Commercial Property Update Oct 2022

Posted:15th October 2022

Stamp Duty Land Tax

SDLT Relief

From 23 September 2022 the Government has implemented SDLT reliefs that will be effective from hereon. The SDLT nil rate has been double from £125,000.00 to £250,000.00. This measure is similar to the Government’s temporary stamp duty holiday in 2020. The starting threshold of the temporary measure was set at £500,000.00 rather than £250,000.00.

First Time Buyers (FTB)

The nil rate for first time buyers has been extended from £300,000.00 to £425,000.00. The value that first time buyer’s relief can be claimed has also risen from £500,000.00 to £625,000.00.  As a result FTB can access up to £11,250.00 in relief.

Severance of a Joint Tenancy

As it stands the most common way to sever a joint tenancy is to serve a Notice of Severance. The only requirement is for the notice to be in writing and not to be returned undelivered by the postal carrier for it to be deemed served.

In the recent case of Dunbabin v Dunbabin [2002] the High Court of England and Wales confirms that even where a formal notice of severance has not been served it is possible to infer that severance of the joint tenancy took place by the relative conduct of the owners. In this context the joint tenants had made mirror wills which included written declarations that they no longer wanted the property to be held as joint tenants but tenants in common. Despite there being no formal notice of severance the conduct of the declaration of the will was determined to suffice.

Overseas Entities owning/acquiring Property

Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA)

From August 2022, an Overseas Entity which owns or intends to acquire a ‘qualifying estate’/ property in the UK must now comply with the requirements of the ECTEA. A ‘qualifying estate’ is any freehold property or a lease originally granted for a term of more than seven years.

  1. The Overseas Entity must register with Companies House to obtain a unique Overseas Entity ID. An Overseas Entity acquiring a qualifying estate in UK Property will not be able to make an application to register its interest at the Land Registry without an Overseas Entity ID.
  2. The Overseas Entity must provide detailed information about its beneficial ownership. This includes the disclosure of all managing officers and those with significant control.
  3. Information about the Overseas Entity must be submitted in English and must be verified by a UK based agent.
Key Dates:
  • A transition period exists until 31 January 2023 during which an Overseas Entity can dispose of its qualifying estate without an Overseas Entity ID. Where the Overseas Entity became a registered proprietor on or after 1 January 1999 will not need an Overseas Entity ID to make disposals until 31 January 2023.
  • An Overseas Entity will need to disclose any details of any disposals of a qualifying estate since 28 February 2022 as part of the registration process. This is regardless of whether they still own any UK Property at the end of the transaction period (as above).
  • From 5 September 2022, the Land Registry is planning to add a restriction to all registered qualifying estates, where the Overseas Entity became the registered proprietor on or after 1 January 1999. Without an Overseas Entity ID the Overseas Entity will no longer be able to make the following dispositions:
    • Transfer
    • Lease for a term of more than 7 years from the date of the grant;
    • Charge

Smoke and Carbon Monoxide Alarm Regulations October 2022 – Implications for Landlords

From 1 October 2022 the Smoke and Carbon Monoxide Alarm Regulations in England will change. Private Landlords will be required to comply with the new obligations from this date.

Carbon Monoxide alarms will now be needed in more rental properties.
  • Current under the 2015 regulations a carbon monoxide alarm must be installed in any room that is used wholly or partly as living accommodation and contains a solid fuel appliance.
  • From 1 October 2022 carbon monoxide alarms must be place in any room with a fixed combustion appliance.
Landlords will now be responsible for repairing and replacing fault alarms throughout the Tenancy.
  • This obligation will be triggered on receipt of a report from a tenant or their nominated representative.
  • Landlord is required to act as soon as is reasonably practicable. Reasonably practicable is not defined but given the safety implications of a fault alarm we can interpret and advise a Landlord should do so promptly.
Tenants will still need to report faulty alarms
  • This duty stays with the Tenant.
Tough sanctions for breaching the Smoke and Carbon Monoxide Alarm Regulations still exist BUT local authorise must consider a Landlord’s written representations.
  • The new regulations change the procedure in relation to the service of remedial notices.
  • From 1 October 2022, local authorities are under a duty to consider challenges made by a Landlord in response to a remedial notice. During the review period the remedial notice is suspended.
HMO and other licence conditions will also be amended.
  • As it stands, there are mandatory conditions in HMO and selective property licences that incorporate the duties set out in the smoke and carbon monoxide alarm regulations.
  • The new regulations will alter the mandatory conditions to include the fixed combustion appliance regulation stated above.
  • This will only apply to property licences that are granted on or after 1 October 2022.