the official copy of the title as the starting point – go through it
register by register, bringing in other information
● Explain the incumbrance (identify benefitting and burdened land as
appropriate) and how it impacts the development for your client
● What additional info do you need from the seller?
● → What is your preliminary advice?
Report on title: Key issues of concern for the buyer
1. Title Issues ● Need to be sure of property details so check property register and
proprietorship register of the official copies
● Refer client to title plan and attach to report on title so they can be sure of the
exact extent of the property they are buying
● Check the following:
o Address
o Title no
o Class of title (Absolute → best class of title)
o Registered owner1
● Excepted Mines and Minerals
o Right of extraction may be retained by a third party
● Advice
o Search Index Map to establish identity of owner
o Ask seller if right exercised in the past
o Any interference with minerals (digging foundations etc) could lead to
a trespass claim: liability for damages and inunction to stop work
o → Buyer should carry out survey to establish scope and extent of any
mines/minerals
o → Could purchase rights from owner but this is expensive and time-
consuming
o → Obtain insurance (do not approach owner if doing this)
2. Restrictive • Run with the land therefore bind successors in title (SiT)
Covenants • Identifying issues when reviewing RCs:
o Any continuing past breaches (buyer will be liable)
o Proposed future breaches (buyer will be liable)
● Past breaches
o (1) RC Indemnity insurance
▪ The older the breach, the cheaper the premium
o (2) Retrospective consent
▪ Good be difficult to trace the PWB
o (3) Apply to the Upper Tribunal (Land Chamber)
▪ Application under s.84 LPA 1925 for discharge or
modification of RC
▪ Note: Time consuming and expensive, with no guarantee of
success
● Future breaches
o As above however note that insurance may be prohibitively
expensive
● Advice
o Seller to confirm what land benefits from any RCs if there is
ambiguity
o Ask seller if they have had any issues with RCs and have the rights
ever been exercised
o Find out when any covenants were breached and whether approvals
were obtained (e.g. if land is subject to a ‘no building’ RC and there
are buildings)
1
Make sure you use this information in your answer!
2
, Advanced Commercial Property
3. Positive covenants ● Do not run with the land therefore do not bind SiT
● However, if there is an indemnity covenant in the official copies, the S will
require the B to enter into one
● Also necessary because of SCPC 7.6.5
● Buyer will therefore have a continuing obligation to perform the PC
● Advice
o Compare PC in the schedule of RCs to the title plan (i.e. is the
location marked on the title plan)
o Check with seller that PCs have been complied with and if not see
seek compliance with them
4. Rights benefitting ● Right of way
third parties o Check the extent of the right of way (e.g. vehicles, at all times etc)
o Check who owns the right
o → If owned by Seller, request they enter into a deed of release in
respect of these rights
o → Seller may need temporary rights of access during works and/or
be granted new rights over the new roads once finished
● Right of Services
o Water, gas, electricity, oil etc
o Subject to benefitting landowner paying proportion for maintenance
and repair
o Can also enter Property to construct media for supply of services
● Advice:
o Seller’s solicitor to confirm who has the benefit of the rights
o Seller to confirm whether (to their knowledge) right exercised
o → Does the continued exercise of these rights affect the
development plans?
o → If so, consider getting a release from the benefitting landowner
(Note time and cost implications)
5. Leases ● Are there any leases and when are the due to expire?
● A lease may be contracted out of the LTA 1954 BUT if the TT is in occupation
and LL is accepting rent, it may have become a protected periodic tenancy
and therefore TT would have security of tenure
● If so, LL will need to serve s.25 notice to terminate the lease, relying on
ground (f) intention to redevelop.
● If expiry date has passed, this can be done immediately
● Note: ground (f) is a compensatory ground so will need to be factored in to the
development cost
● Advice:
o Ask LL whether TT still in occupation and take it from there
6. Charges/Other ● Pre-emption
o If still in force, S is obliged to offer to sell property to whoever is on
the register
● Advice
o Seller’s solicitors to provide copy of the agreement
o Seller’s solicitors to confirm that it is no longer enforceable
o → If not enforceable, notice of the agreement should be removed
from the register
● Mortgage
o Ask Seller’s solicitors to confirm this will be discharged on completion
Site visit: Key issues of concern for the buyer
1. Adverse possession ● Look at the sketch plan; Are there any physical gaps in the title? (Ransom
strip issue)
o E.g. If the roadway does not adjoin the boundary of the property (i.e.
is there a sliver of land between the two?)
o This sliver is known as a ransom strip
● → Compare sketch plan with title plan!
● → SIM search to establish if land reg’d/unreg’d
Unregistered
3
