Real Estate Bulletin - May 2023

Renters (Reform) Bill - The end of the road for ASTs...

On 17 May 2023 the Renters (Reform) Bill (the Bill) was introduced into Parliament.  The proposed legislation provides for significant reform of the residential private rented sector in England.

Measures in the Bill include:

• Abolishing assured shorthold tenancies and section 21 'no fault' evictions.
• Moving to a system of assured periodic tenancies with annual rent review (subject to a tenant appeal process). Tenants will need to provide not less than two months' notice when leaving a tenancy.
• Reforming possession grounds. Landlords will only be able to obtain possession on grounds which are set out in the legislation and must give statutory notice.
• Introducing a new Ombudsman scheme that private landlords must join.
• Introducing a new Property Portal including a database of residential landlords and privately rented properties in England.
• Giving tenants the right to request a pet in their property, which the landlord must consider and cannot unreasonably refuse (pet insurance will be required to cover any damage to their property). 

You can read more about these proposed measures in our Q&A here. 

Winds of change - A story told by the CLLS Certificate of Title 8th Ed.

Earlier this month, the CLLS published its updated certificate of title. The periodic updates are intended to ensure the form of certificate (which is used on real estate financings to provide lenders with an overview of the properties they are lending against) reflects current market practice. As such the statements contained in the certificate are a form of benchmark for assets, with borrowers disclosing where their assets depart from this form.

You can read more about the latest update here.

Retrospectively approving an option to tax

The FTT has held that a taxpayer was not entitled to appeal against HMRC's decision to approve retrospectively an option to tax made by the taxpayer: Rolldean Estates v HMRC [2023] UKFTT 359. In any event, the taxpayer was estopped from raising the argument that the option to tax was not valid by virtue of its own conduct in confirming (incorrectly) that no exempt supplies had been made in relation to the relevant property.

In addition, the FTT held that the fact that the relevant power to treat an option as valid in such circumstances did not come into effect until after this option was exercised did not prevent HMRC from applying it to the option with prospective effect.

You can read more about this case here.