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Property Law Journal: 13 June 2011

Nathan Searle and Kate Wilford explain the importance of watching out for potentially unenforceable penalty clauses and suggest some ways of tackling these issues.

A penalty is a clause designed to deter a breach of contract, by providing for a breaching party to pay (or forfeit) a stipulated sum to the innocent party upon breach of contract.

Rollits LLP

David Myers assesses a planning case where a blatant attempt to disguise a residential home as a barn proved to be ultimately unsuccessful

On 6 April 2011 the Supreme Court in the case of Secretary of State for Communities and Local Government & anor v Welwyn Hatfield Borough Council [2011] reversed the Court of Appeal’s decision (Welwyn Hatfield Borough Council v Secretary of State for Communities and Local Government and another [2010]) and, in doing so, set aside the grant of a certificate of lawfulness of existing use for a building that was constructed to look like a barn, but was fitted out internally as a residential dwelling.

Gowling WLG

Sally Farrall exposes the problems inherent in attempting to register land as a village green when it has already been appropriated by a local authority for planning purposes

The tension between proposed developers of land, on the one hand, and local recreational users of that land, on the other, is a familiar one.

Who owes responsibility, and how is any defect best resolved? Andrew Philip analyses the options

Generally, when we purchase cars, home entertainment systems and other high-value or complex goods we do not expect there to be any faults in them and, in the unlikely event that problems do occur, we usually have a robust guarantee to call upon in order to get the problem resolved. However, there appears to be an implicit acceptance that when you buy newly or recently constructed buildings there will be defects and there is no guarantee that these will be resolved without significant expenditure by the owner. Indeed, standard form construction contracts anticipate that there may be defects to a value of 1.5% or more of the original contract value; this is reflected in the defects rectification and retention provisions of such contracts.

Boyes Turner

John Starr reviews the current state of play on Tolent clauses as well as a case concerning the calculation of an architect’s fees

The wheels of justice may grind slow, but you would at least expect them to grind accurately when the wording of an Act of Parliament has been under discussion for several years. However, this may not be the case.

Nabarro LLP

Keeley Ellaway explains why preparation is key to a fast and efficient sale when dealing with property subject to a rentcharge

If a seller’s title is not kept clean and up-to-date, a sale can become protracted, leading to increased time and costs for the seller. One item of good housekeeping that can be dealt with is rentcharges. Under the Rentcharges Act 1977, a rentcharge can be redeemed. By redeeming a rentcharge that appears on the title, the seller can avoid unnecessary queries from the buyer and delays in the sale process.

Forsters LLP

Purchasing the freehold of a building can have added complexities when the building concerned is a mansion block. Lucy Barber looks at a case that brings hope to tenants

It is commonly the case that mansion blocks of residential flats are made up of individual terraced sections with their own entrances and common parts. For example, a mansion block may comprise 50 flats but they are made up of five separate terraced sections of ten flats, each section with their own entrance and hallways, etc. For the purposes of maintenance and repair the block will usually be treated as one building of 50 flats and the leases will provide that each tenant in the block pays a fixed percentage towards the service charge. If the tenants of the building wish to exercise their rights to purchase the freehold of the building by way of collective enfranchisement, pursuant to the Leasehold Housing and Urban Development Act 1993 (as amended), there is often a query as to whether the tenants have to enfranchise the whole building of 50 flats or whether they can simply enfranchise their own separate section.