Simplification of the SDLT treatment of leases: draft Finance Bill 2013

Draft legislation to be included in the Finance Bill 2013 introduces three changes aimed at simplifying the SDLT treatment of leases. The changes, which will apply from the date on which the Finance Bill 2013 receives Royal Assent, are much welcomed. They abolish the abnormal rent increase provisions and simplify the reporting requirements for substantially performed agreements for lease and fixed term leases that continue after expiry. Contact Zoe Tranter zoe@streetsolicitors.co.uk for more details.

Assessing qualifying works for residential service charge demands (High Court)

The High Court held that qualifying works under section 20ZA(2) of the Landlord and Tenant Act 1985 (LTA 1985) must be considered as a whole when seeking recovery of the cost of the works from the tenants via the service charge.

Following the amendments made to the LTA 1985 it is no longer appropriate to divide the qualifying works into sets of works nor to assess some aspects as falling below a “triviality threshold” rendering them recoverable. If the costs are to exceed a contribution of £250 per tenant, then the proper consultation process must be carried out to avoid the landlord suffering a shortfall. (Phillips and Goddard v Francis [2012] EWHC 3650 (Ch).)