Commercial Property e-Brief – Property: What to expect in 2015

With spring hopefully around the corner, we consider three things to look out for this year.

BREAK CLAUSES AND REIMBURSEMENT

Tenants should get some clarity as to whether they can recover rent paid for periods after a break has been exercised even if the lease does not specifically provide for this. This will follow a decision of the Court of Appeal which is due shortly.

In this case the tenant, Marks and Spencer, exercised a break option in its lease and claimed a refund of rents paid for the period following the break date. As the lease did not expressly permit this, the landlord refused to refund these rents.

Regardless of the upcoming decision, we would always advise tenants to ensure that a lease provides for the refund of rents following the exercise of a break. The loss to a tenant can be significant particularly if a break date falls just after a payment date.

ENERGY EFFICIENCY

This year, regulations are due to be published which will provide more detail of the implications of the Energy Act 2011 for landlords and tenants. The key point for landlords to remember is that properties will not be able to be let after 1 April 2018 unless they have an EPC rating of E or above. You can find out more about this by reading our previous e-brief (link below).

Commercial Property e-Brief – It’s not easy being green

When the regulations are published, we will provide a further update.

RIGHTS TO LIGHT

A report on rights to light was published by the Law Commission at the end of 2014 and a response from the government is expected in 2015. A “right to light” is an easement giving a landowner the right to receive light to buildings on their land. A neighbour cannot substantially interfere with this right without the consent of the benefitting landowner.

The Commission recognises the need to strike a balance between:

(a) a reform of the law to deal with the delays suffered by developers due to the threat of injunctions for breaches of landowner’s rights to light; and

(b) the rights of existing buildings to maintain access to natural light. The Commission made the following key recommendations:

(i) a statutory notice procedure should be introduced allowing developers to require adjoining landowners to inform them if they intend to seek an injunction to protect their rights to light.

(ii) more certainty as to when courts will order damages to be paid for a loss of rights to light, rather than granting injunctions which halt developments; and

(iii) that the law be amended so that unused rights to light are treated as abandoned.

We would welcome further clarity in this area and look forward to the government’s response to these recommendations.

For further information on any of the above changes, please contact any member of the commercial property team.