Under the adverse possession regime for registered land contained in the Land Registration Act 2002 (LRA 2002), a squatter can apply to be registered as the proprietor of land if the squatter can prove that it (or a predecessor in title) has been in adverse possession for ten years ending on the date of the application (paragraph 1(1), Schedule 6, LRA 2002).

A registered proprietor that is served with notice of the squatter’s application can require the application to be dealt with under paragraph 5 of Schedule 6 to the LRA 2002. This means the application must be rejected unless the squatter can establish one of three conditions.

The third condition, contained in paragraph 5(4)(c) of Schedule 6, is that there has been a reasonable mistake regarding the boundaries. It requires the squatter (and any predecessor in title) to have reasonably believed that it owned the disputed land for at least ten years of the period of adverse possession ending on the date of the application.

The Court of Appeal held that in determining if the squatter’s belief is reasonable, it should not be imputed with an agent’s knowledge. For example, the squatter should not be imputed to have the knowledge of its solicitor, since the knowledge of a reasonably competent solicitor is not the issue.

In establishing if a belief is reasonable, it may be appropriate to ask if the squatter ought to have raised questions of its solicitor. However, if a squatter has enjoyed exclusive possession of land without any challenge, the answer might be that there is nothing to put it on notice of a need to raise any point with its solicitor.

Case: IAM Group plc v Chowdrey [2012] EWCA Civ 505 (15 March 2012)

On 16 April 2012, the Loan Market Association (LMA) published its new form of facility agreement for commercial real estate finance multi-property investment transactions.

The new facility agreement was prepared in response to demand from participants in the real estate finance market for a form of facility agreement along the lines of the LMA’s recommended forms of primary document for the investment grade and leveraged finance markets. It is designed for use in an investment finance transaction only, and not for financing the development of property.

In the user’s guide that accompanies the new facility agreement, the LMA emphasises that it must be tailored to the specific transaction structure and the parties’ commercial requirements.

The user’s guide sets out various assumptions on which the new facility agreement is based, including:

• A parent company forms subsidiaries to whom finance is provided for the acquisition of one or more properties.
• The parent and all subsidiaries are companies incorporated in England and Wales.
• All properties over which security is to be taken are located in England and Wales or Scotland, and all security is held by a security trustee on behalf of the beneficiaries.

The LMA says that, as far as possible, the new facility agreement has been based on the LMA’s existing recommended form of primary documents.

The new facility agreement and user’s guide are available to members of the LMA in the Documents & Guidelines section of the LMA website

The Court of Appeal has confirmed that an obligation on an airport operator to use best endeavours to promote an airline’s low-cost services gave rise to a more specific obligation on the airport operator to accept arrivals and departures of flights outside the airport’s opening hours.

Even though the contract did not say anything about operating hours, and even though the airport operator would make a loss as a result, such an approach to the best endeavours clause was supported by the pre-contract understandings of the parties.

Lewison LJ (dissenting) considered that the object of the best endeavours obligation was too vague to be enforceable.

(Jet2.com Ltd v Blackpool Airport Ltd [2012] EWCA Civ 417 (2 April 2012).)

On 30 March 2012, the European Commission published a draft delegated regulation which will amend the Prospectus Regulation (809/2004/EC). The draft delegated regulation includes proposals for:

• The format and content of the base prospectus and final terms.
• The format and content of prospectus and issue summaries.
• A proportionate disclosure regime which will apply to small and medium-sized enterprises and issuers with reduced market capitalisation.
• A proportionate disclosure regime which will apply to credit institutions issuing non-equity securities.

The draft delegated regulation reflects technical advice received from ESMA and will come into force on 1 July 2012

On 13 April 2012, the following delegated regulations and implementing decision were published in the Official Journal:

• Commission Delegated Regulation (EU) No 311/2012 of 21 December 2011 amending the Prospectus Regulation (809/2004), that implemented the Prospectus Directive (2003/71/EC) of the European Parliament and of the Council as regards elements related to prospectuses and advertisements. This deals with the expiry (on 31 December 2011) of the transitional period for which the Commission granted equivalence to Canada, South Korea, China and India in respect of their national GAAPs, to be treated as equivalent to IFRS as adopted by the EU. From 1 January 2012, third country issuers may present their historical financial information in accordance withthe GAAPs of Canada, South Korea and China, and the transitional equivalence status of India has been extended until 31 December 2014 to allow India to complete the process of adopting IFRS.
• Commission Delegated Regulation (EU) No 310/2012 of 21 December 2011 amending Regulation (EC) No 1569/2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to the Prospectus Directive (2003/71/EC) and the Transparency Directive (2004/109/EC) of the European Parliament and of the Council. This extends the period for accepting third country accounting standards until 31 December 2014 to cater for countries that are still working to adopt IFRS in their national systems and receive an equivalence status.
• Commission Implementing Decision of 11 April 2012 amending Decision 2008/961/EC on the use by third countries’ issuers of securities of certain third country’s national accounting standards and IFRS to prepare their consolidated financial statements, which extends the transitional equivalence status of India until 31 December 2014.

No changes have been made to the text of the delegated regulations as published on 29 December 2011

The Town and Country Planning (General Permitted Development) (Amendment)England) Order 2012 (SI 2012/748) (GPDAO) comes into force in England only on 6 April 2012.

The GPDAO amends Schedule 2 to the Town and Country Planning (General Permitted Development) Order 1995 (SI 1995/418) (GPDO 1995) in relation to permitted development rights for the installation of specific microgeneration equipment in England. Where permitted development rights apply, no planning application needs to be submitted.

The amendments include:

• In Parts 6 and 7 of Schedule 2 to the GPDO 1995,  clarifying that permitted development rights apply to buildings on forestry or agricultural land that house microgeneration equipment. It is of particular application to those buildings that house hydro turbines, biomass boilers and anaerobic digestion systems and store associated waste and fuel (provided that these are produced on the agricultural or forestry land by the boiler or system).
• Inserting a new Part 43 to Schedule 2 to the GPDO 1995 which introduces six new classes of permitted development rights for the installation of specific types of microgeneration equipment on or within the curtilage of buildings other than dwelling houses or blocks of flats that meet certain criteria:
• Solar panels (Class A);
• Stand alone solars (Class B);
• Ground source heat pumps (Class C);
• Water source heat pumps (Class D);
• Biomass heating system flues (Class E); and
• Combined heat and power system flues (Class F).

For more information about permitted development rights, please contact us at property@leedsday.co.uk

On 8 March 2012, the Flexible Tenancies (Review Procedures) Regulations 2012
(SI 2012/695) were laid before Parliament and will come into force on
1 April 2012.

Section 154 of the Localism Act 2011 introduced a new type of flexible tenancy
for social housing, allowing local authorities to grant tenancies with fixed
lengths (a minimum of two years).

When someone is offered a flexible tenancy they have the right to request a
review if they feel that the offer made to them does not accord with the
landlord’s policy on offering flexible tenancies. The Regulations set out the
procedures to be followed when a tenant or prospective tenant requests a
review.

The Regulations set out:

• What a review application must include and how
  it should be presented (Regulation 2).
• An applicant’s right to a hearing and how such
  reviews should be conducted at a hearing (Regulations 3 and 6).
• How reviews without a hearing should be
  conducted (Regulations 5).

On 12 March 2012, the Department for Communities and Local Government (DCLG)
published a summary of responses to its consultation on reinvigorating the
right to buy scheme together with details of its final plans for reform of the
scheme.

The response confirms that the government intends to implement its reforms
with effect from 2 April 2012 (subject to Parliamentary approval). The reforms
include:

• Increasing the discount cap to £75,000 (a
  £25,000 increase on the cap proposed in the consultation).
• Requiring that every home sold under the right
  to buy scheme is replaced on a one for one basis.
• Retaining and extending the period relevant when
  calculating the cost floor under section 131 of the Housing Act 1985 from 10 to
  15 years. Section 131 limits the right to buy discount to ensure that the
  purchase price of the property does not fall below what has been spent on
  building, buying, repairing or maintaining it over the relevant period of time.
• Giving local authorities more power to retain
  receipts from the sale of houses.

The DCLG has also published guidance for local authorities and a fact sheet
for lenders on its proposed reforms. It also intends to produce a set of
materials to support local authorities in communicating the changes to tenants,
which will include a template letter and a new “summary guide”.

The Local Government Association has responded to the announcement by
criticising the use of a universal cap as opposed to giving individual local
authorities the power to decide the level of cap required in their areas to
ensure that one for one replacement is viable.

On 12 March 2012, the government launched the NewBuy scheme. The scheme is intended to boost housing supply and provide access to mortgages for those who can afford mortgage repayments but do not have large savings. A potential buyer can apply to participate in the scheme if the following apply:

• The buyer has a deposit of between 5 and 10% of the sale price.
• The buyer is a UK citizen or has the right to remain indefinitely.
• The property is a new build property with a sale price not exceeding £500,000.
• The property will be the buyer’s primary home.

The scheme is not available for:

• Second homes or buy-to-let properties.
• Shared ownership or shared equity purchases.

The housebuilder must deposit 3.5% of the sale price into an indemnity fund, and the government will provide a guarantee of 5.5% of the sale price. If the property is repossessed and the lender cannot recover the full amount of its loan, it can draw on the indemnity fund in the first instance, and then on the government’s guarantee.

If you would liek to check whether you are eligible for this scheme, please email us at property@leedsday.co.uk

The London Assembly’s Planning and Housing Committee has published a report on residential leasehold service charges in London. Although the report notes that there is little immediate prospect of legislative reform, it makes recommendations for improving the way in which service charges are levied. In particular, the report recommends that by the end of 2012:

• The Leasehold Valuation Tribunal (LVT) should review its processes to ensure that leaseholders who conduct their own cases are not unfairly prejudiced.
• The LVT should make proposals for providing mediation or pre-application advice.
• The LVT should review how its rulings are enforced and whether there are suitable redress options for leaseholders if its decisions are not complied with.
• The government should review whether it is possible to make mediation a compulsory first step in the dispute resolution process.
• The government should review whether the existing right to manage (RTM) legislation is less effective for leaseholders in London than elsewhere. In London, there are large numbers of absentee flat owners, so it can be difficult to achieve the necessary percentage of residents to exercise the RTM right. In addition, the high proportion of mixed use developments in London means that the residential element is often below the required percentage.
• The Law Society should consider whether conveyancers should, as a matter of standard practice, provide prospective leaseholders with details of estimated service charges for the next five years, the previous three years’ service charges and any planned major works.

Source: Greater London Authority: Service charges in London (1 March 2012)