Property insolvency

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Property weekly highlights—4 March 2021

The following Property news provides comprehensive and up to date legal information on Property weekly highlights—4 March 2021

Spring Budget 2021—views from the market

The following Private Client news provides comprehensive and up to date legal information on Spring Budget 2021—views from the market

Factors to consider on a statutory footpath diversion are not exhaustive (The Open Spaces Society v Secretary of State for Environment, Food and Rural Affairs)

The following Local Government news provides comprehensive and up to date legal information on Factors to consider on a statutory footpath diversion are not exhaustive (The Open Spaces Society v Secretary of State for Environment, Food and Rural Affairs)

Failing to set out basic allegations leads to strike out in insolvency proceedings (Sampathkumar v Wildwood CR)

The following Property Disputes news provides comprehensive and up to date legal information on Failing to set out basic allegations leads to strike out in insolvency proceedings (Sampathkumar v Wildwood CR)

Featured Property content

What is a certificate of title?

A certificate of title (also known as a certificate on title) is a particular species of report on title.When solicitors are instructed to investigate...

Constructive trusts

Millett LJ subdivided types of constructive trust into two categories, distinguishing between:•the constructive trust proper, where equity intervenes...

Title guarantee and covenants for title

On the disposition of a property (whether by way of conveyance, transfer or charge), the party making the disposition will normally provide a title...

Resulting trusts

Resulting trusts represent one of the three types of trust which do not require to be declared or evidenced in writing. The others are constructive...

Practice notes

Standard Commercial Property Conditions (Third Edition—2018 Revision)

The third edition of the Standard Commercial Property Conditions was published on 27 April 2017 a...

9th Nov

Practice notes

Equitable mortgages and equitable charges—general principles and registered land

Nature of mortgages and chargesMortgages and charges are distinct forms of security. A mortgage can be legal or equitable and involves the transfer of...

9th Nov

Practice notes

Standard Commercial Property Conditions (Second Edition)

The second edition of the Standard Commercial Property Conditions came into force on 1 June 2004 and these conditions are incorporated into many...

9th Nov

Practice notes

Tacit relocation in commercial leases in Scotland

In Scotland, at common law, a lease does not actually end on the specified expiry date (ish) unless:•either party gives correct and timeous...

Produced in partnership with Kenneth S Gerber of Mitchells Roberton 12th Jan

Scottish Law

Practice notes

Headline rents

What is a headline rent?In a falling market, landlords frequently offer tenants financial inducements to take a lease in order to maintain the level...

9th Nov

Precedents

Specific clauses for transfers—indemnity covenant

Panel 11 (transfer of whole)/panel 12 (transfer of part)—Additional provisions1Definitions[Lease•the lease particulars of which are set out in...

9th Nov

Practice notes

Implied easements—common law

There are three different ways by which an easement can be implied at common law:•necessity•intended use•the rule in Wheeldon v BurrowsThe implied...

9th Nov

Practice notes

Oversailing

TrespassTrespass is the unlawful presence of a person on land in the possession of another. The ownership of land includes the airspace above it....

9th Nov

Practice notes

Applying the proceeds of sale

Sale by a mortgagee destroys the equity of redemption in the mortgaged property. The sale defeats the rights of all subsequent incumbrancers, whose...

9th Nov

Practice notes

Guide to reviewing certificate of title

Coronavirus (COVID-19): The requirements to obtain an EPC before a property is sold or let can be difficult to satisfy when social distancing measures...

9th Nov

Q&As

Section 58 of the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) automatically transfers any existing mortgages on a leasehold title when the lease is extended under LRHUDA 1993. Therefore it is not necessary to obtain the mortgage company's consent to the lease extension. However, if there is a mortgage on the landlord's title, does the landlord need to obtain consent or does LRHUDA 1993, s 58 also render obtaining consent unnecessary?

Section 58 of the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) governs the position in respect of mortgages both of the...

Produced in partnership with Chris Bryden of 4 King’s Bench Walk 12th Jan

Practice notes

Rent suspension or cesser

Generally, the tenant remains liable for the rent even though the premises have become unusable. Consequently, leases normally contain a provision...

9th Nov

Practice notes

Contract races

The Solicitors Regulation Authority’s (SRA) Handbook (SRA Handbook 2011) which contains the Solicitors Regulation Authority’s Code of Conduct (SRA...

9th Nov

In-house

Practice notes

Easements—nature and characteristics

Nature of an easementAn easement is an incorporeal right enjoyed by the owner of a legal estate (dominant tenement) over land in the ownership of...

9th Nov

Practice notes

What is a good and marketable title?

A good marketable title is shown where a seller is able to deduce a good title to the property he has contracted to sell. The seller is not required...

9th Nov

Practice notes

Double funding

Brexit: The UK left the EU on 31 January 2020. This has implications for the schemes providing for agricultural subsidies in England and Wales, which...

9th Nov

Most recent Property insolvency content

Q&As

CPR 73.10C makes provision in respect of enforcing charging orders by way of an order for sale. Do the provisions of CPR 40 also apply in that context, for example in respect of the power to order up possession of land under CPR 40.17 and regarding applications to court in respect of incumbrances under CPR PD 40D?

CPR 73 sets out the procedure for the obtaining of a charging order over property or securities to secure a judgment debt. The court will make an...

Produced in partnership with Chris Bryden of 4 King’s Bench Walk 22nd Jan

Q&As

A legal charge over a property does not contain any power to appoint a receiver or take possession. The chargee needs to take possession of the property in order to discharge an outstanding debt. Would the correct procedure be for the chargee to apply for an order for sale or an order for possession?

A legal charge provides notice to the world of a security enforceable against the equity in the property against which it is secured (or, where there...

Produced in partnership with Chris Bryden of 4 King’s Bench Walk 22nd Jan

Q&As

Where a tenant company has filed a company voluntary arrangement (CVA) and wishes to assign the lease, should the landlord deal with the tenant or its insolvency practitioners in that regard? And, in the context of a CVA, can the landlord request an authorised guarantee agreement from the original guarantor?

Although the supervisor of a company voluntary arrangement (CVA) will be an insolvency practitioner (and their role is to ensure that the proposals...

Produced in partnership with Helen Galley of XXIV Old Buildings 22nd Jan

Q&As

Where the beneficial interest in freehold property was owned by two companies as tenants in common prior to dissolution of one of the companies, and the Treasury Solicitor has disclaimed the property, what happens to the dissolved companies’ interest following disclaimer?

We have been unable to find definitive authority on how freehold property would be treated. However, the below content may assist with your...

22nd Jan

Q&As

A money judgment has been obtained. A British Virgin Islands company owns a property which is about to be sold. The judgment debtor is putatively a shareholder of the company registered as proprietor. There is a restriction on the property. Can it be said that the client is therefore an incumbrancer for the purposes of section 105 of the Law of Property Act 1925?

Application of proceeds for saleSection 105 of the Law of Property Act 1925 (LPA 1925) provides thus:‘Application of proceeds of saleThe money which...

Produced in partnership with Christopher Snell of New Square Chambers 22nd Jan

Q&As

Can a buyer rely on the Insolvency Act 1994 where the seller of the property was a party to a transaction at an undervalue when the property was transferred from joint names of the seller, X, and Y, into names of the seller and X?

For the purpose of answering this Q&A, it is assumed that the sellers, X and Y are all individuals, and that none of them are corporate...

22nd Jan

Q&As

Where a bankrupt’s home is being sold with the bankrupts agreement without an order for sale and the bankrupt is the registered owner, does the bankrupt need to sign the sale agreement and TR1 as well as the trustee?

For the purposes of this Q&A, we have assumed that the bankrupt was the sole legal owner of the property. Where an individual is declared bankrupt and...

22nd Jan

Q&As

Where a developer company has been wound up without transferring the freehold of an estate road to a residents’ management company (Manco), would the Manco be able to seek a vesting order? Could the Manco elect to leave the road with the Crown and merely maintain it?

We have assumed that the estate road is not a public highway, and adoption of the road by the Highways Authority is not considered.Initial entitlement...

Produced in partnership with Jonathan Edwards of Radcliffe Chambers 22nd Jan

Q&As

A seller has exchanged contracts for the sale of commercial land but fears that the buyer may go into administration before completion. If an administrator or other insolvency practitioner is appointed, will the seller be obliged to complete the contract?

Failure to complete contract for the sale of landTime is generally not of the essence for completion of a contract for the sale of land. If the seller...

22nd Jan

Q&As

If a joint owner ('the former joint owner') transfers their interest to the other joint owner for no consideration, the remaining joint owner sells to a buyer within five years and the former joint owner becomes bankrupt, can the former joint owner's trustee disturb the transfer to the buyer or claim compensation/damages/payment from the buyer by reason of a transfer at an undervalue by the former joint owner?

Bankruptcy and transactions at undervalueSection 339 of the Insolvency Act 1986 (IA 1986) provides that the trustee of a bankrupt’s estate may apply...

Produced in partnership with Chris Bryden of 4 King’s Bench Walk 22nd Jan

Q&As

Can a landlord proceed to forfeit a commercial lease on the basis that a bankruptcy order has been made knowing that the application for annulment (the grounds being that the petition was not served) is due to be made where there are no other forfeiture grounds? If the lease is forfeited and a new lease granted to a new tenant regardless of the proposed application for annulment will any annulment of the order have any effect on the newly granted lease?

For the purposes of this Q&A we have assumed that there is no ground to forfeit as a result of non-payment of rent.The first point to consider is...

Produced in partnership with Kate Andrews of Hamlins 22nd Jan

Q&As

A landlord let commercial premises to company A. The lease contained the usual forfeiture and re-entry provisions. Company A became insolvent and the directors of company A formed company B. The landlord demanded and accepted rent from company B, notwithstanding that there was no written agreement between them. Company B has now defaulted on the rent and the landlord wants to get them out. Can forfeiture provisions be implied or, if not how can the landlord get this tenant out of the premises?

Insolvency of a tenant can cause various difficulties for a landlord. Depending upon the status of an insolvent company, the landlord may have...

Produced in partnership with Chris Bryden of 4 King’s Bench Walk 22nd Jan

Q&As

There are rent arrears of c.£7,000.00, but the tenant company has recently been struck off the Companies House register and is now dissolved. In such a situation (the property being wholly commercial) can the landlord effect peaceable re-entry into the property and whether there are any pre-requisites to doing so?

Forfeiture is the landlord’s express right to re-enter premises and end a lease due to a breach of covenant or the occurrence of a specific event...

22nd Jan

Q&As

Where the freehold of a building was sold for a market price to a third party at the same time as the seller being granted a 999-year lease of the premises for £1, should a purchaser of the 999-year lease a year later be concerned that the transaction was at an undervalue?

It is assumed that an issue has arisen in respect of a commercial building, or at any rate that no more than 50% of the building comprises residential...

22nd Jan

Q&As

Does a mortgagee continue to have rights over an underlease title if the undertenant has charged its interest by way of a legal charge, but subsequently enters into liquidation, the appointed liquidator disclaims the lease and more than three months have passed since the notice of disclaimer? Also, how can the intermediate tenant close the disclaimed leasehold title that is still subject to the charge, where the mortgagee will not supply a DS1 without payment of the debt?

Where a liquidator has disclaimed a lease under section 178 of the Insolvency Act 1986 (IA 1986), the rights of a mortgagee of the disclaimed interest...

22nd Jan

Q&As

A property has a Form K restriction registered against the proprietorship register in relation to a third party charging order. Notice of the proposed sale has been given to that third party. On sale of the property, is the seller under any obligation to pay the amount secured by the charging order to the third party?

This Q&A raises the nature of Form K restriction entered under the Land Registration Act 2002 (LRA 2002) and one of the weaknesses from which it is...

22nd Jan

Q&As

Does a charging order (interim or final) create an interest in land once protected at the Land Registry correctly? Does it allow the property to be sold and if so, does a court application need to be made for an order of sale?

It is assumed that:•the debtor is the sole registered proprietor of the relevant property and is not holding the property as a trustee, and•the...

22nd Jan

Q&As

A CH1 charge by way of legal mortgage was obtained as security for a loan. The charge was not registered at HM Land Registry because there was a prior mortgagee who refused for the charge to be registered as their consent was not obtained. Can the second mortgagee prevent the mortgagor from selling the property at an undervalue, and could they apply to the court for an order that the property is sold at market value?

This Q&A assumes that the legal mortgage is otherwise valid and executed correctly, and the only defect is the failure to register.This question...

22nd Jan

Q&As

Is a squatter entitled to make an adverse possession claim against the freehold proprietor in the event that the head leasehold title on which the land is actually held has since been voluntarily disclaimed by a company in liquidation?

If land is unregistered, L (a freeholder) grants T (tenant) a lease of that land and T is then dispossessed by S (squatter), the 12-year limitation...

Produced in partnership with Desmond Kilcoyne 22nd Jan

Q&As

Where a tenant company has been dissolved, but a director of the company (who is also a guarantor) remains in occupation, is the landlord able to take steps to recover possession or must it await disclaimer of the lease first?

The dissolution of a limited company results in its property (which includes leasehold interests) vesting in the Crown as bona vacantia. Bona vacantia...

Produced in partnership with Chris Bryden of 4 King’s Bench Walk 22nd Jan