HomeInsightsCommercial Property Law – Key Considerations (March 2024)

Our March 2024 summary of the latest developments in Property law and practice is as follows:

The Environment Act 2021 (Commencement No. 8 and Transitional Provisions) Regulations 2024, effective as of 12 February 2024, mark a significant step in the implementation of biodiversity net gain requirements for new development in England. This approach, outlined in schedule 7A of the Town and Country Planning Act 1990 (inserted by schedule 14 of the Environment Act 2021), aims to ensure that development projects leave the biodiversity of a site in a better state than before. While biodiversity net gain has previously been considered as a material planning consideration, it will now be a mandatory planning condition for all future development projects in England, subject to some exceptions.

Under these regulations, planning permission for new development will be contingent upon the formal approval by the local planning authority of a “biodiversity gain plan” for the site. This plan must demonstrate a minimum 10% biodiversity gain, which must be maintained for at least 30 years. However, the regulations include exemptions for certain types of developments, such as non-major development until 2 April 2024, householder development, self-build and custom housebuilding development, and those connected with high-speed rail.

Further statutory instruments outline the framework for implementation, including exemptions, definitions of irreplaceable habitat, amendments to planning regulations, establishment of a biodiversity gain site register, and provisions for penalties and fees.

Part 11 of the Levelling-up and Regeneration Act 2023 outlines the Government’s authority to demand disclosure of “information” regarding land ownership and control for specified permitted purposes. One such purpose is the identification of individuals holding “relevant contractual rights” in land.

The Department for Levelling Up, Housing & Communities has released a consultation paper concerning contractual controls on land. This paper seeks feedback on proposals to gather and disclose information regarding option agreements, pre-emption agreements, conditional contracts, and land promotion agreements (excluding restrictive covenants or overage agreements). Additionally, the consultation paper addresses methods for obtaining such information, obligations to update information, and penalties for non-compliance. The consultation period runs until 20 March 2024.

A question arising at present under the Building Safety Act 2022 involves how to check whether a building classified as a higher-risk building has been registered with the Building Safety Regulator.

In England, higher-risk buildings are those that are either 18 metres or taller, or have at least seven storeys, and contain a minimum of two residential units (for the purposes of Part 4 of the Act, which addresses the management of building safety risks in occupied higher-risk buildings). According to section 78 of the Building Safety Act 2022, higher-risk buildings in England are required to be registered with the Building Safety Regulator. The responsibility for this lies with the Principal Accountable Person for the building. For existing buildings as of 30 September 2023, failure to register by that date while the building is occupied constitutes an offence. Additionally, new buildings completed on or after 1 October 2023 must have a relevant completion certificate or final notice before any relevant residential unit is occupied.

Section 78(2) of the Building Safety Act 2022 requires that the Building Safety Regulator publish a register of such buildings “in such way as it considers appropriate.” Regulation 3 of the Building Safety (Registration of Higher-Risk Buildings and Review of Decisions) (England) Regulations 2023 (SI 2023/315) outlines the necessary content for such a register. As of now, no register exists. However, the Building Safety Regulator Strategic Plan 2023-26, available on the HSE website (last updated November 2023), indicates plans to analyse registrations by early 2024 to create a comprehensive picture of higher-risk buildings in England. The plan includes the development of a searchable portal serving as the national register of higher-risk buildings.

Certain planning-related provisions of the Levelling-up and Regeneration Act 2023, once enacted, will impact development processes.

Enforcement Time Limits:

Section 115 of the Levelling-up and Regeneration Act 2023 modifies planning enforcement periods in England. Under current regulations, Section 171B of the Town and Country Planning Act 1990 dictates the time available to local planning authorities for enforcing breaches of planning control via enforcement notices. Notably, a four-year enforcement period applies to breaches involving unauthorised building, engineering, mining, or other operations on land, as well as changes of use to single dwellinghouses. However, for other breaches, a ten-year enforcement period applies. Once Section 115 comes into effect, these time limits will be extended from four to ten years for enforcing planning breaches in England.

Commencement and Completion Notices:

Section 111 of the Levelling-up and Regeneration Act 2023 (subject to further regulations) introduces Commencement Notices, requiring developers to submit notices to the local planning authority specifying the anticipated start date of development. Failure to provide such notice may result in an offence. Additionally, Section 112 (subject to further regulations) introduces Completion Notices, empowering planning authorities to issue notices if they believe that development will not be completed within a reasonable timeframe. Furthermore, Section 113 (subject to further regulations) introduces a power for planning authorities to decline to determine planning applications in cases where earlier permissions have not been implemented or earlier development has been unreasonably delayed.

The Better Buildings Partnership has recently relaunched its Green Lease Toolkit on the BBP website, aiming to provide a refreshed and revitalised resource.

The Better Buildings Partnership comprises leading property owners committed to enhancing the sustainability of commercial buildings through collaboration. The Green Lease Toolkit offers drafting suggestions across various key areas of landlord and tenant relations where sustainability issues are relevant. These include provisions related to use, alterations, yielding up, rent review, service charges, EPCs, rights to carry out works, recycling, data sharing, metering, and smart buildings.

Many of the suggested clauses are designed to seamlessly integrate into the Model Commercial Lease, streamlining the drafting process and promoting a more consistent approach to addressing green issues. The BBP website offers different shades of green options for clauses, allowing owners and occupiers to align their sustainability goals both broadly and tailored to the specific asset under negotiation.

The Green Lease Toolkit and its drafting suggestions are readily accessible on the BBP website, providing valuable resources for those involved in commercial leasing negotiations.