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Real Estate Briefing May 2023

Real Estate Briefing May 2023


At the start of the 2023/24 financial year, we focus on 5 focal points of interest to the real estate sector: regulatory change, updates to real estate taxation, some proposed changes to the planning regime, ongoing reform to construction law and some caselaw reports from real estate disputes.

Real estate regulation

1.1 MEES changes from April 2023

The Minimum Energy Efficiency Standards regime ("MEES") was brought into effect by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.  Until 31 March 2023, the MEES rules required landlords granting a new lease of a commercial premises to produce an energy performance certificate ("EPC") for the property, showing a rating of E or above, unless they have registered an exemption.  Landlords are prohibited from granting a new lease of commercial properties with an EPC rating of F or G.

From 1 April 2023, it became unlawful for a landlord to continue to let a commercial property with an F or G rating unless (1) they have carried out all the cost-effective energy efficiency improvements prescribed for it in its EPC, and the EPC still shows a rating of F or G, or (2) one of the exemptions applies.

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What are the exemptions?

  • The seven-year payback test – This applies if the cost of the improvement works necessitated by MEES are not covered within seven years by the energy savings brought about as a result of the works.
  • Devaluation – This exemption applies where the landlord has obtained a report from a surveyor to the effect that carrying out the recommended energy-efficiency measures would reduce the market value of the premises by 5% or more.
  • Third-party consent – Landlords can register this exemption if the recommended energy efficiency improvements require the consent of a third-party (such as a superior landlord or a local planning authority) and they have used reasonable efforts but have been unable to obtain the necessary consents.
  • 6 month new owner exemption – On the purchase of a property rated F or G which is subject to existing tenancies, the purchaser can register a six-month exemption in order to carry out the energy-efficiency measures that are needed to bring the EPC rating to an E or above.

Following the Government's 2021 consultation, it is anticipated that the next step in the Government's plan to achieve net zero by 2050 is that all the minimum requirements for landlords letting commercial property will shift to C by 2027 and B by 2030. The real estate sector hoped that the Government would reduce uncertainty for commercial property owners by announcing the details of this trajectory on Green Day in March 2023, but the Powering Up Britain statement did not refer to this issue.

1.2 Overseas Entities regime update

The Register of Overseas Entities ("the Register") launched on 1 August 2022 and the transitional period ended on 31 January 2023.  As we described in our previous briefing, pursuant to the Economic Crime (Transparency and Enforcement) Act 2022, overseas entities which own a freehold or grant a lease of more than 7 years in England and Wales are obliged to register on the Register and thereby disclose their registrable beneficial owners. An Overseas Entities ID is issued upon successful registration. If they fail to do so, submit false or misleading information, and/or do not submit annual updates, they could incur criminal liabilities.  An overseas entity planning to acquire a qualifying interest in land (i.e. a freehold or a lease of more than 7 years) must register before applying to the Land Registry for registration as proprietor, and although a purchaser/tenant is not committing an offence by entering into a transaction with a non-compliant overseas entity, increasingly UK entities are unwilling to complete without sight of the Overseas Entities ID because they will in most cases, be unable to register their new property interest at HM Land Registry without it.

From 1 April 2023, regulation 30A(1) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 was widened to include the Overseas Entities Regime.  This means that regulated persons (such as lawyers, accountants and property agents) are required to report to Companies House any discrepancies between the information they hold about the beneficial owners of overseas entities (such as data gathered as part of their KYC processes) and the information recorded by Companies House on the Register.  The reporting requirement will be an ongoing duty, although it will only apply to "material discrepancies" defined as something that, by its nature, and having regard to all the circumstances, could be linked to money laundering or terrorist financing, or intended to conceal details of the customer's business. 

What sorts of discrepancies should professional advisers watch out for?

The sorts of discrepancies that could be within scope include:

  • a difference in name;
  • an incorrect entry for nature of control;
  • an incorrect entry for date of birth;
  • an incorrect entry for nationality;
  • an incorrect entry for correspondence address;
  • a missing entry for a registrable beneficial owner; and
  • an incorrect entry for the date when an individual became a registrable person.

1.3 Charities Act 2022 changes

At present, trustees of charities are subject to a number of restrictions when they sell, let or mortgage their land, including:

  • an obligation when selling land, or granting a lease for more than seven years, to obtain a detailed report from a surveyor which must include advice as to marketing the land and the value of the land;
  • a duty, when granting a lease for seven years or less, to obtain advice on the proposal from someone whom they reasonably believe has the ability and practical experience to provide them with competent advice;
  • a duty to give public notice of the proposed sale or lease (and consider any representations made in response within a specified timeframe) when selling or granting leases of land which is held for stipulated purposes, and the trustees do not intend to acquire replacement land;
  • an obligation, when granting a mortgage over land, to obtain advice on whether the loan is necessary to pursue the charity’s purposes, whether the terms of the loan are reasonable, and on the charity’s ability to repay the loan; and
  • the need to obtain the consent of the Charity Commission before they can sell or let land to “connected persons” as defined in section 118 of the Charities Act 2011.

Compliance with these requirements can lead to significant professional costs and can also delay land transactions. In 2017, the Law Commission published its report "Technical Issues in Charity Law" which made a number of recommendations to maximise the efficient use of charitable funds whilst ensuring proper safeguards for the public. The recommendations included giving charities more flexibility to obtain tailored advice when they sell land, and removing unnecessary administrative burdens.

This report culminated in the Charities Act 2022. Sections 17 to 23 of the Charities Act 2022 are expected to come into force this Spring. These will:

  • amend the current rules on charities disposing of land, to clarify when the statutory restrictions apply;
  • remove the automatic statutory requirement to advertise a proposed disposition; and
  • expand the category of advisers who can provide a charity with advice on disposals of charity land to include fellows of the National Association of Estate Agents and fellows of the Central Association of Agricultural Valuers.
Real estate tax update

2.1 Business rates revaluation

The most recent revaluation of business properties for business rates came into effect on 1 April 2023, based on property values as at 1 April 2021. It is 6 years since a revaluation took place, and this revaluation is in accordance with the Government's Review of the business rates system in 2021.

Various measures were announced in the Autumn Statement in November 2022 to reduce the burden of business rates which the Government says will provide targeted support worth £13.6 billion over the next 5 years, including:

  • freezing the business rate multiplier in 2023-24;
  • ensuring that transitional relief relating to next year's revaluations does not come at the expense of those whose property's rateable value decreases; and
  • extending and increasing Retail, Hospitality and Leisure Relief.

In addition, the Government has confirmed that the previously announced Improvement Relief (to ensure ratepayers do not see an increase in their rates for 12 months as a result of making qualifying improvements) will be introduced from April 2024 and will be available until 2028, at which point the Government will review the measure.

2.2 Capital allowances

In the March 2023 budget, the Chancellor announced full expensing of qualifying capital expenditure incurred in the next three years, with the intention of making this permanent afterwards. This means that 100% of any qualifying expenditure on main rate expenditure will be deductible in the year it is incurred, giving immediate relief in 25 pence in the pound. This is significantly more generous than the UK's previous system of capital allowances, which only allowed 18% of the expenditure to be deducted each year on a reducing balance basis, giving tax relief at 3.4p in the pound in the first year, and lower in following years, though gives similar relief to the "super deduction" which was available from 2021 to 2023. For "special rate" expenditure, a 50% first-year allowance will be available, with the balance being deducted at 6% a year on a writing down basis.

The Chancellor noted in the budget speech that this would give the UK the most generous capital expenditure relief regime in the G7 and the joint most generous regime across advanced economies in the world. It will cost the Exchequer £9 billion a year but the OBR expects it to increase investment in the UK by 3% a year.  As well as giving generous tax relief, this will significantly reduce compliance burdens in calculating capital allowances and maintaining sufficient records to establish their availability. You can read more about the Spring Budget here.

2.3 Further changes to the REIT rules and rules relating to charities

As part of the Government's ongoing review of UK fund structures, it has announced three changes to the rules relating to real estate investment trusts (REITs) to enhance their attractiveness and flexibility. First, as previously trailed as part of the Edinburgh Reforms in December last year, the requirement for a REIT to hold at least 3 properties will not apply if the REIT holds a single commercial property worth at least £20 million.

The general tax exemption for the sale of a property is turned off for a REIT who sells a property within 3 years of development work being undertaken. Currently, for the exemption to be disapplied the development work has to exceed 30% of the fair value of the property when it was acquired or when the company became a REIT. The second announced change, also previously trailed, is to allow REITs to use the market value at the time development commenced, which ensures that REITs are not penalised for properties that have grown significantly in value since they were acquired.

Thirdly, and unexpectedly, the Government also announced a welcome change to the withholding tax treatment of property income distributions (PIDs) from REITs when they are paid to partnerships. Currently, all partners in a partnership must qualify for a tax exemption from PIDs for that partnership to be able to be paid a PID without withholding. The announced change will enable the REIT to look through to the underlying partners in a REIT and withhold on the PID only to the extent the underlying partner would have had withholding had they invested directly. This will be particularly important for funds as, since 1 April 2022, it has been possible for widely-held funds to incorporate subsidiary "private REITs" that do not need to be listed on a stock exchange. Where those funds are themselves constituted as partnerships this change will ensure that the fund structure does not itself give rise to any UK tax leakage that would not have arisen had the ultimate investors invested in the real estate portfolio themselves.

In addition to the REIT-specific changes, the definition of "charity" for UK tax purposes will be amended to remove EU and other foreign charities, so that only UK charities will fall within that definition. Amongst its other effects this will have an impact on who can be counted as an "institutional investor" for the purposes of the REIT and the qualifying asset holding company (QAHC) rules, although there are saving provisions which exempt those who already hold shares in a REIT or QAHC on 15 March 2023.

The requirement for a REIT to hold at least 3 properties will not apply if the REIT holds a single commercial property worth at least £20 million.
Currently, for the exemption to be disapplied the development work has to exceed 30% of the fair value of the property when it was acquired or when the company became a REIT.


Planning update

3.1 Biodiversity

  1. Biodiversity net gain: The current policy in the National Planning Policy framework ("NPPF") and supporting planning practice guidance is that the planning system in England should provide biodiversity net gains where possible. It sets out a biodiversity mitigation hierarchy for local planning authorities ("LPAs") to consider when determining planning applications, which requires that significant harm to biodiversity should be firstly avoided, by locating the development on an alternative site with less harmful impacts; secondly, adequately mitigated; and finally, compensated, as a last resort.  If none of these can be achieved, the application should be refused.  The new Schedule 7A of the Town and  Country Planning Act ("TCPA") 1990 (which is not yet in force) set out a new general condition to all planning permissions granted in England, subject to exceptions. The condition requires a biodiversity gain plan to be submitted and approved by the LPA before development can lawfully commence.  The plan should contain an assessment of the value of natural habitats both before development and after development, and ensure that at least a 10% net gain is achieved either on site or offsite. Importantly, the 10% figure is a minimum – some LPAs will be seeking a higher percentage (in some cases double) in their emerging or adopted Local Plan policies.

    Enshrining the principle of biodiversity net gain within the planning system represents a significant step forward in recognising the need to mitigate the effects of new development on the natural environment. With the requirements kicking in in November 2023, there is a pressing need for meaningful engagement with LPAs to ensure that the condition can be met and that delays to the start of development are avoided. Third party approvals for pre-commencement condition requirements represent a real development risk and delays can prove costly.

  2. On 2 February 2023, Natural England published a new tool to help towns and cities turn greener. Aimed at LPAs and developers, the Green Infrastructure Framework aims to help increase the amount of green cover in urban residential areas. Delivering on a commitment first set out in the Government's 25 Year Environment Plan our briefing on which is here, the Framework highlights the importance of good quality Green Infrastructure. There is a focus on improving "health and wellbeing, air quality, nature recovery and resilience to and mitigation of climate change, along with addressing issues of social inequality and environmental decline". Traditionally, some developers may have resisted the provision of Green Infrastructure, focussing on costs and impact on viability. However, the Framework highlights a better understanding of the inherent benefits that flow from the provision of Green Infrastructure in developments, and the key role that it plays in creating healthy and sustainable new communities.

  3. Defra published the delayed Environmental Improvement Plan for England on 31 January 2023. This sets out a delivery plan for the Government's approach to halting and reversing the decline in nature over the next five years. However, most of the items on the plan are already required by existing legislation or are being developed under other policies.

  4. Defra published a short guidance note on 2 May 2023 advising developers as to what they can count towards their biodiversity net gain.  Essentially, if they are creating or enhancing habitat as part of a development, this could count towards its biodiversity net gain even if the habitat is required for the development in order to comply with a statutory obligation or policy (such as sustainable drainage); to provide river basin management plan mitigation and enhancement measures; or to provide mitigation or compensation for protected species or sites.  Off-site mitigation and compensation for protected sites and species may also count, provided that off-site units are legally secure for at least 30 years, and registered, but at least 10% of the biodiversity net gain should be provided through other activities, for example, on-site habitat creation and enhancement. Habitat creation or enhancements do not count if they are required for restocking conditions relating to a tree-felling licence, marine licensing, or remediation under the environmental damage regime. 


    These measures underline the Government's commitment to ensuring new development is sustainable and protects the environment. However, with so many new initiatives being introduced by a range of different bodies, the challenge will be ensuring that they complement one another and work in tandem with new development projects. For now, there is some scepticism with the Climate Change Committee recently warning of the inconsistent application of national planning policy, emerging policies for biodiversity net gain and management of green and blue space.

3.2 Travel planning

The Town and Country Planning (Development Management Procedure) (England) (Amendment) Order 2023 has been published, and amends the Town and Country Planning (Development Management Procedure) (England) Order 2015 (SI 2015/595) (DMPO 2015).  It adds Active Travel England as a statutory consultee for certain planning applications made on or after 1 June 2023, including those with more than 150 dwellings.  According to its website, Active Travel England will lead the delivery of the Government’s strategy and vision for creating a new golden age of walking and cycling where half of all journeys in towns and cities are walked and cycled by 2030.

Applicants should be mindful of the practical effect that the addition of a further statutory consultee may have on the determination timeframes for applications, and the need for early and meaningful engagement to elicit supportive responses. In particular, this will lead to increased scrutiny of proposed travel measures for new developments, and necessitate careful consideration, from the masterplanning stage, about how best to integrate sustainable travel solutions within the proposed scheme design. Measures proposed will need to effectively interact with surrounding sites where appropriate.

3.3 The Law Commission has announced that it is to review the compulsory purchase laws.

It has been generally agreed for some time that this area of planning law is in need of modernisation. The Law Commission carried out a project in this area in 2003/4  but its recommendations were not implemented in full.  This new project will involve a review of the current law on compulsory purchase, focussing on:

3.3.1 the procedures governing the acquisition of land through compulsory purchase orders; and

3.3.2 the system for assessing the compensation awarded to parties in relation to such acquisitions.

3.4 Proposed changes to the NPPF

The Government has published a consultation on the revised National Planning Policy Framework and its proposed approach for preparing National Development Management Policies. The consultation closed on 2 March 2023. One of the more controversial proposals is that local planning authorities with an up-to-date local plan will no longer need to continually show a deliverable five-year housing land supply.  We have a briefing on this consultation, in so far as it refers to retirement housing, here.

Changes of the nature proposed in the consultation were considered by the Government to be better framed as revisions to the NPPF, rather than being introduced through new legislation such as the Levelling Up and Regeneration Bill which is currently passing through Parliament. That may reflect a perception that the path towards introduction via national policy may be less perilous. However, elements of the proposals have provoked strong feelings from consultees. This is particularly true of the proposed housing land supply and plan-making changes, with many perceiving that these will exacerbate the housing crisis. As such, it will be interesting to see whether the proposed changes survive intact to form part of the revised NPPF that eventually emerges.

3.5 Infrastructure levy consultation

On 17th March, the Government published a new consultation into the design of a new infrastructure levy to be paid by developers to fund affordable housing and local facilities such as GP surgeries, transport links and schools. Its key features are as follows:

  • It will replace section 106 contributions for most developments;
  • The sum that developers will have to pay will be calculated once a project is complete, instead of when the scheme is given planning permission. This will make sure that councils benefit from increases in land value, which can be significant for large developments that take years to complete.
  • Planning authorities will be given powers to set rates themselves.
  • A portion of the levy will be passed directly to communities as a ‘neighbourhood share’ to fund their infrastructure priorities, and councils will be required to engage with communities to create an infrastructure delivery strategy.

The proposal is quite radical and represents a brave move by Government to tackle a complex issue. Sensibly, there is a recognition that such a significant overhaul will, inevitably, create some teething troubles as people grapple with its introduction. As a result, the Government will adopt a 'test and learn' approach (as opposed to 'trial and error'!) with a phased introduction over the course of a decade and a minority of LPAs being introduced to it initially.

The consultation will run for 12 weeks, closing on 9 June 2023, and the Government anticipates that it will consult further on proposed regulations, when the responses to this consultation have been fully considered. A link to the consultation is here.

3.6 The LPA's duty of care

In Primavera Associates Ltd v Hertsmere Borough Council [2022] EWHC 1240, the High Court held that:

  • the LPA did not have a duty of care to the developer in processing its application for planning permission. The purpose of the planning legislation was not to confer a private law benefit on an applicant, but to prevent it from carrying out development except in accordance with statutory controls;
  • the developer failed in its argument that the LPA's conduct amounted to an assumption of responsibility to exercise reasonable care. The planning officers did not provide any commercial or legal advice to the developer on which it had relied during its application process; and
  • although it is best practice to decide planning applications within 26 weeks, this is guidance rather than a statutory duty.  Therefore, applicants cannot use these time limits to impose deadlines on planning authorities, and an applicant who is unhappy with the progress of their application should appeal against its non-determination.  A right of appeal arises after eight weeks and the applicant has six months in which to exercise it.

This judgment is a useful reminder that a negligence claim by a developer against a local planning authority is unlikely to be successful.


Construction update

4.1 Building safety

The Building Safety Act 2022 received Royal Assent in April 2022. It impacts on the design and construction of all buildings, and the operation of higher-risk residential buildings. It establishes a new safety regime which will be overseen by a new Building Safety Regulator, and imposes safety-related duties that will apply throughout the whole lifecycle of a building. The key themes of the Act are as follows:

  • "Higher risk buildings" are given a higher level of statutory protection. This regime will impact on the design and construction of affected buildings, and safety provisions that related to their occupation. In England, a higher-risk building during design and construction is a building that is at least 18 metres in height or has at least 7 storeys and contains at least two residential units, or is a care home or hospital. In England, a higher-risk building during occupation is a building that is at least 18 metres in height or has at least 7 storeys and contains at least two residential units, and is not a care home, hospital, secure residential institution, hotel, or military accommodation.
  • There are mandatory requirements for competence of professionals involved in the building control process. This has resulted in the publication of 3 new Publicly Available Specifications (PAS 8671, PAS 8672 and PAS 8673) to establish core principles, terminology and requirements on competence thresholds for professionals. The Building Safety Regulator has carried out a number of consultations regarding the new standards for building control in England, which it will apply in carrying out its various functions.
  • The Act introduces the concept of "the golden thread of information" that dutyholders in relation to higher-risk buildings will be obliged to provide during the design and construction of the building, and which an accountable person will have to keep and maintain while it is occupied. According to the Policy Paper, "Building Regulations Advisory Committee: golden thread report, 21 July 2021", "the golden thread is both the information that allows you to understand a building and the steps needed to keep both the building and people safe, now and in the future". These requirements are not yet in force.
  • It provides for the establishment of the New Homes Ombudsman, which provides a free and independent service to consumers who have bought a new home and have concerns about the purchase process or defects that have arisen within the first two years of their ownership.
Enforcement powers take a number of forms:
  • The Act provides that failure to comply with a compliance notice or a stop notice is a criminal offence, with a maximum penalty of up to two years in prison and an unlimited fine.
  • The Act also extends the limitation periods for claims that relate to a residential unit and are made under the defective Premises Act 1972, section 38 of the Act, or against construction product manufacturers arising from breaches of the Construction Products Regulations. The Act extends the limitation period for claims under the DPA 1972 from six to 15 years prospectively for claims that accrue after the relevant sections of the BSA 2022 came into force, and from six to 30 years retrospectively for claims that accrued before the relevant section of the BSA 2022 came into force.
  • The Government has also taken steps to block non-compliant developers from the housing market by, for example, punishing those which do not sign the Building Safety Pledge and then the Developer Remediation Contract (see below).
  • It provides for a new Building Safety Levy that will be charged on developers when they apply for planning consent for residential buildings, for the purpose of meeting building safety expenditure. It is not yet in force but the Government held a consultation on its design and implementation which closed in February 2023.

4.2 Fire safety

There have been some recent changes to the fire safety regime. Our briefing in January 2023 focuses on the new Fire Safety (England) Regulations 2022, and there have also been some other amendments to the Regulatory Reform (Fire Safety) Order 2005 via the Fire Safety Act 2021, in particular making it clear that the regime applies to the structure, external walls (including cladding and balconies) and individual flat entrance doors between domestic premises and the common parts of a multi-occupied residential building. The Government's guidance is here.

4.3 Building Safety Pledge

The Government has published the final version of the contract it has been negotiating with developers who have signed its Building Safety Pledge, committing them to remediating unsafe buildings in England with which they are associated.  Once the deadline of 13th March 2023 passed, 11 developers were placed on a non-compliance list, the implications of which are that they would not be able to carry out any new developments.  Subsequently, at least one of those developers has entered into an amended version of the contract, recognising that their buildings have never had any cladding or fire safety issues.

What does the Developer Remediation Contract say?

The contract follows on from the Pledge that developers were obliged to sign in 2022, and contains the following developer covenants:

  • to take responsibility for all the necessary works required in order to remedy life-critical fire safety defects arising from the design and construction of buildings 11 metres and over in height that they developed or refurbished over the last 30 years in England;
  • to keep the residents living in affected buildings informed on their progress towards meeting this commitment; and
  • to reimburse taxpayers for the funds already laid out by the Government in remediating the affected buildings.

4.4 Collateral warranties

In the case of Abbey Healthcare (Mill Hill) v Simply Construct (UK), the Court of Appeal decided that collateral warranties could, depending on their precise wording, be construed as construction contracts which would mean that adjudication under the Construction Act will apply to disputes under the warranty.  This is a useful reminder of the benefit that collateral warranties provide.

Read more about the benefits of collateral warranties for building projects.

4.5 Force majeure

In MUR Shipping BV v RTI Ltd, the Court of Appeal held that a party's reasonable endeavours obligation to overcome a force majeure event required it to accept payment in a different currency to that specified in the contract.   Our briefing here  considers the case, which has clear application to the construction industry.

4.6 Liquidated damages

In Buckingham Group v Peel L&P Investments the High Court held that the LADs provisions in this contract were enforceable, despite the lack of clarity in the drafting. The decision confirms that the courts will be reluctant to find a provision of a contract void for uncertainty and that its preference shall be to try and find an interpretation that gives effect to the parties' intentions.

4.7 Recovering 'waking watch' costs

In Mulalley & Co. Limited v Martlet Homes Ltd the High Court held that under a construction contract the contractor was liable for both the remediation cost of defective cladding and for the 'waking watch' costs. This is the first High Court judgement on claims concerning fire safety issues following the Grenfell Tower fire in June 2017 and is a key decision for the housing sector which has seen significant costs incurred from 'waking watches' being used as preventative measures until dangerous cladding is removed.


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Property disputes update

5.1 Nuisance

There are two recent cases of interest examining aspects of the law on nuisance: 

  • In Fearn v Tate, the Supreme Court found that "intense visual intrusion" from the Tate's viewing gallery can amount to an actionable nuisance. The Court distinguished this case from "overlooking", meaning a situation where one property is capable of being seen from a neighbour's property, which was described as "a minor annoyance of a kind that neighbouring occupiers have to put up with under the rule of give and take, live and let live." By contrast, the Court described how in this case the Tate actively invites members of the public to visit and look out from the gallery in every direction, including at the claimants’ flats situated only 30 odd metres away, and permits and invites this activity to continue without interruption for the best part of the day every day of the week, with the predictable consequence that a very significant number of the roughly half a million people who visit the Tate’s viewing gallery each year peer into the claimants’ flats and take photographs of them. The court rejected reasonableness as a test for whether behaviour amounts to nuisance and confirmed that the criteria was whether the use being challenged was a common and ordinary use. Lords Sales and Kitchen dissented from this view. This remains an area for argument on the facts in nuisance claims and applies to private nuisance generally and not just intense visual intrusion. The matter of deciding on a remedy has been remitted to a first instance court.
  • In Davies v Bridgend, the Court of Appeal found that although pure economic loss alone was not a ground for a claim in private nuisance, where there is other nuisance such as the encroachment of knotweed onto neighbouring land, damages for diminution in value can be recovered. The judgment also means that the owner of the infected land was responsible for the residual diminution in value of the neighbour's land (due to perceived blight) even if the knotweed rhizomes had spread to the neighbour's land before the defendant was in breach of its duty. The breach was a continuing breach. This is good news for landowners whose property has been affected by nuisance emanating from neighbouring land, and reminds all landowners to be vigilant in checking that any potential nuisances originating from their own property are investigated and mitigated promptly.

5.2 Unjust enrichment

In Barton v Morris, the Supreme Court held that, although there was an oral agreement between Foxpace and Mr Barton under which Foxpace would pay Mr Barton £1.2 million if he introduced a purchaser for Nash House at a price of £6.5 million, when Mr Barton's purchaser bought it for £6 million, he was not entitled to any payment under the contract. He was entitled to a payment that the court regarded as reasonable of the service he provided, which was £437,000. This is a good reminder that the courts will not step in to interfere with the terms of a commercial agreement, even if the outcome appears unjust.

5.3 Service charges

There have been two recent cases regarding service charge disputes: Aviva Investors Ground Rent GP Ltd v Williams where the Supreme Court held that a service charge clause which required the tenant to pay service charge at a fixed percentage or a proportion to be reasonably determined by the landlord was valid, and Sara & Hossein v Blacks where the Supreme Court held that the service charge certificate is conclusive as to what is required to be paid by Blacks following certification, but payment of the certified sum does not preclude Blacks from later disputing liability for that payment. It is a ‘pay now, argue later’ regime!


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