Recent Changes in Property Law

Last year the Property Law Act 2007 came into force, replacing the 1952 Property Law Act and several other related acts, including a number of old English ones going back as far as 1257.

It has been described as the largest single change to property law in the past 55 years and is the culmination of a project that took over 16 years.

The aim of the Act is to create modern, more user-friendly legislation for people buying and selling property, mortgaging their property to raise finance, or entering into commercial leases of land.

Not everything in the Act is new, some parts of it repeat or codify the existing law. The following highlights some of the changes that have been introduced.

Landlord's Consent

If a tenant asks a landlord for permission to transfer or sub-lease premises to a third party, or to change the permitted use of the premises, the landlord must not unreasonably withhold consent. The landlord must respond in writing within a reasonable time. If consent is given subject to conditions or is withheld, the landlord must give reasons for their decision, if asked to do so by the tenant.

A range of parties affected by the decision may claim damages from a landlord if they suffer loss as a result of the landlord unreasonably delaying or withholding the landlord's consent.

Insurance Protection for Tenants

If the premises are damaged by an insured risk (e.g. fire, flood, explosion) the landlord and the insurers may not require the tenant to pay for the repairs. This is so even if the damage was caused by the tenant's negligence.

Distraint

The Distress and Replevin Act 1908 enabled a landlord to enter premises and seize certain chattels of the tenant if the rent was in arrears. This self-help remedy has been abolished.

Sale and Purchase - Return of Deposit

A purchaser of land now has a statutory right to apply to a Court for the return of the purchaser's deposit. The surrounding circumstances must be such that a Court would not order the purchaser to perform the contract and also that the purchaser has no right to cancel the contract.

An example could be where there is a defect in the property that the purchaser was not aware of until after signing the contract and paying the deposit.

The Court is also given the power to cancel the contract and declare that the purchaser has a lien on the land to secure payment of the refund.

Conclusion

The Act affects many facets of the law relating to property. It includes leases, sales and purchases, mortgages, access to land and special powers of the Court.

Chances are, if you are dealing with land in any way, the Act will affect you. With such a major law change, it is more important than ever to obtain property advice at the outset of any transaction.

We are always happy to receive enquiries concerning property and related issues.