Property litigation weekly update - 5 February 2021

05 February 2021

In this week's bulletin we look at the last minute changes to practice direction 55C, the case of Croydon London Borough Council V Chipo Kalonga (2021), leasehold reform and the consultation on the Electronic Communications Code. All this along with the insights from across the firm and positive news stories.

Last minute changes to Practice Direction 55C

We previously reported that there had been last minute changes to PD 55C.

On the afternoon of 29 January 2021, when the Reactivation Notice deadline was due to expire for possession claims brought before 3 August 2020 and for stayed claims where case management directions had been made before 20 September 2020, the Government extended the deadline to 30 April 2021. After this date, a possession claim will be stayed automatically, and a party will have to file an application using form N244 asking the court to lift the stay.

PD 55C was due to expire on 28 March 2021 but has now been extended to 30 July 2021.

Another important point to note is that on 20 January 2021, form N244 was updated to incorporate a new Statement of Truth and this must be used when any application is made (until any new update is implemented).

Croydon London Borough Council v Chipo Kalonga [2021]

The Court of Appeal has ruled a flexible secure tenancy can only be terminated by a landlord, during its fixed term, if it has an express forfeiture clause and a section 146 notice is also served.

Local authorities have granted thousands of flexible tenancies and many will have obtained possession orders on the basis that a forfeiture clause is not necessary and all that is required is a compliant Notice of Seeking Possession served under section 83 of the Housing Act 1985. As a result of this decision it is now imperative local authorities protect themselves by having fixed term tenancy agreements which contain forfeiture clauses.

Leasehold Reform – the unknown period

Following the government's announcement regarding leasehold reform in January as reported here, many leaseholders are left in a difficult position.

Although the announcement confirmed the government's position on some central elements of the reforms, being the abolition of marriage value and confirmation of 990 year lease extensions, there is no timescale or sight of when the provisions may become law. There is also no detail on the wider comprehensive proposals of the Law Commission. There is a great deal left to confirm.

Leaseholders with current claims may be considering whether they should withdraw their claim and re-submit once the reforms are in, especially where there is to be a payment of marriage value. Equally, leaseholders coming up to the 80 years remaining mark will need to decide whether to make a claim or hold off. There is a potential benefit of waiting for a potential discount in premium but this must be balanced against the risk of a diminishing lease term, increasing costs and the prospect of reforms that are not guaranteed to take place. Some will have the pressure of selling or realising an investment which will force their hand, but for many there are likely to be difficult decisions to make at this point in time.

Consultation on Electronic Communications Code

On 27 January 2021, the Government launched a consultation about potential changes to the Electronic Communications Code ("the Code") following feedback from various stakeholders that it is not having its intended effect.

The consultation, which closes at 11.45pm on 24 March 2021 and is available here, identifies a number of key issues relating to how the Code operates, sets out ways in which the issues could be addressed and seeks feedback on the scope of proposed changes.

Those issues include:

Obtaining and using Code agreements

The consultation identifies various factors which it says impede the use of Code agreements. Solutions, it says, include facilitating faster negotiations, providing efficient ways for disagreements to be dealt with,To achieve these aims, the Government is considering the introduction of, for example, an Alternative Dispute Resolution Scheme, a fast track court procedure and a statutory process for complaints about non-compliance.

Upgrade and sharing rights

Automatic rights are given under the Code for operators to upgrade their own apparatus installed after December 2017 and share it with other Code operators, provided certain conditions are met. However, the consultation identifies situations where disagreements and uncertainty around these automatic rights is resulting in protracted negotiations.

To address this, the Government intends to review when the automatic upgrade rights should be available and how they might be clarified. It is also clear that circumstances where the conditions for automatic upgrade rights are not met will be considered together with the merits of introducing limited retrospective sharing rights relating to equipment installed pre December 2017.

Renewing expired agreements

The consultation identifies ambiguity around when Part 5 of the Code (which allows an operator to continue to exercise Code rights after the expiry of the term of the Code agreement) applies. This, it says, is giving rise to a perception that the Code does not encourage prompt negotiations for renewal agreements.

The consultation proposes to consider how expired agreements can be renewed (and the difficulty of doing so), why there is a need for greater certainty around what happens when an agreement comes to an end and greater consistency in the way disagreements around the renewal of Code rights are dealt with.

To achieve this, it is suggested that Part 5 of the Code could apply to all cases until either modified or terminated, that a mandatory 6 month time limit could be introduced in which all Code disputes should be heard and that a procedure allowing either party to request an interim order for a renewal request could be introduced which would also allow a court to backdate any financial terms to the date of that request.

Details on how to respond can be found in the consultation document and we anticipate that the Government will produce a full consultation response outlining their position in due course.

Until any further changes to the Code are implemented, some clarification for landlords has been provided in the recent Court of Appeal case of CTIL v Ashloch (2021). This confirmed that an operator holding a lease with security of tenure under the Landlord and Tenant Act 1954 may only renew that lease in accordance with that Act. A more detailed overview of that case can be found here.

Insight from our colleagues around the firm

Good news stories

Preliminary results of study into the Oxford- AstraZeneca vaccine show that a single does may reduce transmissibility of coronavirus by up to 67%. While the results are preliminary, they currently show that each person receiving the vaccine will indirectly protect those around them.
Love Island "influencer" Dr Alex George has been appointed as young mental health ambassador. The Love Island Star and A&E Doctor, has been campaigning for better mental health provisions. Dr Alex has always been an advocate for mental health, but has said losing his brother to suicide has galvanised his passion for the campaign. Dr Alex wants to work with the government to make mental health an absolute priority and to make meaningful change in this area.
A record one in three UK students gained a first-class degree in 2020. This news comes as a result of Universities implementing a "no detriment" policy to exams due to the impact of covid-19.
A record half a million people have taken part in veganuary this year. The surge comes as more supermarkets are offering vegan based alternatives to many meat products. A study by the University of Oxford has concluded that more plant-based diets is the biggest way to improve our health and that of the planet.
A 4 year old girl has discovered a 2 20 million year old dinosaur footprint on Bendricks Bay beach in Wales. Experts believe the foot print was created by a two-footed dinosaur and is one of the most well preserved dinosaur footprints found in the last decade. The footprint will be taken to a national museum in Cardiff, so it can be enjoyed by future generations.