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Property Law Journal: 25 March 2013

Defaulting borrowers and shortfalls from subsequent sales have become increasingly common in the current property market. Who is responsible for these losses? The negligent valuer, or the lender itself? Nicola Stanley investigates

Following the combined effects of the credit crunch and the slump in the property market since 2007, lenders have been faced with losses arising from defaulting borrowers and shortfalls from subsequent sales in possession.

Forsters LLP

Hannah Kramer examines whether the DECC’s proposals will create a simplified CRC

On 10 December 2012, the Department of Energy and Climate Change (DECC) published their response to the March 2012 consultation on proposed changes to the CRC Energy Efficiency Scheme (CRC) and confirmed that the CRC is here to stay, albeit with some modifications. The consultation sought to address stakeholders’ various criticisms, which argue that the CRC is overly complex, creates a significant administrative burden and associated costs, and fails to reflect the organisational and operational realities of different trust and corporate structures. Notably, the landlord and tenant rule, which treats landlords who provide energy to their tenants as responsible for that energy supply, has been criticised for failing to reflect the reality of the commercial rental market.

Tessa Blunden and Romola Parish tell the story so far of the role played by the Localism Act 2011 in the efforts of a group of Nunhead residents to save a much-loved local pub, The Ivy House

The Ivy House sits at the top of Peckham Rye Park. It has a beautiful 1930s interior, complete with original Truman’s branding and a 1930s music hall stage, which has hosted stars such as Elvis Costello and Ian Dury. It has a rich musical heritage and provided a much-needed space to meet and socialise (see the photos on p9). In Spring 2012 the news broke that the pub’s owner, Enterprise Inns, had given the popular management team a mere five days’ notice to quit the premises. Local residents mobilised immediately to save The Ivy House as a pub.

Sue Thompson assesses the Supreme Court decision in Daejan

On 6 March 2013, The Supreme Court handed down its eagerly awaited judgment in Daejan Investments Ltd v Benson [2013]. By a majority decision (3:2) the court overturned the earlier decisions of the lower court and tribunals and granted the landlord dispensation from the statutory consultation requirements imposed by s20 of the Landlord and Tenant Act 1985, upon terms.

Ruth Hughes considers the requirements of actual occupation and the level of involvement in a mortgage grant that will prevent a co-owner from claiming priority over the mortgagee

The scheme of the Land Registration Acts is to hide certain minor interests in land (including beneficial ownership) behind the register so that the purchase is unconcerned with these interests and will not be fixed with notice of them. In some limited circumstances these minor interests take priority despite a registered transfer of the estate. One of these situations is where a person in actual occupation of the land has an otherwise unprotected interest. A situation that arises commonly in practice is where a home is owned by one party but there is an informal trust arrangement between the parties, for example a common intention constructive trust (see Oxley v Hiscock [2004] cf.Stack v Dowden [2007] and Jones v Kernott [2012]). Where the land is owned by two legal owners, their charge will overreach the co-owners’ beneficial interests and transfer these to the equity of redemption (see City of London Building Society v Flegg [1988], ss42(1)(b) and 44 of the LRA 2002 and s58(3) of the LRA 1925). However, overreaching will not occur when there is only one legal owner (see Williams & Glyn’s Bank v Boland [1980]).

Nabarro LLP

Sarah Frost and Lisa-Marie Davison summarise key characteristics of residential tenancies and the measures required to achieve vacant possession

By definition, an investor in commercial property should not need to worry about residential tenancies. However, mixed-use buildings are surprisingly common, particularly in towns and cities, and a predominantly commercial investment with even a small residential element can be an expensive trap for the unwary investor. The implications for a purchaser of a mixed-use building will depend largely on the type of residential element involved.