Much is being written about the General Data Protection Regulation which comes into force in May 2018. Some of that content uses jargon that needs to be explained.

Privacy by design

Is an approach to projects that promotes privacy and data protection compliance from the start. This has always been an implicit requirement of the data protection principles but the GDPR makes it an express legal requirement.

Privacy impact assessments/data privacy impact assessment/PIAs/DPIAs

All terms describe the same thing. A privacy impact assessment is a tool to help an organisation identify the most effective way to comply with its data protection obligations and to meet individual’s expectations of privacy. A PIA is an integral part of taking a privacy by design approach and will enable an organisation to systematically and thoroughly analyse how a project or system will affect the privacy of the individuals involved.

Right to be forgotten

The right of an individual to require that a data controller deletes all information relating to that individual where the data is no longer required; the data has become irrelevant; where the individual withdraws consent to the processing of that information; or where the data is unlawfully processed.

Right to data portability

This is the right of individuals to obtain and reuse their personal data across different services.

Data Protection Officers

The individual responsible for compliance and training and who must be the first point of contact for all matters relating to data privacy. A data protection officer or DPO must be appointed by public authorities; organisations carrying out large scale and systematic monitoring of individuals; or organisations that carry out large scale processing of special categories of data or data relating to criminal convictions and offences.

For more information on the GDPR and how it may affect your business please Talk to Tollers on 01604 258558 and ask to speak to Liz Appleyard in our Commercial Team

Just got engaged and planning your wedding? Congratulations! We know there is a lot to think about when planning for the biggest day in your life so far and we have set out below some guidance to help make the big day run smoothly and your life together more secure.

Contracts and terms and conditions

As you will quickly learn, weddings are expensive and, more likely than not  you will  be required to pay large deposits to secure bookings with your suppliers, for example with your venue. It is vital that you ensure you have a contract in place with each supplier you engage and that you read the terms and conditions that apply to you before you sign any documents and pay the deposit. Having something in writing will ensure that both you and the supplier are clear on the terms agreed which will help avoid any disputes later down the line.

Payments

You should also keep a record of a payment schedule to ensure that you pay various suppliers on time. If you miss payments, the supplier may have the option in their terms and conditions to terminate the contract or suspend their services until they receive payment from you.

Deposits and cancellation rights

As you will be paying big deposits you should check whether the terms and conditions allow you to cancel the contract. You may want to do this if you change your mind about a supplier or you may need to in the event of any unforeseen circumstances such as the death of a family member.

If you have signed the contract away from the supplier’s premises (e.g. online) you are afforded some rights under the Consumer Contracts Regulations 2013 (“Regulations”). The Regulations give consumers a ‘cooling off period’ which is the right to cancel the contract within 14 days (usually from the date of the conclusion of the contract) without giving any reason or incurring any costs. The supplier is also required to give you certain information before you sign the contract, such as their full details and how you can contact them, the prices of the goods/services, their complaint handling policy etc. If the supplier does not provide you with this information, then your right to cancel may be extended to 12 months from the date the contract was signed.

If the contracts are actually signed at the supplier’s premises, you will not have the cooling off period granted by the Regulations but you should still check what the cancellation provisions state as you may need to cancel the contract. Most suppliers will want to recover most of the deposit or a percentage of the full price as compensation for their loss. The closer the date you cancel the contract to the date of your wedding, the more likely you will be required to pay a bigger sum to the supplier. However, suppliers have to be careful and ensure that any sums they retain actually reflects their reasonable loss. If the provisions are considered as a ‘penalty’ under common law, the clause will be unenforceable. We can review the terms and conditions for you and provide you with advice.

Faulty goods/services and dispute management

Once you have booked the goods/services you should follow up in writing with the supplier for every new or amended terms agreed over the phone. This will help avoid any confusion and protect your interests in the event of any disputes.

The Consumer Rights Act 2015 (“CRA”) gives consumers additional rights in respect of faulty goods or services provided by traders (i.e. photographers, venue suppliers etc).

With regard to any goods you purchase (e.g. table centre pieces, decorations, stationery), the CRA says goods must be as described, fit for purpose and of satisfactory quality. During the expected lifespan of the goods you are entitled to the following:

With regards to services you book (e.g. musicians/DJ):

Writing a will

It’s not the most romantic thing to think about but a Will is an important legal document that gives you the opportunity to set out your wishes and determine how your assets (or estate) will be dealt with when you die. If you already have a will in place, you do need to review this after or before your marriage as marriage will automatically revoke an existing will unless that will has been made expressly in contemplation of your impending marriage. Our Trusts and Estates team who would be more than happy to answer any queries you have and to prepare a will for you.

Moving house

Where are you both going to live? You may decide to move homes before or shortly after your wedding. You will need to think how you wish to own the property with your partner. Again, not the most romantic thing to think about but you may need to consider what you wish to happen on the death of you or your partner or in the event of a relationship breakdown.

You may own the property either as joint tenants or as tenants in common. Under a joint tenancy arrangement, you and your partner would own the property jointly and in equal shares and upon the death of one party, the property will automatically vest in the survivor. In this scenario there is no share capable of being left in the will. However, you will need a will to determine what will happen to the property in the event that you both die.

As tenants in common, you and your partner would take distinct fixed shares in the value of the property. This will usually be equal shares unless you specify unequal shares, for example to reflect contributions to the purchase price. Upon the death of one party, the survivor would retain their own share in the property whilst the share of deceased would pass according to their will or pursuant to intestacy rules if there was no will.

Moving homes can be a stressful time especially whilst planning your wedding. Our conveyancing team can advise you of your options and support you through the process so that it runs as smoothly as possible.

We wish you good luck in your planning but if you would like more information about the issues above or any queries you may have, Talk to Tollers on 01604 258558.

Tenants trying to exercise a break clause in their leases before the end of a quarterly rent period should beware trying to pay only a pro rata part of that rent when it is demanded, or risk the break being ruled ineffective by the court.

A tenant’s lease required rent to be paid “yearly and proportionately for any part of a year” in equal quarterly payments. The tenant served notice to end the tenancy under a break clause in the lease – a clause allowing it to get out of the lease at certain points specified in the lease, provided it met certain conditions. As drafted, the break clause was only effective if the tenant had paid:

The effect of a valid break would be that the lease would end on 22 August, before the next full quarter had finished.

The landlord issued an invoice for a full quarter’s rent for the period from 24 June. The tenant paid the sum in the invoice in full, and referenced the invoice number. On the face of it, it seemed the tenant had not paid the sum equivalent to the additional one month’s rent, and the landlord argued the break had not been validly exercised.

The tenant claimed that according to the wording in the break clause it only had to pay rent up to 22 August. It therefore argued it had complied with the break conditions, because the payment it had made was for both rent up to 22 August, and also the extra sum it had to pay (equivalent to one month’s rent).

The High Court disagreed, ruling that the tenant was contractually obliged to pay the full quarter’s rent in advance on the quarterly rent day despite the break notice, as there was no certainty at that point that the break would be successfully exercised. There was an exception if a lease specifically allowed a tenant to apportion rent in anticipation of the successful exercise of a break. But in this case, the words “proportionately for any part of a year”, even read in conjunction with the break clause, did not specifically allow such an apportionment. The tenant had not paid the extra sum equivalent to one month’s rent.

The court went on to say that, even if the tenant had only been liable to pay an apportioned rent it would still have decided the break had not been validly exercised. This was because, by referencing the invoice number when making its payment, it had led the landlord to believe it was only paying the full quarterly rent demanded, but not the extra sum.

Recommendation

Tenants should ensure:

Case ref: Canonical UK Ltd v TST Millbank LLC[2012] EWHC 3710

A scheme introduced in 2012 allowed residential property owners to put a notice on their registered title to the effect that their property cannot be sold, mortgaged or otherwise dealt with unless a solicitor or conveyancer certifies that the real property owner has signed the relevant legal documents.

The scheme has now been extended to owners of business property for a six-month pilot. Business owners can apply for a restriction to be registered against up to three properties free of charge. A restriction entered during the pilot will remain effective after the trial ends unless the business specifically applies to remove it.

The restriction will stop anyone registering a transfer or mortgage unless a solicitor or professional conveyancer provides a certificate that:

The scheme is likely to result in extra enquiries on sale, lease or mortgage of a property. There may also be issues complying with the restriction where a company has become insolvent and a liquidator or administrator is dealing with the transaction. Therefore, companies facing potential insolvency should consider taking advice.

A business tenant successfully exercised a break clause and terminated its lease in March 2010. The tenant had made quarterly payments in advance on account of service charges, based on estimated expenditure in future years, as required by the lease. These included charges of £795k, collected and built up over three years from 2006 to 2009, for proposed major building works. The service charge year ran from 1 January to 31 December.

The major works were not carried out until after termination of the tenant’s lease, and the total costs were over £1m. There were two disputes: the first concerned how much the landlord could charge for services for the year during which the break was effective, and the second concerned whether the landlord should repay the £795k already paid, because none of the works took place (or were paid for) until after the lease had terminated.

As to the first dispute, the court said that the service charge imposed by the landlord for the year in which the break took place (2010) could cover the complete year to 31 December 2010, and not just that part of the year before the break took effect in March.

However, it also ruled that only costs actually incurred in 2010 could be included. As some of the payments to the contractors for the major works had been made in 2011 these could not be included in the outgoing tenant’s service charges for 2010. Nor could the landlord include service charges for remaining major expenditure planned for 2011.

As to the second dispute concerned the £795k, the court ruled that under the terms of the lease, this had to be repaid as none of the works it was collected for had been carried out until after the lease had ended.

The court set off the amount to be paid for 2010 against the £875,000 to be repaid, creating an excess. The court therefore awarded the tenant a percentage of that excess, pro rata its period of occupation of the premises during the 2010 service charge period before termination under the break clause.

Recommendations

Case ref: Friends Life Management Services Ltd v A & A Express Building Ltd [2014] EWHC 1463

A landlord has missed out on an additional 13 months’ rent after its tenant remained in occupation of premises after its lease had ended. The tenant made only desultory attempts to negotiate a new lease, and then gave immediate notice to leave.

The law says that when a tenant stays in occupation after a lease has ended, a periodic tenancy arises unless there is clear evidence the parties are actively negotiating a new lease. If they are, the inference is they intend the continuing occupation to be a tenancy at will, pending agreement (or otherwise) on the new lease.

If there is a periodic tenancy, any notice given by the tenant has to expire on the anniversary date of the new, periodic annual tenancy and the tenant has to pay rent and other charges up to that expiry date. If there is a tenancy at will the tenant can give immediate notice to terminate the tenancy.

In this case, a tenant’s lease of premises ended but the tenant remained in occupation for a further three years. Under the old lease the parties had specifically agreed that the tenant would not have a form of security of tenure which would otherwise have applied under landlord and tenant law. There were occasional attempts to negotiate a new lease with the landlord, but they were ‘desultory’. The tenant then gave three months’ notice to leave.

The landlord claimed that a new, yearly periodic tenancy had been created because of the tenant’s ongoing occupation as the tenant had not been actively negotiating a new lease. It therefore claimed 13 months’ rent, insurance rent and service charge – amounting to some £185,000.

The tenant argued that the new tenancy was a tenancy at will, and could be ended immediately at any time by either of them. The three months’ notice it had given was, in fact, more notice than required.

Originally, the High Court ruled that there was a periodic tenancy. It found that the property was the tenant’s main, fully equipped office, so the tenant must have wanted protection against immediate eviction. There was therefore a strong implication that the tenant intended there to be a periodic tenancy, giving it protection from eviction.

Particularly, the High Court felt that had the tables been turned and the landlord had given the tenant immediate notice to quit, the tenant would not have agreed that there was a tenancy at will in those circumstances. It would, in the court’s view, have argued that there was a periodic tenancy.

The Court of Appeal has now overturned the High Court ruling. It ruled:

Recommendation

Where a tenant remains in occupation of a property after its lease has ended – other than for a short period during which it is clearly and actively negotiating a new lease – landlords should require tenants to sign a new agreement. This should make clear the basis upon which the tenant is occupying the premises, (for example, as tenant at will) or seek vacant possession straight away.

Case refs:     Barclays Bank Wealth Trustees (Jersey) Limited v Erimus Housing Limited (2013) EWHC 2699

Erimus Housing Ltd v Barclays Wealth Trustees (Jersey) Ltd & Ors [2014] EWCA Civ 303

The self help remedy of distraint, often used by commercial landlords will come to an end on 6 April 2014.

Distraint will be replaced by the Commercial Rent Arrears Recovery (CRAR) regime which will give commercial landlords a right to recover arrears using the prescribed enforcement procedure.

There is no question that the new regime is more restrictive and almost certainly will not be popular with landlords.

The key changes are as follows: –

  1.  A landlord will now have to serve at least a 7 day notice on a tenant before the goods can be seized.  There is an exception where a landlord makes an Application to the Court for a lesser notice period.
  2.  The CRAR will apply only to commercial premises.  If the premises are of mixed use, then it cannot be applied.
  3. CRAR applies only to tenancies evidenced in writing and not to licences to occupy.
  4. A landlord can only recover actual rent. Costs which are not rent but might have been reserved as rent will not be included. Common examples are service charges, rates and insurance.  All of these are excluded.
  5. The arrears of rent must exceed a minimum of 7 days rent.

Landlords also need to bear in mind additional notices are required. A 7 day notice must be provided before a sale can commence and the enforcement agent must also provide notice where he seeks to re-enter the premises having previously seized but not removed goods.

A landlord will have to use “an enforcement agent” to take control of goods to recover rent. Previously the landlord would be entitled under distraint to attend themselves or use an agent.

The new regulations allow for enforcement to proceed on any day of the week between 6.00 a.m. to 9.00 p.m. Where the normal operating hours of the tenant business are not between these periods, the normal operating hours of that business.

Overall, the new regime is likely to be less flexible and more costly in terms of time and administration. From a landlord’s point of view clearly the new procedure is inferior to its predecessor, but, from 6 April 2014, this is the regime which the landlords need to use.

Landlords will welcome a recent Court of Appeal decision that means they can recover rent from an administrator of a limited company tenant in administration, whenever the administrator was appointed.

The objective of an administration is to try to rescue the company and prevent it going into liquidation so an administrator will usually try to ensure the company continues trading.

If the company leases premises and the rent payable is an expense of the administration, it will (almost always) be paid in full to the landlord before money is paid to other creditors of the company. The landlord has priority, including over the administrators’ own remuneration and expenses (although not over claims under a fixed charge). However, if rent payable is not treated as an expense of the administration, but merely as a provable debt, the landlord ranks as an unsecured creditor with no such priority and will often not receive any rent.

In an important case in 2012, the High Court said rent that had fallen due before an administrator was appointed – for example, quarterly rent payable the day before an administrator was appointed – was not an expense of the administration. Therefore, it did not have to be paid in priority over other creditors, even if the administrators went on to trade from the premises for all or part of the remainder of that quarter.

Following that decision, many administrators made sure they were appointed the day after the date when a quarterly rental payment fell due, so they did not have to treat the payment as an administration expense.

However, in a new case involving £3m of unpaid rent the Court of Appeal rejected the administrator’s argument that as he was appointed the day after the rents became due, they were not an administration expense. Reversing the previous High Court decision, it ruled that:

Administrators must therefore now make rental payments for as long as they keep possession of premises for the benefit of the administration – ie on a ‘pay as you go’ basis. The rent is treated as accruing from day to day and is payable as an administration expense.

This ruling will apply equally to liquidators in the winding up of a limited company.

Recommendation

Case refs:     Goldacre (Offices) Ltd v Nortel Networks UK Ltd [2009] EWHC 3389

Leisure Norwich (II) Ltd and others v Luminar Lava Ignite Ltd (in administration) and others [2012] EWHC 951 (Ch)

Pillar Denton & Others v. Jervis & Others [2014] EWCA Civ 180

The case of Gavin and Another –v- Community Housing Association Ltd [2013] EWCA. CIV 580, Court of Appeal Decision gives a warning to Tenants in respect of the extent of the Landlords’ repairing obligations under a lease.

The case concerned a lease which was silent on the responsibility the Landlord had for repairs to the retained parts of the property.

The Tenant’s claim against the Landlord concerned losses which it had sustained due to damage by water leaks and leaks from the soil pipes in the building. The damage was repaired using insurance proceeds. The Tenant claimed damages in respect of losses caused to the business as a result of the interruption which resulted from the leaks.

The Landlord argued that it had no liability to the Tenant other then reimbursing the insurance proceeds to repair the damage which had been done.

The ruling at first instance had been: –

The Tenant appealed and he was not satisfied that the Judge had held the Landlord’s liability to be limited in negligence alone and depended on the Landlord having noticed the defect and a reasonable opportunity to remedy it. Further, the Tenant maintained that the Landlord was under an absolute duty under an implied obligation in the lease.

The Landlord cross appealed that there should be no duty implied if the lease provided a comprehensive scheme for the Landlord to insure the layout of the insurance monies.

It is worth noting that the Tenant had the lease of the ground floor and basement. The demise included the internal plaster, ceiling and floor coverings, the doors and windows and all conduits within the demise premises. The Landlord retained the structure of the building, including the soil pipes at the rear of the building that served the residential flats on the floors above the demised premises.

The lease contained no covenant requiring the Landlord to repair the parts of the building retained by them. The Landlord was required to insure the demised premises and the retained parts but that was all in respect of the expressed obligations. There was a clause which suspended payments if the demised premises or any part of them were damaged by an insured risk so as to be unfit for occupational use by the Tenant.

In allowing the Landlord’s appeal and dismissing the Tenants appeal, the Court of Appeal concluded the Landlord had no duty to repair the retained parts. In this case the Landlord was not under an express obligation to repair, but the lease did contain a comprehensive code for dealing with repairs to the retained parts through the insurance provisions.

From a Tenant’s point of view, the case emphasizes how important it is that the lease provides for who is responsible for repairing the various parts of the buildings. Landlords will conversely obtain a measure of comfort from the case. The Courts have made it clear that they would not consider a term should be implied into a lease requiring the Landlords to repair the retained parts of the property where other provision has been made.

The case considering this point is in Peel Land and Property (Ports no. 3) Ltd –v- TS Sheerness Steel Ltd [2013] EWHC 16.58 (Ch).

In this case the lease provided that the tenant would build a fully equipped steel making plant and rolling mill. The rent review provisions excluded any value attributed to the buildings constructed by the tenant on site. In particular, clause 2 (6) of the lease prohibited the tenant from making any alternations, changes or additions to the premises except in connection with the permitted use.

The tenant wished to remove large parts of the steel making plant. The landlord applied to the Court seeking a declaration that it owned the plant and an Order to restrain the tenant from disposing of it. The tenant claimed that if items of plant were removable, they were tenant’s fixtures or chattels.

The landlord argued the lease obliged the tenant to carry out the works which included the installation of the plant equipment. Therefore, as a matter of commercial reality it was the same as if the landlord had constructed a fully equipped steel making plant and let it to the tenant. The buildings, plant and machinery belonged to the landlord.

The landlord stated that some of the items were not separate fixtures but part of larger fixtures. If a part could not be removed, if it would be damaged by the severance of another part, or would lose its functionality then no part of the larger fixture could be removed.

Lastly, the removal of fixed plant and machinery by the tenant would breach clause 2 (6) of the lease. The intended removal was not in connection with the use of the premises for steel making.

The Court considered whether: –

  1. Any of the disputed items were chattels;
  2. If not chattels then did the items fulfill the criteria of removability;
  3. If the item was otherwise an irremovable tenant’s fixture, did the terms of the lease and in particular clause 2 (6) override the tenant’s right to remove it.

Were any of the items chattels?

The Court in fact considered certain of the items to be chattels. This included an item known as a “regulator” which weighed 50 tons and two transformers each of which weighed 100 tons. Although they were large and heavy items the Court considered that they rested only on their own weight and were therefore not attached to the land.

The Court considered that the fact the items were bulky and awkward and that severance was complex, did not necessarily mean the item could not, as matter of law, be removed by the tenant, as a tenant’s fixture.

Non-removeable fixtures

The Court did hold that a gas fired furnace, consisting of a steel framed brick built structure fixed to the floor with a basement underneath was a non-removable item because it would be substantially destroyed in the process of removal.

Tenant’s removeable fixtures

However the Court considered remaining items could be removed without damage to themselves, without losing their usefulness and without damage to the remainder of the property. Among the items the Court considered filled the definition of removable fixtures was, a furnace weighing 195 tons and associated fixed plant.

The Court did not accept that the lease prevented the tenant’s right of removal. The Court took the view there was a considerable difference between a landlord incurring the cost of constructing and equipping a building and the tenant having to construct and equip a building at its own expense, albeit under the obligation of the landlord.

The obligation to construct the plant did not mean that in law the fixtures were not removable by the tenant or were to be regarded as landlord’s fixtures. On that basis the Court found that the tenant was entitled to remove all items classed as chattels or as removable tenant’s fixtures.

Conclusion

What this case does show is that the Court is willing to consider items of considerable bulk and complexity as chattels or tenant’s fixtures. It should be noted that in respect of some of the larger items of the plant equipment, experts had estimated it would take 12 to 18 months to remove them from site at a likely cost of £3 million to £4 million. The removal would be extremely complicated and would require tenders from specialist contractors. However the Court have shown that this does not mean that the item cannot in law be removed as a tenant’s fixture.

Whilst clearly it is unlikely that in most buildings, items will be found of quite such a size and complexity to remove, it is worth considering when the tenant wishes to remove an item quite how far the Court will go in applying the legal principle, and whether a landlord should resist the removal, particularly if this will detract from the value of the property, or the item is valuable in itself.

One final note of caution in respect of the Judgment is that it has been appealed. The period set for the hearing is between 18 December 2013 and 22 April 2014. As such this area of the law is open to revision. However at the time of writing it is good law.

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