The Practical Lawyer

The ‘registration gap’ continues to cause problems.

The RICS has published the proposed changes to its Code of Practice on service charges. The important change is that RICS members must act in accordance with eight core principles; the Code is no longer just advisory as to best practice (although it does contain broad ‘best practice recommendations’).

Two of the grounds on which L can oppose T’s application for a renewal lease are:

A sale and leaseback involves the sale of a property to a third-party investor for a lump payment, immediately after which the investor then leases the property back to the seller for an agreed period in return for the payment of rent. The seller therefore no longer owns the asset but can use it for business purposes.

A note from Eversheds Sutherlands notes some perceived changes in drafting approaches over the last decade or so:

Any rent review timescale must be strictly complied with. Moreover, even if there is no express time limit set out in the lease, the court may be willing to imply time limits for reasons of ‘business efficacy’ – with T then being able to serve a notice making time of the essence in respect of those implied (or even express) time limits. That much is well known.

Under the old Code, landowners had to give operators just 28 days’ notice if they wanted to terminate a Code agreement. The new Code requires much longer notice – operators must be given 18 months’ notice just to terminate the Code agreement. But, it is important to note that termination is not the same as removal, and landowners must serve a separate notice specifying a ‘reasonable’ period for removal of the apparatus.

One welcome change in the new Code is that it addresses the uncertainty about whether or not LTA 1954 applies to Code agreements. Now, it is made clear that LTA 1954 rights do not apply to Code agreements (ie an agreement which has as its ‘primary purpose’ the grant of rights under the Code). This will mean that landowners will no longer have to run two sets of proceedings in parallel (ie under LTA 1954 and under the old Code). Instead, only one statutory regime will apply.

As noted above, there will be no financial benefit for a landowner if a telecoms operator is exercising its new right to share the site with another telecoms operator. But, this is merely part of the overall approach of the Code, which seems anxious to minimise the financial benefits to landowners of providing sites to telecoms operators. Note, in particular, that compensation and consideration payable by telecoms operators to landowners will now be calculated by reference (merely) to the open market value of the land – from the perspective of the landowner only. The value of the site to the operator, which could be quite substantial if it is a strategically important site, is wholly disregarded!