#13595 - Title And Development Issues - Advanced Commercial Property

1 – ACQUISITION – TITLE AND DEVELOPMENT ISSUES

TITLE ISSUES

Restrictive Covenants

• Past breaches – Permission for breach? If not, does Seller have restrictive covenant insurance? If not, make a condition of the contract to obtain prior to completion.

• Future breaches – buyer should consider obtaining restrictive covenant insurance –but could be expensive – Or approach PWB (person with benefit of covenant) for consent.

Positive Covenants

• Positive Covenants do not automatically bind the land. However, an entry in the Proprietorship Register will notify successive owners of the covenant(s). By virtue of SCPC 6.4.4, it is likely that the buyer be required to enter into a similar indemnity covenant to observe and perform the covenant(s). ADVICE – buyer likely to be bound.

Rights burdening the land

• Reserving a benefit over the land – ACTION/ ADVICE – Find out who owns the land and negotiate a deed of release.

• Third Party rights over the land – ACTION/ ADVICE – Find out who has the benefit of this right? Has it been exercised? Consider approaching for release of rights – time/ cost implications.

Charges/ other

• Lease – Do security of tenure provisions apply to the land ADVICE – tenant may have a right to remain in tenure / apply for new lease – ACTION – serve a s.25 notice, citing grounds of opposition – development s.30(1)(f) LTA 1954 – non-fault ground – compensation will be payable to the lessee s.37(1C) LTA 1954 .

• Pre-emption agreement – Implications for seller – it if is still in force, the seller must offer the land to another party first – ADVICE/ ACTION – Request copy of agreement/ confirm it is no longer enforceable and ensure that the seller removes notice of it from the register.

• Mortgage – ADVICE/ ACTION – Obtain confirmation from the seller’s solicitors that this will be discharged on completion.

DEVELOPMENT ISSUES

Rights to light

• Can be granted expressly (deed), OR by prescription.

• Prescription – Right obtained following 20 years of continuous use – Can be prevented by interrupting the flow of light. ACTION – Developer should serve LON (Light Obstruction Notice) and register as a land charge – The LON must remain in place for one full year to prevent the right arising. Once right has been acquired, the owner of the right may object to service LON. In these circumstances it should still be serve a LON – the owner may not object – If the LON is left in place for a year, the right will be extinguished.

• Developer should deal with any outstanding light issues prior to commencing development works – Case law – the court may grant an injunction to have the building Regan v Paul Properties. However, recent case law – court may adopt a more discretionary approach – awarding damages to the injured party (based on loss of amenity/ diminution in value of property) Coventry v Lawrence (2014) – unless developer has acted underhand.

• ADVICE OPTIONS –(1) Negotiate a deed of release with owner/ (2) Redesign the development/ (3) Obtain right to light indemnity insurance (note, this could be costly)/ (4) Acquire the neighbouring property with the right to light/ (5) Approach local authority to exercise its statutory powers under s.237 TCPA (Town, Country and Planning Act), removing possibility of injunction being imposed.

Construction traffic –Reconfiguration of Roads

• The public has a right to use any public highways – Public highways are created by statute (adoption pursuant to s.38 Highways Act) or by dedication, i.e. 20 years continuous use without interruption. ISSUE – Development site may contain a public highway that needs to be stopped up/ diverted to accommodate planned development?

• ACTION/ ADVICE – Check CON29R – are the roads publicly adopted highways? If YES – the public has a right to use any public highway. The client will not be able to re-configure the road unless a stopping up order is obtained – To obtain a stopping up order, statutory procedures under s.116 HA or Part X TCPA must be followed, both of which are timely and costly. There is also the potential that objections will be raised, further delaying the process. If a stopping up order is required, the contract should be made conditional on the order being obtained.

• Advise the client that if they do not want the road to become a publicly adopted highway, it must ensure that it is not inadvertently dedicated as a highway (putting up signs stating no intention for the road to be a public highway).

• NOTE, If the roads are not public highways, there are prima facie no issues. If the developer wants the roads to be adopted, it can enter into a s.38 agreement with the local authority.

Adverse Possession – Unregistered/ Registered Land

• When a person has been in occupation of land for a certain length of time, they may be entitled to the land by claiming adverse possession. They must be in factual possession of the land and the possession must be ‘adverse’ (possession adverse to the rights of the owner).

Unregistered land

• 12 years uninterrupted use – the land registry will then register AP (Adverse possessor) with with possessory title (unless the registered proprietor has consented) – after another 12 years, this will be upgraded to absolute title, provided the AP is still in occupation of the land.

Registered Land

• AP can apply to the LR after 10 years – The LR will notify the registered proprietor and any mortgagee and they then have 3 months to oppose the application. If there is no opposition, the AP will be registered as registered proprietor.

• If there is opposition, then the application will be rejected unless It can be shown that: (1) there is some form of proprietary estoppel (2) AP is otherwise entitled to the land (3) mistaken belief about boundary demarcation.

• If the application is opposed, but the AP remains in occupation, then two years after the date of the first application the AP may apply again for registration and must be registered as proprietor of the land.

ADVICE – Conduct a SIM search to find out registered or unregistered land (different rules) – Either request that the seller applies for AP OR ensure that buyer receives a statutory declaration from the seller stating the extent of the land and confirming the time period over which the AP has taken place – make conditions of contract.

Airspace Issues – Oversail Crane Licences

• Landowner’s retain control of their airspace to a height necessary for ordinary use and enjoyment of the land (Bernstein v Skyviews & General Limited).

• Ownership of airspace may be asserted through an action in nuisance or trespass – no need to prove loss in trespass – potential injunction to stop use.

• Jib of crane swinging over adjoining land – Developer will be required to obtain a crane oversail licence – this can be negotiated prior to starting the works.

Vacant possession (squatters)

• The remedies available to owners of commercial property in relation are fairly limited; (1) Negotiate with squatters/ (2) Regain possession by seeking an emergency interim possession order (complex/costly/time)/ (3) Obtain a possession order under CPR 55 – Submit application, supported by witness statement – serve personally on squatters (nail to the entrance of squat or hand to an adult squatter) – Once the court order is obtained, bailiffs will remove the squatters.

• Squatting in residential property is a criminal offence.

SDLT –...