Property Notepad - May 2012
1. Extent of a Right of Way
In a recent Court of Appeal case, Oliver and another v Symons and another (2012), Oliver had the benefit of a right of way over Symons' track which contained the following wording: "with or without motor vehicles and other agricultural machinery". Symons erected gates alongside the track which Oliver claimed prevented wider agricultural machinery from being able to use the track.
The Court rejected Oliver's claim and decided that the right of way was limited to the track's actual width, and so did not include the verges nor included any "swing space" which would allow agricultural machinery to swing over adjoining land when using the track. The extent of the right of way was to be interpreted by strict reference to the wording used in the grant and looking at the surrounding circumstances at the time of the grant in order to ascertain the parties' intentions.
In order for the right of way to have extended beyond the actual width of the track, clear evidence would have been required that this was necessary to achieve the parties' objectives at the time of the grant. The right's width could not be defined by reference to future machinery, and there was no evidence that agricultural machinery using the track before the right was granted would no longer be able to do so.
Prior case law had already established that there is no implied right to reasonable horizontal swing space, as this would impinge upon a landowner's right to use its own land up to the boundary of the track.
This case is relevant not only to those using agricultural machinery, but also to those using construction machinery where overhang, swing space or large turning circles may be required. The wording and scope of any rights of way should be examined carefully to ensure they are adequate, particularly if the land owner is likely to be resistant to any change or intensification of vehicular activity.
2. Late payment of rent - Tenants beware
It has long been the case that persistent late payment of rent gives landlords the opportunity to oppose renewal of business leases (on the basis of ground (b), section 30 (1) LTA 1954). If a landlord succeeds in opposing renewal on this ground, not only will the tenant lose its right to a new lease, but it will also forfeit any right to statutory compensation for non-renewal. The consequences are therefore potentially very significant, from a tenant's perspective.
The recent case of Aksu v Enfield LBC (2012) highlights this risk. The tenant had persistently failed to pay rent on time. On the basis of this failure, the landlord successfully opposed renewal of the lease. The tenant sought permission to appeal, and offered a guarantor for the renewal lease and also a rent deposit. However, the court found that the tenant could provide no good explanation for past delays in payment, and no evidence that such delays would not recur in the future. The security offered for future performance was irrelevant, as the landlord should not be put in the position of having to enforce third party security. Only the past behaviour of the tenant would be taken into account, and on this basis the tenant's request for permission to appeal failed.
Late payment of rent might sometimes be unavoidable. If this is so, tenants should take steps to protect themselves against "ground (b) opposition". It is always better to seek an agreement with the landlord, such as for monthly payments, or a rent deferral or other payment plan. The court has a discretion in deciding whether to uphold opposition to renewal under ground (b), and is much more likely to exercise this discretion in the tenant's favour where the reason for late payment has been discussed between the parties and a resolution has been agreed.
3. Flood insurance availability
In June 2013 the government's agreement with the Association of British Insurers regarding flood insurance will expire. The so-called ‘statement of principles' has, since 2000, aimed to ensure universal provision of flood insurance for domestic properties and the small business sector. As yet, no plans have been announced for the agreement to be renewed or replaced, meaning that after that date the position could revert to the open market, in which case it is widely anticipated that flood insurance availability will become a rarer and more expensive commodity, and not available in some higher risk areas. It has been estimated that 25% of properties in the UK are at risk of flooding.
British insurers had previously agreed to cover flood damage on the basis that the government would "reduce the annual probability of flooding each year for a substantial number of properties", with the expectation that by 2013 the number of high risk properties would be far fewer. However, the Environment Agency reports that due to its current level of funding, nearly 45% of flood defences were considered to only be in fair, poor or very poor condition.
The potential problems for uninsured property owners affected by flood damage are clear; many would face substantial or even unaffordable costs of repair, and the risk of uninsured damage is likely to be reflected in reduced capital values. For mortgage borrowers, being unable to obtain flood insurance could place them in breach of their mortgage terms. Mortgage lenders on the other hand might restrict lending in high flood risk areas.
Insurance policies which will include flood cover beyond June 2013 are now coming up for renewal. Those buying or leasing properties in flood risk areas, and those involved in arranging or renewing insurance, should check carefully whether flood damage insurance will remain covered.
4. Sunday trading during 2012 Olympics
The Sunday Trading Act 1994, which only applies to England and Wales, limits the Sunday opening hours of large shops (over 280 square metres or 3,000 square feet of relevant floor area) to six continuous hours between 10am and 6pm on a Sunday. Small shops are not subject to these restrictions.
The Sunday Trading (London Olympic Games and Paralympic Games) Bill received Royal Assent on 1 May 2012. The resulting Act will suspend restrictions on Sunday trading hours in England and Wales between 22 July and 9 September 2012 for the duration of the London Olympic and Paralympic Games.
During this period, shops with a floor space of more than 280 square metres will have no restrictions on Sunday opening hours. However, the restrictions on loading and unloading on Sunday mornings will continue to apply.
The government has stressed that the suspension is a temporary measure and not a test case for a future permanent relaxation of Sunday trading rules.
This Notepad is offered on the basis that it is a general guide only and not
a substitute for legal advice. Laytons cannot accept any responsibility for
any liabilities of any kind incurred in reliance on this Notepad
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