Property Litigation
There are serious concerns regarding the outlook for the Construction and Real Estate & Property Services sectors as critical financial distress jumped 33% and 25% respectively on Q4.
Building Safety Act What we saw in 2023 We were expecting to spend a lot of time this year advising in connection with the implications of the Building Safety Act and the various regulations which sit underneath it, and we did. As the Act remains in its infancy and it is taking time for claims to work through the courts, most of our work has been advisory.
2024 trends and insights As Regulations and associated deadlines begin to bite, we expect to see more and more BSA work over the next year. We anticipate further decisions from the Tribunal, hopefully adding some much needed clarity to the Act’s provisions.
Renters (Reform Bill) What we saw in 2023 The much-vaunted abolition of s.21 (no fault eviction) notices was high on the agenda for the Government this year and nobody at the start of 2023 foresaw Michael Gove’s recent announcement that the proposals were being shelved pending improvement of the court system. Whilst the reasoning was logical (the court system is in urgent need of modernisation to ensure it can cope with an ever-increasing case load) it was nonetheless surprising that this had not been considered earlier, resulting in a U-turn on such a major housing policy which will no doubt be pounced on in election year.
2024 trends and insights Labour have been very clear that they will ban s.21 notices on day one if elected. So, if the polls are to be believed, we could see a prompt resurrection of a s.21 ban next year. If so, Labour will have to come up with a solution to the court issue and decide on how much further, if at all, they are willing to go to strengthen tenants’ rights. To the extent this leads to a perceived further erosion of landlords’ rights, we may well see many private landlords withdrawing from the market: a potential issue for Labour given its promises on housing availability and affordability.
Leasehold Reform
What we saw in 2023 The Leasehold and Freehold Reform Bill was put forward in November. If implemented, it will lead to substantial reform on enfranchisement (including lease extensions), the right to manage, and service charges. Interestingly, the Bill does not include a ban on creating new leasehold houses, which was a key element of the King’s speech.
2024 trends and insights The Bill is expected to undergo significant modifications as it progresses through Parliament. Like the Renters (Reform) Bill, its trajectory could be influenced by a change in the governing party. Angela Rayner, the shadow Levelling Up, Housing, and Communities Secretary, has been outspoken about the necessity for urgent and substantial leasehold reform.
Insolvency What we saw in 2023 We predicted a high number of insolvencies, and this has, sadly, been borne out by reality with levels of insolvency reaching an all-time high, exceeding those recorded in 2009. This has, of course, had a significant knock-on effect on the property market, with transactions slowing. For foreign investors, however, the UK is still an attractive prospect and we have been working with our commercial and residential colleagues on a number of acquisitions involving overseas finance, a trend we suspect will continue.
2024 trends and insights It is tempting to predict more of the same. More insolvencies and associated litigation as commerce in the UK continues to struggle. A dip in inflation and associated interest rates may lead to increased lending which may well give the market a bit of a kick start, no doubt resulting in more transactions.
“Since the Debenhams and Regis / Supercuts litigation it has become significantly more difficult for tenants to run an insolvency process which protects their better assets from landlord forfeiture." Ben Rose, Partner Rose Realty
Commercial Development
What we saw in 2023 We anticipated an increased number of our clients may look to exit development contracts. While these contracts were favourable in better times, they are now less attractive due to the downturn in the market. This has been the case. We have advised a number of the firm's estate clients and private funds who are revisiting previous development agreements/option agreements seeking ways to terminate or negotiate variations to those agreements.
2024 trends and insights The market will dictate the extent to which developers’ reticence will continue and although there are signs of economic recovery, progress is likely to be slow. The continued strong performance and growth of e-commerce and the need for those businesses to have efficient supply chains is likely to see an increase in proposed logistics and industrial developments.
Landlord and Tenant Act 1954
What we saw in 2023 There has long been speculation about the role of this legislation in the modern commercial property context and whether it is still needed at all. The Law Commission report on the future of the 1954 Act has been much anticipated and we hoped we might see it published this year. The report (when it comes) will be of huge significance to the future of commercial property.
2024 trends and insights Publication of the report is now expected “as soon as possible in 2024” and proposals for reform (rather than abolition) are widely anticipated as the Commission grapples with the balance between tenant protection and the need for an open and competitive property market. We anticipate proposals for changes to the grounds of opposition such as ground (f) (redevelopment) which is arguably based on an outdated (and environmentally unfriendly) tendency to demolish and rebuild. We also expect the Commissioners to pay close attention to the grounds under which statutory compensation should be paid and the most appropriate forum for the determination of lease renewals following the long running FTT pilot scheme.
“The Law Commission appears to have resolved the existential question of whether security of tenure is here to stay and what remains is how to get landlords and tenants to use it, rather than contract out of the scheme. One radical, and simple, option is to remove the opt out altogether…” Evie Barden, Barrister Landmark Chambers
Property Litigation
Our property litigation team acts for clients across all of the firm's sectors resulting in a unique client base ranging from high-net-worth individuals and families, to privately-owned businesses, educational and not for profit organisations and financial institutions. The team regularly handles complex, valuable and high-profile disputes. We help our clients to navigate property disputes when they arise, providing high-quality bespoke advice. Our approach helps us to deliver tailored solutions to our clients’ issues and disputes when they arise.