Supreme Court rules on the correct interpretation of the phrase “relevant policies for the supply of housing”

Author: Charlotte Dyer, Senior Associate, Planning, London

On 10 May 2017, the Supreme Court handed down its eagerly anticipated judgment in respect of two housing appeals against decisions made by Suffolk Coastal District Council and Cheshire East Borough Council.  The case centered on the appropriate interpretation of paragraphs 14 and 49 of the National Planning Policy Framework (NPPF).  Both appeals had been brought on the ground that the decision-maker in each case had misunderstood the key NPPF phrase "relevant policies for the supply of housing". 

This is not the first time that this had been the subject of judicial consideration.  On seven separate occasions between October 2013 and April 2015, the Administrative Court ruled on this, with little consistency between the judgments.  One expects that the Supreme Court judges were rather pleased that they would finally get to have their say on this when these appeals finally landed on their desks.  Indeed Lord Carnwath explained at the very beginning of his judgment that this was an issue of "controversy" in respect of which the court had been urged "to bring much needed clarity to the meaning of the policy".  Below I will explain the judgment and consider its wide ranging implications.

1. What does the NPPF say?

2. How had this been interpreted previously?

3. How did the Supreme Court interpret this?

4. What else did the Supreme Court say?

5. Conclusions

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An unusual consequence of the housing crisis – or, when is it against public policy to enforce a hospice’s privacy?

Author: Jerome Temme, Trainee, Real Estate Dispute Resolution, London

Take a hospice, a restrictive covenant preventing development next door which, at the time of the development, served to protect the privacy of the sick children, their families and visitors, and a developer in knowing breach of that restrictive covenant. Usually, parties acting in deliberate breach of their obligations will not find favour in the courts. Yet, in the recent case of Millgate Developments and another v Smith and another [2016] UKUT 515 (LC) a Tribunal used its discretion to modify the restrictive covenants and effectively let the developer keep its building up. So what made the difference in this case?

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Election ‘purdah’ is no excuse for non-publication of revised air quality plan

Author: Julie Vaughan, Senior Associate, Environment, London

Yesterday, a spokesman for the Prime Minister announced that the Government won't be pursuing an appeal to the High Court's decision of 27 April 2017, in which the Government failed in its attempt to delay publication for consultation of its revised air quality plan until after the 8 June 'snap' general election. Yesterday's announcement confirmed that the Government will meet the new 9 May deadline. The saga is an interesting example of what may post-Brexit become the only available route to hold the Government legally to account for compliance with national level obligations, once the threat of legal proceedings before the European Court of Justice is removed.

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Raise your (MEES) standards: new government guidance provides clarity and confusion

Author: Deborah Caldwell, Professional Support Lawyer, Real Estate, London

 

In February 2015, we reported on Regulations introduced by the Government to prohibit the letting of commercial properties in England and Wales rated F or G on their Energy Performance Certificates ("EPC"s) (see our blog post here). With some exceptions, these Regulations, known as the Minimum Energy Efficiency Standard ("MEES"), affect the majority of commercial leases. The Regulations will come into force from 1 April 2018 for new leases (including lease renewals) and 1 April 2023 for all leases. "Sub-standard properties" is the new label that will attach to properties with an energy efficiency rating below E.

What's new?

There are two recent developments for landlords to be aware of:

  • Government guidance on the MEES Regulations has recently been published; and
  • The opening date for the centralised self-certification register known as the PRS Exemptions Register ("PER") has been delayed.

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The limits of good faith

Author: Michael Mendelblat, Professional Support Lawyer, Construction and Engineering, London

 

The NEC Form of Contract is now in wide use in construction projects. The first clause says that the parties "shall act as stated in this contract and in a spirit of mutual trust and co-operation", often referred to as "good faith". What this means in practice is a question of importance for the development industry, both in relation to this particular contract and to the numerous other standard form or bespoke arrangements where "good faith" obligations are included.

 

The extent of the good faith obligation was considered in a recent case, Costain v Tarmac. Here the Court was not prepared to allow a contractor to escape the effect of an express time bar clause by relying on the duty of good faith as imposing a positive obligation to point out its effect. The court commented that the express duty in this case said little more than was previously thought to be implied into all construction contracts in terms of a duty to co-operate. So, whilst a good faith obligation prohibits unreasonable conduct which is without regard to the interests of the other party, it does not, it would appear, extend to informing the other party about the adverse effect of a particular term of the contract of which it should already be aware.

 

Good faith clauses, therefore, do not prevent parties from relying on express terms of the contract. The effect is confined to a restraint on unreasonable conduct amounting to improper exploitation of the other party.

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Time to respond to the Housing White Paper

Author: Matthew White, Partner and Head of Planning, London

There is just over one month left to submit responses to the Government's Housing White Paper and Build to Rent consultations. Published on 7 February 2017, the consultation period closes for the Build to Rent consultation on 1 May 2017 and for the Housing White Paper on 2 May 2017. The outcome that the Government seeks from its proposals is an increase in the supply of appropriate housing in England to meet demand. It aims to achieve this by planning for the right homes in the right places, building homes faster and encouraging diversification of the housing market.

Those in the property industry are assessing whether and how to respond to the Government's proposals. Many summaries of the Housing White Paper and Build to Rent consultations have been produced by the property press and industry bodies for this purpose. We have produced our own analysis of the main issues that impact the clients we serve. Please get in touch if you would like help assessing how these consultation proposals affect you.

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Forfeiture traps for developer landlords

Author: Matthew Weal, Associate, Real Estate Dispute Resolution, London

What do you do if you acquire a site containing problem tenants who may consistently be in arrears of rent or in breach of covenants under their leases?  It is understandable in these circumstances that a developer, when becoming a landlord, may want to remove these tenants from the site and obtain vacant possession so as to attract better tenants and generate additional income. Often you hear developers wanting to avail themselves of the forfeiture clause in the lease as a panacea to this problem. However, unless carefully considered, the exercise of this draconian remedy can have some nasty pitfalls.

This is the subject of an e-bulletin we have just published, which discusses some of the issues which any developer landlord should bear in mind before attempting to go down the forfeiture route without first having sought legal advice.  If there is anything here you would like to discuss, please get in touch.

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Private Fund Limited Partnerships: the new real estate investment vehicle?

Author: Paul Chases, Senior Associate, Corporate Real Estate, London and Alex Wright, Associate, Corporate Real Estate, London

In an article published in Property Week on 2 March 2017, Paul Chases and Alex Wright of our corporate real estate team discuss the potential benefits for real estate investors of the proposed introduction of Private Fund Limited Partnerships ("PFLP"s), including greater flexibility and administrative costs savings. Following government consultation into modernising UK limited partnership law (previously reported here in August 2015), HM Treasury's recently published draft legislative reform order proposing the PFLP is expected to be brought into law this April.

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The changing cost of environmental claims

Authors: Andrew Lidbetter, Partner, London and Jasveer Randhawa, Of Counsel, London

 

In environmental (Aarhus Convention) claims, judges can now award costs that take into account the claimant's financial resources. As of 28 February 2017, judges in environmental judicial review claims and statutory challenges now have the ability to vary previously fixed costs caps or remove them altogether. This is due to changes to the Civil Procedure Rules governing environmental claims. It is worth noting that three non-governmental organisations, ClientEarth, Friends of the Earth and the RSPB, are challenging the new rules.

 

Herbert Smith Freehills has produced a bulletin setting out more detail on this, which can be found here.

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Sky’s the limit?

Author: Helena Thompson, Associate, Planning and Environment, London

Almost a month on, we have now all had a chance to consider what the Housing White Paper means for the future of housing. The planning team here at Herbert Smith Freehills have been asking ourselves – what do we each find most interesting about it? For me, it was the continued protection of the Green Belt and the proposals to build 'up' rather than 'out'. Before local planning authorities can amend Green Belt boundaries, they must first look at the use of brownfield and public sector land and denser building, as well as whether neighbouring authorities can help them out with their development requirements.

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