Insights Commercial Property Law – Key Considerations (November 2023)

Our November 2023 summary of the latest developments in Property law and practice is as follows:

The Government has announced a delay in the commencement of the new requirement for delivery of Biodiversity Net Gain (“BNG”) in new development in England. Put simply, Biodiversity Net Gain requires developers to deliver measurably more for nature than is lost through development (a minimum 10% BNG, to be maintained for a period of at least 30 years). While BNG is already a planning consideration, new rules will mandate requirements to satisfy BNG as a planning condition.

On 27 September 2023, the Department for Environment, Food & Rural Affairs and the Department for Levelling Up, Housing and Communities signalled a delay to commencement with an announcement that regulations to implement BNG will only be laid before parliament this month (November), with an updated timetable aiming for commencement from January 2024, although BNG for small sites remains targeted to commence, as before, from April 2024, and implementation for Nationally Significant Infrastructure Projects remains targeted for 2025.

In the Prime Minister’s speech delivered on 20 September 2023, Rishi Sunak announced changes to the Government’s Energy Performance Certificate (EPC) targets for domestic properties. However, there was no mention of the similar upcoming changes for commercial properties.

In the private residential sector, the Government had previously proposed that the minimum energy efficiency standard for private sector lets should be raised from the current level of E to an energy efficiency rating of C for new tenancies entered into from April 2025 and for all tenancies in that sector from April 2028. While no formal announcement yet appears on Government websites (including the relatively new Department for Energy Security & Net Zero) it seems that this proposal is likely to be put on hold for a while.

So, is the same coming for commercial premises? Since 1 April 2023 it has been unlawful for landlords of commercial property to grant a new lease of, or continue to let property, where the EPC rating is below an ‘E’ without carrying out improvements and/or registering an exemption.

It was previously believed that 1 April 2027 would be the next target date for increasing the minimum energy efficiency rating requirement for the purposes of MEES to a C, followed by a further target of an increase to a minimum B rating from 1 April 2030.

A large majority of commercial properties are already well below a B rating and the age and construction of these properties may make it impossible to achieve a B rating. Due to this wide-ranging impact, the removal of the proposed targets, or even pushing them further down the line is likely to be a relief for commercial landlords, if it happens.

However, there is currently no guarantee that these proposed targets will be delayed for commercial landlords and even if they are, they may be re-introduced in the future. Watch this space.

The Powers of Attorney Act 2023 received Royal Assent on 18 September 2023. The Act facilitates the registration of digital lasting powers of attorney enabling a registered record of a digital instrument to be sufficient proof of the existence and contents of the instrument.

The Government says that there are more than 6 million lasting powers of attorney (“LPAs”) registered under a paper-based system and that digitalisation will speed up registration “by picking up errors earlier and allowing them to be fixed online rather than having to wait for documents to be posted back and forth between the applicant and the Office of the Public Guardian as currently happens”. Whilst the move to simplify and speed up the process is very welcome, people are already able to prepare their LPAs online through the Office of the Public Guardian website.  However, that system has limitations in that no advice is provided, and it is easy for applicants to have a document that does not really meet their needs, or in some cases does not work at all.

The main changes to making and registering LPAs can be summarised as follows:

  • Electronic LPA’s
  • ID checks to help prevent fraud
  • Only the Donor of an LPA can apply to register it. Donors can sign the application digitally, on paper, or a combination of the two
  • Notification of nominated persons

The digital process still requires “extensive testing”. The Act will rely upon secondary legislation for the detail of the new regime and for its commencement.