English Real Estate 2019 Review

In this alert we look back at the last 12 months and pick out some of the legal highlights for English real estate. If you are also interested in legal developments in Scotland, please click here.

January 2019 - a new year and a new approach to the Landlord and Tenant Act 1954 (1954 Act)

Although decided in December 2018, the impact of the Supreme Court decision in S Franses Ltd v. The Cavendish Hotel (London) Ltd [2018] UKSC 62 only really began to sink in during early 2019. The court ruled that, in order to rely upon ground (f) of section 30(1) of the 1954 Act to oppose the grant of a new tenancy, a landlord has to show that it has a firm and settled intention to undertake works which is independent of the tenant's statutory claim for a new tenancy. So if a landlord would not intend to undertake the works if the tenant left voluntarily, then it will not satisfy ground (f).

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February 2019 - Brexit not enough to frustrate a lease

In February 2019 the High Court handed down its decision in Canary Wharf Limited v. European Medicines Agency [2019] EWHC 355 (Ch) confirming that Brexit did not frustrate (i.e. bring to a premature end) the lease in question. This case is likely to grow in significance now that it seems almost inevitable that the UK will leave the European Union at the end of this month. The decision provides some reassurance to landlords that it would be very difficult for tenants, particularly those with alienation provisions in their leases, to argue that Brexit will have the effect of frustrating their leases. As for the effect of Brexit on commercial real estate in 2020, the impact will be felt more in terms of the reaction of the market rather than significant legal changes to underlying property law, since this is largely domestic in origin.

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March 2019 - SDLT changes

For the majority of transactions with an effective date on or after 1 March 2019, the SDLT filing date was reduced in 2019. Whereas previously returns had to be submitted and tax paid within 30 days of the effective date, for the transactions affected by this change the deadline was reduced to 14 days. There was also some discussion in March 2019 of introducing a 1% SDLT surcharge on non-UK residents purchasing residential property in England - there was no mention of this in the recent Queen's Speech so we wait to see whether this will be pursued in 2020.

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April 2019 - new UK service charge...