May 3, 2022
Our May 2022 summary of the latest developments in Property law and practice is as follows:
Overseas registration requirements
The Economic Crime (Transparency and Enforcement) Act 2022 received Royal Assent on 15 March 2022 and is awaiting commencement order. This legislation applies to any overseas entity (i.e. a legal entity that is governed by the law of a country or territory outside the United Kingdom) that owns property in the UK (if this was purchased after 1st January 1999 – earlier purchases are not captured). The Act requires the registration of the overseas entity along with the details of its beneficial owners on a register to be maintained at Companies House. The Act also makes amendments to rules relating to the unexplained wealth orders regime and the sanctions regime.
The Charities Act 2022 has received Royal Assent and makes a number of changes and updates to the rules affecting dispositions of charity land. Sections 117 to 121 of the Charities Act 2011 provided statutory restrictions on the ability of charitable trustees to freely dispose of land held in trust for the charity. The majority of charities encountered in property transactions are non-exempt charities and are therefore subject to the controls of the Charity Commission. The 2022 Act makes a number of changes and updates to these key provisions and charities will need to be aware of these requirements when disposing of or acquiring real estate.
Covid 19 Rents
The Commercial Rent (Coronavirus) Act 2022 received Royal Assent on 24 March 2022 and is now in force. The Act is in substantially the same form as the bill introduced into parliament and ringfences COVID-19 rent arrears, aiming to provide an arbitration back-stop for those cases where landlords and tenants cannot reach an agreement to compromise the tenant’s pandemic debt liability. It essentially provides a six-month breathing space from the date of Royal Assent during which a compromise agreement can be reached between landlords and tenants or binding arbitration can be invoked.
Pool Re, a Treasury-backed re-insurance company, was created in 1993 under the authority of the Reinsurance (Acts of Terrorism) Act 1993 to provide stop-gap fire and explosion cover where none was available. This means that insurers are able to access adequate and affordable reinsurance cover for terrorism losses. The scheme is subject to periodic strategic reviews and the Government has just confirmed that it has extended its unlimited guarantee of terrorism insurance for a further five years. It also seeks to reduce the overall scheme pricing through new risk modelling, using more detailed geographical data.
Following the withdrawal in January 2022 of the Government’s consolidated advice note and the publication of PAS 9980 (a new code of practice for fire risk appraisal of external wall construction and cladding in existing multistorey and multi-occupied residential buildings), Form EWS1 has been updated. Form EWS1 (External Wall System) was designed as a means of attempting to provide mortgage lenders with the comfort necessary to lend in the knowledge that the external wall system has been deemed by a competent professional not to present a fire risk. The 3rd version of the form was issued on 16 March 2022.