Obscure court case causing problems

A seemingly obscure case in the Court of Appeal is proving a headache for politicians and could be a problem for some residential landlords.

A seemingly obscure case in the Court of Appeal is proving a headache for politicians and could be a problem for some residential landlords.

The effect of the ‘Superstrike’ case, the name of one of the parties involved, could have far reaching effects for landlords who have had the same tenants in a property since before deposit protection legislation came into effect in April, 2007.

In Superstrike, what’s known as a Section 21 notice was served to evict the tenant but the move failed because the tenancy dated from January, 2007, and then continued in 2008 under what the appeal court determined was a separate statutory periodic tenancy.

The court ruled that this in effect created a new tenancy but the deposit had not been protected with a tenancy deposit scheme so the landlord was prohibited from obtaining the eviction order. However, politicians say this was not the outcome intended when legislation was drafted and they are now looking at how to correct the anomaly.

In the meantime, landlords who have not protected deposits need to do so using one of the approved schemes. They are obliged to serve the tenant with what’s called Prescribed Information and the scheme leaflet for the tenancy deposit organisation they use.

There are various options to overcome the situation and every landlord needs to be confident that they are in the right position individually with regard to deposit protection and also be aware that further court rulings or legislative amendments from Government could further affect their position.

 

For further information; ‘Likely Implications of Tenancy Deposit Protection Case Superstrike Ltd v Marino Rodrigues’, has been produced in collaboration between the industry bodies ALA, BPF, NALS, NLA, RLA RICS and UKALA.

I will happily point landlords in the right direction for the advice they need and in some instances may recommend that the deposit is returned to the Tenants prior to serving a Section 21 notice.

Lisa Simon, 
Partner
Head of Residential Lettings, Mayfair
T: 020 7493 0676
E: lisa.simon@carterjonas.co.uk

Positive growth in the farmhouse and country cottage markets

Two reports have recently been published by Carter Jonas’ research department on the farmhouse and country cottage markets. Both reports indicate there has been positive growth in these two markets in the six months to September 2013 which reflects the improving economic sentiment in the wider economy.

However, although the brighter economic prospects may be driving demand, it is probably the lack of supply of quality property coming on the market which is as an equally important factor pushing prices up. Carter Jonas reports the average notional price of a farmhouse now stands at £1.49 million and in the south west prices have risen by 3.9% since the spring with Somerset being highlighted as a notable “hot spot”.

But the key to achieving a successful sale is getting the price right at the outset according to Kit Harding, head of Carter Jonas’ South West Farm Agency team based in Wells.

Kit commented, “We have had a successful year selling farms and farmland throughout the South West, including here in Mid Somerset but in every instance realistic pricing remains a key factor when bringing a property to the market. Properties which achieve the best prices are those being released to the market with accurate guide prices which encourage competitive bidding which often leads to best and final closed bids from multiple parties, thereby maximising value to the vendor.”

As far as the country cottage market is concerned, although there has been growth nationally, prices in this area have remained stable. It is speculated that this is largely as a result of the stamp duty threshold at £500,000 which continues to hinder price growth for properties valued just under this level although once this threshold is breached values may well move upwards.

It is also interesting to note that the rate of growth in the prime Central London residential market has slowed in 2013, in part because of the potential threat of the introduction of a “Mansion Tax”. It is speculated that this slowdown may encourage the traditional migration of young families from London to the country, especially if they see the value of rural properties beginning to rise after a long period of stagnation. Consequently values in the farmhouse market in particular are forecast to rise by 7-10% in 2014 in areas such as mid-Somerset.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

New permitted development rights

Hot on the heals of the new permitted development rights which came in to force earlier this year the Department of Communities and Local Government have consulted on further proposed changes to the permitted development rights which could have a significant impact in the rural sector.

Before considering the changes that have been introduced and also those on which the government are consulting it is probably worth going back to basics to explain what permitted development rights are. As most people will be aware if you want to build a house or new office for example one would normally require planning consent and in the countryside in particular, carrying out such developments has often been difficult.

However, there are certain types of development that do not require planning consent such as minor extensions to houses or certain changes of use and these types of development are carefully defined and set out in “General Permitted Development Order” (GPDO). The right to carry out certain types of development under the GPDO are called “Permitted Development Rights” and it is the recent changes to these rights which may be of interest to farmers and other property owners.

The key changes which have already come in to force on 30th May this year which may impact on farmers in particular include:

• The permitted change of use from agricultural use to a whole variety of commercial uses including offices, shops, financial and professional services, restaurants, business and storage.

These new rules are not applicable to recently built farm buildings (first brought into use after 3rd July 2012 or later), buildings which have not been solely in agricultural use, Listed Buildings or where the change of use exceeds 500 sqm. There are also a number of conditions which apply, perhaps the most important of which is that if the area involved exceeds 150sqm the farmer will need to gain “prior approval” from the Local Planning Authority before enacting the change of use and the LPA have the right to refuse the application.

• The permitted change of use from offices to dwelling houses.

Again there are a number of conditions which apply. For example the building must be in office use immediately before 30th May 2013 (or last used as an office) and must be brought in to use as a house before 30th May 2016. Such change of use is also not applicable to listed buildings. For all such changes, “prior approval” from the Local Planning Authority will be required which can lead to a refusal of the application.

However, in addition to these two significant new rules the government are consulting on a number of additional potential permitted development rights including the change of use of existing buildings used for agricultural purposes of up to 150 sqm to change to residential use with up to three additional dwellings potentially allowable on farms.

It remains to be seen whether such a fundamental change will be allowed but what does seem certain is that at a government level, even if this may be resisted at the Local Planning Authority level, there is an increasing willingness to contemplate some forms of development even in the countryside which will present opportunities for some farmers and landowners.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Hot topic: Housing in rural areas

The provision of housing in rural areas in particular is always a controversial topic; landowners are often eager to see development on the edge of a village so they can profit from the development value of the land while neighbouring householders very often don’t want development “in their back yard”.

This can lead to prolonged and expensive planning applications and one of the tactics used by those protesting against development is to try to get the land which is the subject of the planning application allocated as a “Village Green”. Very many such applications appear to be spurious, but the cost of defending such a claim can be enormous and the claim may ultimately frustrate a development altogether.

However, this tactic has been recognised by government as not being in the wider public interest and they have amended the law accordingly. Thus under the Growth and Infrastructure Act 2013 landowners can now proactively protect their land prior to making a planning application so as to avoid a subsequent “Village Green” application.

The process involves the landowner depositing a statement and map with the commons registration authority (the County Council), effectively bringing to an end any period of use “as of right” for lawful sports and past times on the land to which the statement relates. The deposit of the statement will not prevent the start of a new period of recreational use as of right, but the landowner may deposit further statements to interrupt future periods of use.

This extends the protection which is already afforded to landowners in relation to linear public rights of way where a similar deposit can be made under the S31(6) of the Highways Act 1980 whereby the landowner can register those rights which exist so as to prevent new rights of way being inadvertently created.

So, if you are a landowner and wish to protect your land against a “Village Green” application or claim for a new public right of way it is suggested you should look in to depositing the appropriate statements and plans now because the relatively modest upfront cost of doing so could save you or your family a huge sum of money in the future.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

A con that can legally steal your house

It can happen. Section 58 of the Land Registration Act 2002 provides that if a person is listed as the proprietor of a legal estate with HM Land Registry it is conclusive evidence of ownership.

Imagine losing your house after it was effectively stolen because the law favours a third party.

Case law (Barclays Bank plc v Guy 2008) dictates that while the rightful owner can restore his or her name as owner, if the mortgage was granted through the lender relying on indisputable title, albeit one effectively stolen, the mortgage charge remains and must be repaid.

Worse still, if the house had been sold to a third party everything would be lost.

The case law involved a house where a tenant registered the title fraudulently and used it to obtain a mortgage from Barclays. The owner wanted complete ownership of his house returned but only managed to re-register the title. Barclays kept its charge on the property so the money would have to be repaid when the house was sold – unless the fraudster could be found with the money.

You can prevent becoming a victim by popping in the post a simple form ‘COG1’ (Up-dating Registered Owners’ contact address) with evidence of identity. It tells HM Land Registry to amend the record for your property to provide your current address for correspondence. You post the form with evidence of your identity and its job done.

For more information visit the Land Registry website

Lisa Simon, Partner
Head of Residential Lettings, Mayfair
T: 020 7493 0676
E: lisa.simon@carterjonas.co.uk

An HS2 update

HS2 - the rail infrastructure project which will provide direct, high capacity, high speed links between London, Birmingham, Leeds and Manchester. With the exception of London, these city destinations and the route of HS2 are nowhere near the eastern region.

Yet, apparently in furore and froth with which KPMG’s report was greeted by the media across a recent weekend after the BBC made its Freedom of Information (FoI) request, HS2 means we might lose out in the whole of Cambridgeshire to the tune of £253 million according to some local press reports and south Essex by £151 million. In Cambridge city alone, it could be as much as £127 million.

Further north but still in the east; in fact the UK’s most northerly eastern city, Aberdeen – dubbed Europe’s renewable energy capital – can expect a drop in economic output by £220 million because of HS2.

Really? I doubt businesses in the granite city are concerned as the city’s residential and commercial property markets are buzzing as the year draws to its close.

Those unfamiliar with the sophistry of accountancy have no reason to doubt the statistical robustness of the reported figures. It’s the linguistic rigour that’s bothersome. Because those cities, towns and locations were ‘set to lose’ ‘could lose out’ ‘potentially reaching losses’.

It’s bothersome because it’s just distracting and sensational. It’s doubtful that commercial interests considering investing in our region are not going to do so now because of the open publication of the KPMG report. But it is possible that HS2 deflects future investment from the eastern region to the Midlands and the North West.

Possible but unlikely.

It’s hard to argue that investment interests here already or those which will come to this region can find what they are looking for in Birmingham, Leeds or Manchester. If they could they’d be there already, surely? And if they do head west and north, others are sure to fill the void because success attracts and breeds further success.

I should’ve been upfront at the outset: my firm has been awarded a place on HS2 Ltd's framework agreement for professional services relating to land and property. But I have yet to be snubbed for this by peers and clients in the east of the country since the KPMG report went public and, with the round of year end social dos in the horizon, I anticipate as full a diary as ever.

Will Mooney MRICS
Partner
Commercial, Cambridge

The Common Agricultural Policy is yet again being reformed

As many readers may be aware the Common Agricultural Policy (CAP) is yet again being reformed. In theory the new regime should have come in to force on 1st January this year, but as with all things “European” nothing is straightforward when you need to get 27 member states to agree on anything, let alone a far reaching and complicated reform of the agricultural subsidy regime stretching from Finland in the North to Greece in the South and Portugal in the West to Bulgaria in the East.

However in June this year the EU Agriculture Ministers agreed the principles for the next reform package which is due to start on 1st January 2015. As a result the old regime has had to be rolled forward for 2013 and 2014, which in itself poses problems, while the detail concerning the new regime continues to be hammered out at both a European and member state level.

As you can imagine this is a fearfully complicated system but as part of this regime, our government, in the form of DEFRA has just published its consultation package for England. The government is inviting people to make their opinion known on a whole variety of issues and a couple of the most important questions I have identified are:

1. How much money should be diverted from direct payments for farmers (Pillar 1) to Rural Development funds (Pillar 2). The government favours 15% to be diverted from Pillar 1 to Pillar 2 which is the maximum allowed by the EU but now is your chance to make your view known.

2. Should we redistribute the Pillar 1 support to farmers in favour of upland farmers at the expense of lowland farmers. There appears to be a general under current of support for this proposal because only a relatively small reduction in payments to lowland farmers would make a significant difference to upland farmers. However, as most lowland livestock farmers still rely on subsidy payments to make a profit, unlike arable farmers, there may well be a difference of opinion on this matter within the lowland farming community – again now is your chance to voice your opinion.

Within the consultation paper the government has also made a number of important decisions, the most significant of which for farmers here in mid-Somerset is that the existing regime of entitlements will be rolled forward in to the new scheme.

"This is a very important point because farmers will not have to apply for new entitlements under the new system as they did when the current scheme was introduced in 2005. This application process caused a massive administrative headache which took years to sort out. The practical effect of this is that the introduction of the new Basic Payment Scheme (BPS) as it will be known, should be much more straightforward when it comes in to force in 2015. But, another side effect of this is that the capital value of existing “entitlements” is likely to rise to reflect the fact that they will now be around until at least 2020 rather than potentially being phased out at the end of 2014.

The timescales for the introduction of the CAP reform package are very tight indeed and as a result the government needs to report back to the EU on the latest consultation by 31st December this year so if you want to make your views known, now is your chance and so I suggest you download the DEFRA consultation document and get consulting.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk