Aron Heywood in our property litigation team has produced an update on the recent changes to the options available for commercial rent arrears recovery following the enactment of the Commercial Rent (Coronavirus) Act 2022.  For many landlords of commercial property the new legislation will be a welcome development allowing them to recover possession of their property and to recover up to two years’ of outstanding rent.

You can download the article here

If you need any help with anything you contact Andrew Haffner, David Bondt, Roger Rubin or Aron Heywood or call us on 0161 832 2500.

Article by Avi Barr – Secured Lending and Property Partner and Head of the London office of BBS Law

Auction sales tend to be a great way of disposing of tricky properties. It may be a shop in prime retail territory with a rapidly weakening tenant covenant or a challenging development site.  You would think that any buyer at an auction ought to know that what you see is not necessarily what you are going to get. However, a recent High Court case has tipped the balance strongly in favour of careless buyers by placing a surprisingly strong responsibility on sellers at auction and auctioneers to ensure that any defects are clearly pointed out to bidders.

The High Court case in SPS Groundworks and Building Ltd v Mahil involved Mr Mahil who purchased a piece of land for £130,000 at auction.  The land had development potential but was subject to overage provisions (additional payments normally to the seller contingent on future events).  The overage deed was included in the pack and the title even had reference to the overage arrangement.  However, Mr Mahil had not downloaded the legal pack and there was no mention within the auction particulars of the overage, nor did the auctioneer make any reference to the overage during the auction itself.  Mr Mahil decided not to complete and was then sued by the seller for his loss.  Although the initial County Court decision came up with what most of us would expect to be the anticipated decision in favour of the seller on the basis of, “caveat emptor”, being the very basic principle that any buyer ought to be aware of what they are buying, the High Court took a different view and actually agreed with Mr Mahil that the initial decision was wrong in law to conclude that the seller had fulfilled its duty to disclose the defect in title by simply including it in the legal pack.

The High Court decision will definitely be a surprise to many but underlines the importance when listing properties for auction (particularly where parties may be bidding unrepresented) to ensure that there is proper disclosure of any defects and its conclusion was that standard contractual conditions and auction disclaimers could not be relied upon to save the seller where a defect in the property was not clearly brought to the attention of prospective buyers.  A purchaser was entitled to assume, in the absence of any clear signposting to the contrary, that entries on the property register were not problematic and that the lot itself was being sold on a standard basis and in this case, the seller had failed to clearly draw sufficient attention to the overage.

For both buyers and sellers, auctions can be minefields and this decision creates even more uncertainty.  How much more did the seller have to do here? Is it necessary to have every defect clearly stated in the catalogue or announced by the auctioneer in the room. In some cases that would defeat the point of selling at auction at all.  If you are a seller, do make sure that you have clearly presented your lot to avoid any claims based on a failure to disclose material issues.  If you are buying at auction, particularly where development may be involved, do ensure that you at the very least download and review the pack and almost always it will be the right thing to do to have a sufficiently skilled solicitor review the pack on your behalf before you enter the bidding.

The start of October heralds a gentle resumption of winding up petitions against companies being available but not if you are a landlord!

The most notable change to the pre-Covid position is that there is a temporary increase in the amount that must be owed from £750 to £10,000.  In addition you will not be able to present a petition before you have sought proposal proposals for payment from the debtor and given them 21 days for a response. The government clearly is seeking to protect small businesses by giving them every opportunity to negotiate their way out of financial trouble.  The Government has made clear its intention to continue protecting the two types of debtors that have been hit particularly hard by Covid-19, small businesses and tenants.

As a result, unfortunately, landlords will not yet in reality benefit from the re-introduction of winding up petitions. This is in line with the continuing suspension of forfeiture and the effective suspension of Commercial Rent Arrears Recovery (“CRAR”), by requiring that the minimum net unpaid rent that must be outstanding before CRAR can be used is 554 days.

Landlords need to be particularly aware of the new concept of an “excluded debt” – one for rent that a tenant is liable to pay under a relevant business tenancy in England and Wales, which is unpaid by reason of the financial effect of coronavirus.  It would seem the only chance a landlord has of bringing a successful winding up claim against a tenant (or corporate guarantor) would be if the landlord can prove that the rent is unpaid because the tenant is taking advantage of UK Government policy to help with its cash flow (remembering arrears still must be more than £10,000 and the debtor must be given 21 days to offer a payment plan). Seemingly landlords face an impossible task of proving that Covid has not caused a tenant’s financial difficulties. Good luck with that one!

It is worth noting that the restrictions do not, though, give protection to individual debtors from personal statutory demands and subsequent bankruptcy proceedings.  However, with the current backlog for hearing petitions, this solution may be not as efficient as it once was.

Avi Barr is a partner at BBS Law specialising in Commercial Property and Property Finance and is head of the London office.  Avi can be contacted by email here.

The inclusion of a few words in a property contract can ensure that the buyer receives the benefit of implied covenants under the Law of Property (Miscellaneous Provisions) Act 1994. The phrase, ‘The Seller sells with a full title guarantee’ indicates that the Buyer will be able to rely on all the covenants implied under the Act. But if the Seller only offers “limited title guarantee’, the Buyer would get only a lesser level of assurance. In some cases, the Seller may state that it does not give any guarantee.


When you are selling your property, or someone is selling to you, with Full Title Guarantee the following is implied:

  1. That the person selling has the right to sell the
  2. That the Seller will, at their own cost, do all that they reasonably can do to ensure the buyer will acquire a good title to the
  3. If the property which is being sold is registered, then it is presumed that the whole of that property in the registered title is being disposed
  4. If the property being sold is a leasehold property additional covenants are implied, which are, that the lease is still in existence and the Seller has complied with all the terms of the
  5. If the property being sold is unregistered then it is presumed that the interest being sold is the freehold. If it is clear that the property being sold is leasehold then it is presumed that the interest being sold is the unexpired term of the
  6. The person is selling the property free from all mortgages and all other rights and interests which may be exercisable by a third party other than those which the seller does not and could not reasonably be expected to know


This is used where the Seller of the property has no personal knowledge of the property. This is most often used in the case of a sale by an Attorney, the Executor of an Estate, where the property has been repossessed or by a Trustees or a Personal Representative.

The person selling cannot guarantee that the property is not subject to any financial charges, nor can they guarantee whether there are any rights over the property or give information on what rights there could be. They are unable to confirm whether there are any covenants which may affect the property.


Receivers or mortgagees selling a property following repossession usually have little or no knowledge of the property being sold and it is normal for them to give no title guarantee. The danger is that there may be something that the Buyer cannot discover on an investigation of title that the Seller has not told him about (for example, an overriding interest). If this happens, the Buyer has no recourse against the Seller.

A thorough investigation of title is essential before an auction or private treaty purchase circumstances where only limited or no title guarantee is offered to decide whether the Buyer should take out defective title insurance or whether there are any incurable title defects.

Note: This guide is for general information purposes only. If you require any further information or have a specific query you can contact our Property Team. Our Partners, Daniel Berger ( and Avi Barr ( will be happy to assist.

By Avi Barr

For Landlords of commercial property, a very important deadline may be looming. It is relevant if you have a former Tenant or former Guarantor who you are still able to pursue under your Commercial Lease for any arrears. 

Click here for a downloadable version of this article.

Under the relevant legislation (Section 17 of the Landlord and Tenant Covenants Act 1995) a former Tenant and their Guarantor are released from any liability if six months passes beginning with the date that any arrears fell due. If you fail to serve the Notice you will lose, forever, any right to claim those arrears from the former Tenant or Guarantor. With the number of commercial leases currently in arrears due to Covid consequences affecting finances for many tenants this issue is a really significant one at the moment.

In most Commercial Leases rent is paid on the traditional quarter days which would mean that any notice served in respect of the June quarter (in many cases in this unique year the first incident of rent not being paid) will expire 6 months after 24 June, on 23 December. Therefore, if you do want to retain your right to collect any rent for the June quarter (and the September quarter can be dealt with at the same time) you need to serve your Notice by 23 December 2020.

“It is important to also check the Lease for the requirements for service of any Notices as a failure to serve the Notice correctly could cause any Notice to be invalid.”

Even if your Tenant is on a payment plan it would still make sense where there is a former Tenant or Guarantor that you can claim from to serve the Notice. The Notice has a prescribed form, and it specifies the amounts due within the 6 months beginning from the date when the liability arises. The Notice informs the Tenant or Guarantor about the liability and protects the Landlord’s right to seek payment.

“ Section 17 Notices dos not need to be served on Guarantors of existing Tenants.”

One unwelcome consequence to bear in mind of serving a Section 17 Notice is that in theory the recipient if they do pay the arrears would be entitled to claim an Overriding Lease. This would be a Lease in similar terms to the existing Lease but for a few days longer. That Lease would sit between the Landlord and the current Tenant thereby creating a new Landlord and Tenant relationship between the existing Landlord and the previous Tenant or Guarantor. The benefit to the Tenant or Guarantor of taking this step is the ability they then have to control the process and enforce payment or take steps to terminate the Lease in with the occupier. There may therefore be some circumstances in which serving the Section 17 Notice could trigger unexpected or undesired consequences and therefore careful thought should be given before the Notice is served.

All in all, any Landlords who have potential claims against former Tenants or Guarantors should carefully consider their position and ensure that Notices are served as soon as possible to protect any existing claims.


By Matthew Owen

Retail Prices Index (RPI) linked rent review clauses have become more common in recent years, adopted in residential long leases following a pushback against fixed ground rent increases and in commercial property leases as a welcome alternative to provide some rental growth.  With Covid19 likely to depress values particularly in the retail sector many landlords will be looking at RPI increases to create some assurance of steady rent increases.  However, this week could spell the end for RPI.

RPI is a measure of inflation utilised throughout the UK.   However, the ongoing Government consultation may mark the beginning of the end of the RPI liked rent review.

A House of Lords report into the RPI highlighted concerns with the way that the UK Statistics Authority (UKSA) calculate RPI, specifically that the divergence in the rates between RPI and Consumer Prices Index was resulting a difference of 1% per annum. The report contained the following proposals:

  • The publication of RPI should cease; and
  • During the period which the legislation is being negotiated RPI should be aligned with the Consumer Prices Index including owner occupiers’ housing costs (CPIH).

In response to the publication of this report, the Government announced a consultation with UKSA, which commenced on 11 March 2020, to review the proposed alignment with the CPIH and other technical matters concerning the implementation of the proposal.  The result of the review is due this week and it is likely that the RPI will be discontinued.

Clearly any changes to the way RPI is calculated would have wide-reaching consequences for property rents potentially reducing the increase in property rents by 1% annually.

Abolishing RPI will cause serious legal concerns potentially resulting  in some rent review clauses becoming redundant.  It is certainly not too early to try and do something about it.

While the implementation for the alignment of RPI with the CPIH index is targeted to take place between 2025 and 2030 it is important to ensure any index linked rent review clauses are drafted with the change in mind. Properly drafted leases should include the replacement of the index where RPI is abolished or a material change in the calculation of the index. Another complimentary approach where an alternative index is going to be adopted would be to introduce a “cap and collar”- which dictates the minimum and maximum increase, which would prevent Landlord losses in the event that RPI is significantly reduced.

Despite the RPI alignment causing apprehension in respect of existing leases, it may well be beneficial in new leases for alternative interest indices, such as CPIH, to be adopted to replace RPI for index-linked rent reviews.

With a first rent review in a commercial lease likely to be five years’ away it is worth paying some attention to the basis of review when negotiating your terms.

Matthew Owen is a solicitor in our Commercial Property team.  If you wish to discuss this article or any aspects of commercial property transactions you can contact Matthew by email or phone (0161 302 8399).  You can download a PDF of this article here.

BBS Law’s commercial property team has recently acted on the sale of a highly sought-after retail parade in Swindon. 

Lead by Senior Associate, Eoin Murphy the team exchanged on the sale of Sussex Place in Swindon within weeks of instruction.  The parade includes units with notable national occupiers including Subway, Barnardo’s and Rowlands and is anchored by a Co-operative convenience store.  PK3 were the agents representing the Seller.

The BBS Law London property team led by Avi Barr and Craig Mullen has acted for (med)24 on its Lease of its flagship facility in Paddington.

(med)24 is a newly established private membership health service which will offer a revolutionary approach to healthcare. Its one-stop shop facility in prime central London will enable its members to receive first class primary medical care, from GP appointments and health assessments to online consultations and specialist referrals. With state-of-the-art technology and an inspiring interior to match, its members will benefit from an unsurpassed customer experience.

Commenting on the Lease transaction itself, Avi Barr, Partner in the BBS London office, said:

”It has been a pleasure working with the management team at (med)24 including Jonathan Kron and Ahmad Al-Hamad. Their aspiration to create a high level of service matched with our desire to provide a similarly specialist approach allowing us the opportunity to add value to (med)24 by working on its behalf to ensure that its objectives for the premises were met in a timely manner”.

By Avi Barr (Property and Secured Lending Partner)

The Government has just introduced new rules allowing blocks of flats to be extended upwards by two storeys to create new homes without the need for planning permission. The changes come into force on 1 August.   With the ability to develop airspace without the need for planning permission, opportunities will arise for many property owners and developers.

This article looks at some of the important elements to be considered when undertaking airspace development.  (You can click here for a downloadable version.)

  • Summary of the recent changes
  • What makes airspace developments different?
  • Planning
  • Construction considerations
  • Thinking about the services
  • Overview of legal issues
  • Checking the lease
  • Tenant’s rights of first refusal
  • Enfranchisement

Airspace development is not simply the domain of institutional property owners, as freehold owners of multi-occupied properties (whether owners of a building subject to long leases, or indeed residents in blocks of flats with shared ownership) are also increasingly finding ways to exploit value in their properties.  Many developers and block owners will be looking at this new opportunity to convert unused airspace above existing blocks into something more valuable.

What are the recent changes?

The rules state that the right is restricted to buildings of three storeys or more in height and the extended building must not be more than 30 metres in total height. Meanwhile, the height of the extension cannot be greater than seven metres compared to the highest part of the existing roof, while any new storeys must be individually no more than three metres in height.

The new homes must also be flats, the instrument states, while the right only applies to buildings built after 1 July 1948 and before 5 March 2018 and excludes those within a site of special scientific interest.

Development is only permitted subject to prior approval. Conditions for local authority consideration include: transport and highways impacts; air traffic and defence asset impacts; contamination and flooding risks.

Airspace development; the same but different

The basic requirements for airspace developments are not that dissimilar to any development: the necessary components of land (or in this case airspace over land), services, funding and the actual construction are all there. However, what makes airspace developments different is the obvious potential design and technical difficulties in building up increased services provision and the actual legalities relating to other occupier or tenant rights, such as access and rights of light, party walls. All these additional considerations may make construction a little more challenging and funding that little bit more difficult to obtain.


There has been a marked increase in enthusiasm from local authorities towards airspace developments and now with the change to permitted development rights (contained in the The Town and Country Planning (Permitted Development and Miscellaneous Amendments) (England) (Coronavirus) Regulations 2020), opportunities to develop will be increased.  It is worth emphasising that the new PD rights do not apply to all buildings and a Certificate of Lawfulness will still be required.

For those developments, where planning is required, the main opposition is likely to come from long leaseholders within a block who will be concerned about the impact of the building on their own units.

Construction considerations

Each development will be different but when considering whether an airspace development is feasible an obvious first step is a comprehensive assessment of the suitability of the building to be built upon.

The loading capacity of the existing building designated to support the proposed development is the most important consideration when determining the development’s feasibility. It is unlikely the original structure will have been built with a loading capacity for any significant increase and the building’s ultimate capacity to take additional loadings will depend upon the actual type of the structure.

An appraisal will also need to take into account the structural capability of the building but also an assessment of access requirements for the build, fire protection (particularly considering any cladding issues in light of the Grenfell tragedy), maintenance, acoustics, provision of services (including internet sustainable technology) and possible construction methods.

Pre-made, modular structures that are built off-site and installed almost fully formed are a popular construction method for airspace developments, reducing the need for on-site labour as prefabricated units can be constructed virtually entirely off-site before being lifted on-site. Access routes for cranes to deliver the units and crane them on top of the building are therefore fundamental to secure.

Not every roof works financially. The kind of construction required is costly and as a result air space development is so far mainly taking place where values are high and profits can be made. The engineering solution arrived at to accommodate the additional structure will be key to the success of the whole project.


Although the existing building will have the benefit of services and infrastructure, it is vital to consider the actual capacity requirements needed for the increased number of units in the building once it is developed. Capacity checks will therefore be required at an early planning stage to assess the impact of the proposed development and develop a workable solution with each service provider. This may involve separate service facilities or an extension to those existing. If it is possible to extend the use of existing services (in particular for foul water drainage systems) this will lessen the cost but developers will need to be careful not to exceed the capacity for any of the services for the building.

Designing alternative layouts and connections into existing service routes and layouts should be carefully considered as new systems and locations add further complexities, not limited to the siting of such systems potentially outside the building and potentially outside the land title.

As I mention below, many blocks have plant and service equipment including lift equipment sited in roof voids and on the roof itself.  All of this infrastructure will, as a result of any potential build, need to be relocated or re-routed elsewhere.

Although these are all considerations applicable to all developments, often the design requirements and practicalities are more challenging in the case of airspace development.

Legal issues and practical solutions – existing tenants and their leases

Not surprisingly, a roof top development scheme may well be met by resistance from resident tenants and neighbouring property owners who will have concerns as to the noise and disruption caused and possible effect on the enjoyment of their property, availability of amenities such as car parking, and the effect on value.

One of the sweeteners could be the offer of a newly refurbished building exterior and communal areas including lifts and staircases and of course a new roof – all undertaken outside of the service charge regime. Whatever arrangement is arrived at needs to be documented with the party responsible for the maintenance and repair of communal areas, which could be the freeholder, management company or the tenants themselves.

Offering to extend the leases for the existing tenants and even a profit share with the leaseholders are other incentives to leaseholders which a freeholder or developer may be able to offer. Whatever the deal there are legal constraints which need to be understood and correctly dealt with. In the case of neighbours, as with any development, restrictive covenants, rights of light and party wall legislation need to be taken into account and managed at an early stage.

Checking the leases

The starting point is that from a leaseholder’s perspective, the building owner has a right to develop its building unless there are very specific restrictions on development (it is worth having a look at the judgement of judgment of Bernard Livesey QC in Hannon v 169 Queen’s Gate Ltd which involved a challenge to an airspace development).  Similarly, a tenant’s right to quiet enjoyment cannot, so long as the development is undertaken in a considerate manner, be used as an argument to prevent the development taking place (Goldmile Properties Ltd v Lechouritis [2003] was a Court of Appeal case where a tenant ran the quiet enjoyment argument and lost).  Developers would be wise to consider hours of working, the length of time the development takes and even the location of scaffolding to ensure the leaseholders have no opportunity to challenge an airspace development.

It is though important to check the lease carefully as it may create further points to consider, the first being who owns the roof space and air above it? Although a fairly basic point, the fact that the roof space had already been demised to tenants in a building enabled them to stop an airspace development in a 2014 case, H Waites Ltd v Hambledon Court Ltd. Consideration will also need to be given to any rights in favour of the leaseholders (easements) in the leases as these rights can prevent development. Look out for an express or implied right over the roof.

An added factor to consider is that the majority of services are found in roof voids together with things like air conditioning, lift plant, ventilation, chimney shafts and flues, smoke detection systems, aerials and satellite dishes etc, all of which will, as a result of any potential build, need to be relocated or re-routed elsewhere.  Again, the developer will need to be clear on whether it controls those areas and that the lease provides sufficient flexibility for relocating equipment.

Tenants’ rights of first refusal

It is really important that if the freeholder is considering transferring the airspace by way of a lease or a sale of the freehold to another party, that it properly considers whether the transfer is a relevant disposal within Section 4 of the Landlord and Tenant Act 1987.  If it is a relevant disposal, the leaseholders will have a right of first refusal meaning that any proposed lease (or opportunity to buy the freehold) must first be offered to the requisite majority of qualifying tenants (generally long leaseholders) on the same terms and at the same price as it was to be offered to the developer.

A failure to comply with the Act is not only a criminal offence but the anti-avoidance provisions mean that if the landlord fails to comply, the leaseholders can compulsorily acquire the lease from the purchaser direct for the price it paid.

Where the Act applies the qualifying leaseholders need to be given a minimum of two months’ notice prior to any sale which can seriously affect the commercial viability of the development. There are ways of working around the legislation and legal advice can help identify a correct approach but this is certainly not an issue to ignore.

Collective enfranchisement

Whereas the rights of first refusal are triggered on a sale, enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993 effectively allows the leaseholders to force through a sale at any time. Under the legislation they are required to purchase the whole of the building and the cost normally makes it an unattractive proposition for leaseholders. The legislation states that their entitlement is to a purchase of an ‘interest reasonably necessary for the proper management or maintenance of those common parts’ and this entitlement can therefore often catch roof space. The risk to the developer comes if the tenants are able to argue that the value of the rooftop space is as amenity space rather than potential development space (it will be interesting to see if the relaxation to PD which we discussed earlier will benefit the freeholders in this scenario as the freeholder will be able to argue that the space should be valued based on its development value).

Enfranchisement is another important issue to consider at an early stage to mitigate any risk of losing the block at a price below its value to a developer.

A PDF version of this article is available here.

Avi Barr is a partner in the Property and Secured Lending team at BBS Law.  Avi acts for a number of airspace developers and lenders within this sector and is happy to be contacted if you have would like to discuss anything within this article.

By Kerry Blackhurst

In a word, yes.

The authority of the Executors to deal with the property comes from the Will and then is confirmed by the Grant of Probate. Where there is no Will, or valid appointment of Executors, then the authority comes from the Grant itself.

But there are some important considerations

  • Although you can exchange without the Grant of Probate, you will need the Grant to register at the Land Registry so any exchange should therefore be conditional upon Probate being granted and the contract should stipulate a completion date for a set number of days after the Grant of Probate has been issued.
  • As with all conditional contract situations you should consider other relevant issues. For example, a Grant of Probate may take a lot longer to receive than anticipated so the parties ought to include a suitable backstop date in the contact. The buyer will have considerations about its mortgage expiry and even valuation expiry which need to be factored into any time period provided for the Grant to be obtained.
  • Remember also that where a deposit is paid on exchange, where completion is delayed, that deposit will be tied up and may prevent the buyer being able to pursue other property transactions.
  • Exchanging subject to a Grant of Probate is unlikely to work where the buyer is in a chain as a fixed date for a completion is not going to be achieved.

It is also worth noting that in some limited circumstances there is an exemption for some or all of your SDLT where a property is purchased from Personal Representatives.

So, in summary, yes you can exchange before you receive a Grant of Probate is received, but plan ahead.

Kerry Blackhurst is head of our Private Client team.  Kerry works closely with our property team and provides advice to clients on a variety of estate planning matters.