Important Information for Property Professionals in 2022
It’s not easy being on the razor’s edge of the property landscape, so keeping ahead of things is important for any property professional. Let’s cover what you can expect in 2022 on that front:
Building Safety Bill
Residential developers will need to pay special attention to how the Building Safety Bill is going through parliament. The bill intends to introduce fundamental changes to the approval, design, construction and occupation of taller residential buildings. It’s meant to weave fire safety forms as a key thread through the whole lifecycle of a building. With recent government announcements showing the provisions of the Bill will be extended, making developers liable in case of defects in the construction of existing buildings built in the last 30 years, you should pay close attention.
Cladding Remediation Expenses
Even though the government has introduced measures protecting residential tenants in buildings of 18 metres or more in height, the residential tenants in buildings falling between 11-18 metres have not been protected so far. The government announced that developers will need to engage to establish a £4 billion fund meant to meet the costs of remediating such buildings. Legal measures will be undertaken if developers fail to meet these expectations.
Residential Developer Property Tax
The new Residential Property Developer Tax has come into place from 1 April 2022. The tax applies to companies with residential development profits that exceed £25 million annually. The allowance may be allocated between different companies in a group, but if the profits exceed that, the allowance will be taxed at a 4% rate.
Land Control Register
In 2020, the government issued a consultation on proposals for a public register of land agreements that give developers more control over the future development of their land. The outcome was still awaited and may be resurfacing in 2022.
Coronavirus Rent Arrears
The Commercial Rent (Coronavirus) Bill was scheduled to become law before 25 March this year. The bill is meant to ringfence arrears due from tenants who became subject to mandatory closures during the pandemic. Whilst they would still be subject to the ring-fencing provisions, the landlords may continue to be subject to the moratorium on exercising legal remedies to recover any unpaid rent.
The bill aims to introduce provisions for arbitration on how much can be settled, if any rent should be paid for the closure period and when that should be done. The landlord or tenant may request arbitration, but if neither party applies for that within six months of the Bill becoming law, the rent arrears will stop being ringfenced. They will be subject to the normal recovery procedures if not paid by the tenant. For existing rent arrears agreements between tenants and landlords, no opening will be possible under the new provisions.
Use Classes Order
In January 2022, the Court of Appeal rejected an appeal by Rights: Community Action regarding the validity of the changes introduced by the government to the Use Classes Order in September 2020. The ongoing uncertainty of that made many commercial lettings landlords continue to refer to permitted uses by reference to the Class A and Class B uses for hospitality, retail and office lettings.
Landlord and Tenant Law Consultation
Last year, the government made a promise to launch a consultation on commercial landlord and tenant law. The initial date for that consultation was supposed to be around the autumn of 2021, but that didn’t happen. There was no further date being announced for the consultation, but it is expected to herald a shake-up in the commercial landlord and tenant law.
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