Commercial Property Update January 2023

Posted: 31st January 2023

Fire Safety

The Fire Safety (England) Regulations will be implemented from 23 January 2023. These regulations are only applicable to buildings in England comprising of two or more domestic premises. This includes student accommodation and residential parts of mixed-use buildings. Regulators such as the Fire Service, Building Safety Regulators and Local Authorities see these changes as a more effective regulatory framework that will enable much closer scrutiny and enforcement action where breaches have occurred.

The general obligations on responsible persons in relation to all multi-occupied residential buildings are:

  1. Display and ensure residents hold a copy of fire safety instructions including information on how to report a fire and the appropriate evacuation strategy
  2. Provide residents with key information about the importance and operation of fire doors.

Residents should be reminded about the above information on an annual basis.

The specific regulations will differ depending on the height of the building.

Residential Buildings between 11 and 18 metres 

The responsible person is obligated to:

  • Undertake annual checks
  • Complete remedial works on flat entrance doors
  • Complete works on communal area fire doors at least every 3 months

High-rise residential buildings over 18 meters

The responsible person is required to:

  • Provide the local Fire and Rescue Service with up-to-date electronic building and floor plans and ensure a hard copy is placed in the secure information box.
  • Provide the local Fire and Rescue Service with information above the design and materials of the external wall system. This must include any risks of the system and mitigating provisions. This should be updated regularly and specifically if any significant changes are made to the external walls.
  • Install and maintain a secure information box containing the contact details of a building’s responsible person and hard copies of the building and floor plans.
  • Install wayfinding signage
  • Undertake monthly checks on any lifts intended for use by firefighters and evacuation lifts in the building.

The Government has also launched a consultation regarding the obligation of a second staircase to high rise buildings over 30 metres. However this is thought to not be retrospective and therefore will not affect those with developed plans.

Charities Act 2022

The provisions in the Charities Act 2022 covering the disposal of land by charities are due to come into play in Spring 2023.

Any disposals of land, no matter the size of the land will be impacted by the Act. The Act will also be of relevance to those acquiring land from charities.

What do these new provisions mean: 

  • Softening of rigid rules that relate to pre-disposal advice
  • Allowing charities to take less prescriptive advice on land disposal from a larger group of people with expertise. In short, professional advice must still be obtained prior to a disposal but there will be a wider pool of potential advisors.
  • Remove obligation for charity trustees to certify in their individual capacity in the document transferring title that the relevant obligations under the Charities Act 2011 have been met.

Anticipated Changes in 2023

Companies House Reform 

Further legislation aimed at tackling money laundering and economic crime is expected in 2023. This takes the form of the Economic Crime and Corporate Transparency Act- currently in Bill form.

The most evident change will be the implementation of mandatory identity verification for anyone incorporating or filing with Companies House. Here we see a shift in role from administrator to gatekeeper. This in turn will have a large impact on the way UK Companies are administered.

Empty Shop Auctions 

Part 8 of the Levelling-up and Regeneration Bill which is currently being considered in Parliament will give local authorities the power to conduct compulsory rental auctions of certain vacant high street premises.

What does this mean:

  • The protection of the 1954 Act will not apply to these tenancies.
  • Local authority is given the power to do anything the proprietor could do in order to let the premises such as granting rights over land outside the premises.

HOWEVER… 

  • The area in which the premises is located must be ‘designated high street’ or ‘town centre’ due to its importance in the local economy
  • The premises will need to have been unoccupied for a year of 366 within the previous two years
  • Local authority must consider that occupation of the premises for high-street use would be of benefit to the local economy, society or environment.
  • Local authority must give the proprietor notice and opportunity to let the premises prior to auction.

Prescribed clauses for leases 

The Land Registry will reject a lease for a term longer than seven years which does not include the new form for prescribed clauses from November 2023.

The new form makes it clear whether or not parties are overseas entities and new leases should be checked to ensure this is being used.

Building Safety Levy consultation closes 7 February 2023 

The details for the Building Safety Levy Consultation are expected to be finalised during 2023 with the second consultation on the government’s proposals closing on 7 February 2023.

The Levy is intended to raise funds to remediate unsafe defects in buildings. Under the provisions, the local authorities are authorised to collect the levy from developers of residential buildings. This is regardless of the building’s height. However affordable homes, care homes and developments of less than 10 units will be exempt. Although it was not yet been determined whether built-to-rent, purpose-built student accommodation and senior living residences will fall within scope.