Commercial Property News

Property Highlights From 2012

At the start of the new year we look back on a few things we’ve learned from 2012…

Residential Leases

Several years ago we celebrated the introduction of the tenancy deposit scheme which offers protection to assured shorthold tenants who pay a deposit. Landlords are required to protect the deposit and to provide the tenant with certain information about that protection. Landlords were reminded of the implications of failing to comply with this requirement.

In the case of Ayunnuga v Swindells a tenant successfully counterclaimed in possession proceedings on the basis that, whilst the landlord had informed him that the deposit had been protected, he had failed to provide the necessary details. The tenant was awarded the return of his deposit and a penalty fee of three times the value of the deposit.

Last year’s case of Drysdale v Hedges explored the limits of a landlord’s duty to keep the property in repair. It was decided that all landlords who let dwelling-houses owe a duty to the tenant to keep the property in good repair but curiously, there is no such duty to make the property safe.

Commercial Leases

When times are tough, break clauses can be a welcome tool for struggling businesses. However, the last few years have seen a steady flow of cases which highlight the importance of ensuring that all break conditions are satisfied. Tenants have remained bound by their leases for failure to pay insurance rents or interest on late payment despite that fact that the payments were never demanded. The tenant in PCE Investors Ltd v Cancer Research UK suffered a similar fate when it paid rent up to the break date but failed to pay for the remainder of the quarter as specified by the lease. The Court did not uphold the tenant’s argument that the landlord failed to inform the tenant that the payment was unsatisfactory.

2012 also reminded tenants of the dangers of unauthorised assignments of leases granted on or after 1 January 1996. InEon UK plc v Gilesports Ltd the outgoing tenant remained liable under the lease even though the Landlord was aware of the assignment. Tenants are reminded to serve requests for consent on landlords at an early stage and should require assignees to make applications for registration where necessary to ensure legal title passes as intended.

The New Threat

Following the economic downturn professionals have come face to face with a new challenge: identify fraud. InGreenglade Estates Ltd v Chana the successful bidder of a property at auction was awarded damages for breach of warranty of authority against the auction house who accepted instructions from someone impersonating the owner. Further, a number of solicitors’ firms fell victim to mortgage fraud when fraudsters posed as a law firm acting for a seller convincing the solicitors acting for the lender to pay them a mortgage advance. The lender was able to recover the sum lost against the solicitors who had parted with the mortgage in breach of trust.

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