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Property Law Journal: March 2016

Sandra Jones explains best practice for avoiding liability for flooding to another’s property

Flooding has been in the headlines again this winter with large parts of the UK being hit by devastating floods, following a series of storms and extended periods of extreme weather. Most projections suggest that such weather conditions are likely to become increasingly common. Property owners and their insurers are again counting the financial cost of such events, with current estimates indicating that the cost of recent floods is likely to reach £5bn.

Morayo Fagborun Bennett considers whether the higher-rate stamp duty will slow down the residential property market

A property investor considering a buy-to-let investment will already be aware that such an investment is subject to stamp duty land tax (SDLT) upon purchase of property over a certain value, that income tax is payable on any rent received, and that capital gains tax will be payable on any profit made, over the statutory allowance, if the property is subsequently sold. Such an investor will also know that from 2017, those who have mortgages on their buy-to-let properties, who are higher-rate taxpayers, will not be able to deduct the costs of their mortgage interest from their rental income when they calculate the profit on which to pay tax. The small-scale property investor will know that this change will substantially increase the amount of tax payable on mortgaged buy-to-let properties.

The Supreme Court has issued a landmark judgment on penalty clauses. Paul Joukador, Nathan Searle, Jane Dockeray and Ingrid Stables discuss the implications

In its judgment in the combined cases of Cavendish Square Holding BV v El Makdessi; ParkingEye Ltd v Beavis [2015], the Supreme Court has formulated a new test for determining if a clause is an enforceable liquidated damages clause or an unenforceable penalty clause.

Nabarro LLP

Michael Smart examines a case that indicates the court’s current approach towards valuing disrepair and reinstatement

In the recent case of Consortium Commercial Developments Ltd v ABB Ltd [2015] (Consortium), Andrew Bartlett QC (sitting as a deputy High Court judge) reiterated the correct approach to valuing disrepair and reinstatement in a landlord’s claim against its former tenant for terminal dilapidations.

Dentons

Michele Vas assesses whether regeneration is all when it comes to compulsory purchase orders

Regeneration is one of the government’s priorities; it continues to make grants and loan funding available to deliver infrastructure which will aid the delivery of regeneration. Compulsory purchase is one of the tools available to the public sector to secure the regeneration of its areas. It is unusual for compulsory purchase orders (CPOs) not to be confirmed by the Secretary of State. CPOs are judged to facilitate regeneration, which then satisfies the requirement that there is a compelling case in the public interest for making and confirming a CPO. However, is regeneration in any form, regardless of the qualitative merits of the scheme, enough to meet the public interest test?

The Deregulation Act 2015 significantly changes the law on tenancy deposit schemes, retaliatory evictions and section 21 notices, warns Scott Birchall

The Deregulation Act 2015 (the Act) received royal assent on 26 March 2015 and amended provisions in both the Housing Act 1988 (HA 1988) and the Housing Act 2004 (HA 2004).

Malcolm Dowden looks at how the internet of things may shape real estate and the relationship between landlords and tenants

Futurologists have for decades been predicting the upending of the commercial real estate market by technology. Based on those predictions, the proliferation of internet connectivity should by now have made office blocks obsolete, overtaken as the norm by home-working and digital nomads. Physical retail space should, by now, have been transformed into leisure destinations, combining showrooms serving online retail with a range of family activities. Landlords’ income streams for those shopping destinations should by now be based on customer entry fees, while commercial rents in that sector should have been consigned to the past. That, at least, was part of the picture outlined by the Financial Times in February 2000.

John Starr

John Starr highlights the dangers that come with professionals, such as an architect, providing free advice to friends and neighbours

All professionals are tempted, from time to time, to lend a helping hand to friends and neighbours. Most of the time, it is not intended that any liability should attach to them in respect of it – it is just a matter of doing someone a favour. What happens, however, when the favour goes wrong and the friend or neighbour suffers loss as a result? In a recent case in the Technology and Construction Court, the judge decided that a professional can owe a duty of care even where there is no contract in existence and no remuneration is paid.