Экзамен зачет учебный год 2023 / Sparkes, A New Land Law

the flat owners collectively. When development is complete30 title should be transferred to such a management company. There are a number of compulsory mechanisms for leaseholders to take over collective ownership and management.31

A company is used to hold the freehold since the corporate vehicle has perpetual succession which avoids the need for repeated vestings of the freehold. Ownership of the flats has to be kept in step with the ownership of the corresponding shares in the management company, so share transfers are required as part and parcel of every sale of every flat.

3.Management

[4.15] Leases are used for flats because the value of each one is dependent upon the condition of the block as a whole and of every other flat. Positive covenants are needed to cope with repair and the payment of service charges, and these are not enforceable between freeholders32 but only between leaseholders, so repairing obligations in a leasehold scheme are always enforceable between the current parties,33 facilitating proper maintenance and repair of the structural parts of the block and common parts. The value of each flat in a block depends upon all other parts of the block being properly maintained with mutuality of obligation and each tenant being liable to contribute to the cost through a service charge. The scheme will also include easements for access and restrictive covenants regulating the use of the flats.

E. COMMONHOLD

1.The introduction of commonhold

[4.16] The Commonhold and Leasehold Reform Act 2002 enacts a scheme of commonholds.34 They are a means of reconciling the freehold ownership of units within a development with the need for common arrangements for the management of the whole. The English scheme builds on the strata titles in Australasia, the condominium laws in North America and the copropiété of France and the continent. The case for reform is best pursued in an essay35 by David Clarke, the leading expert,36 but it may be convenient now to forget the 15 year slog towards the legislation.37

30The builder or developer needs to retain control until the last flat has been sold, particularly to collect the premiums, and also so that marketing of the flats can proceed.

31P Sparkes NLT ch 16

32See below [32.44ff].

33See below [27.18ff].

34Rules are subject to consultation: Commonhold Consultation CD 11/02 (LCD, 2002).

35D Clarke “Occupying ‘Cheek by Jowl’: Property Issues Arising from Communal Living” ch 15 in Bright & Dewar.

36DN Clarke Commonhold The New Law (Jordans, 2002); Clarke on Commonhold – Law Practice and Precedents (Jordans, 2002). See also PH Kenny [2001] Conv 216; PH Kenny [2002] Conv 206; N Roberts [2002] NLJ 887.

37Commonhold Cm 179 (1987) (the “Aldridge Report”); Commonhold – a CP, Cm 79 (1987);

Commonhold Cm 1345 (1990); Commonhold CP (July 1996); Commonhold and Leasehold Reform – Draft Bill and CP (Cm 4843, September 2000).

Commonhold is a new form of tenure for blocks of flats and other multi-unit properties. Flats are owned individually, the main advance being the tenurial reform which allows the creation of freehold units. Common parts will be owned and managed collectively helped by the scheme of reciprocal positive covenants and a more cohesive corporate management vehicle in the form of a commonhold association. Consideration of the individual aspect will precede the collective.

2.Constitution

[4.17] The constitution38 of the commonhold will consist of:

the certificate of incorporation of the commonhold association, and its memorandum and articles of association;39 and

a commonhold community statement40 which defines the units and the common parts and lays down the reciprocal scheme of obligations and provisions for collective management of the development.

It will become a commonhold when the title is registered as an estate in commonhold land.41 After registration, buyers will be able to get access to the constitution because the land registry will maintain a comprehensive register including:42

details of the commonhold association; the proprietors of the commonhold units; the commonhold community statement;

the memorandum and articles of association; and any other filed documents.

Once set up and registered the constitution can only be challenged by an application for rectification.43

F. COMMONHOLD UNITS

1.Atomic theory

[4.18] A unit is the basic indivisible atom of a commonhold. There must be at least two units.44 This neutral term could describe flats in a block, houses on an estate, shops, or light industrial units on a commercial estate. A unit could be residential or commercial. Division within a commonhold could be vertical (terraced houses) or horizontal (flats and maisonettes) or the units could be free-standing (detached houses or units on an industrial park). No doubt flats will be the most common type each in

38Chold and L Ref A 2002 s 1.

39S 2, sch 1.

40S 31.

41S 1(1).

42S 5. Rules will flesh out the details: s 65; these are subject to consultation at the time of writing: CP on

Draft Commonhold (Land Registration) R 2003 (LR, 2002).

43Chold and L Ref A 2002 ss 40, 66.

44Chold and L Ref A 2002 s 11(2).

individual ownership and potentially including physically separate areas such as a garage or an individual garden.45 Individual units will be described and defined by a commonhold community statement.46 Once set up the basic integrity of the unit will be protected against non-consensual variations at the behest of the other flat owners.47

2.Freehold basis of unit-holding

[4.19] The person registered as proprietor of an individual flat is described as a unit-holder.48 Commonhold will facilitate the freehold ownership of units, since the whole point is that the ownership of the unit-holder will be perpetual. There will be no risk of the loss of a unit because of non-payment of service charge as there is with a leasehold flat,49 though other powerful remedies will ensure that service charge contributions are paid. A commonhold is a special variant of the common law freehold estate, subject for example to claims to a matrimonial home right,50 and only a few trivial amendments to the existing property legislation are required to accommodate commonholds.51

3.Transactions with units

[4.20] Free transferability will be inherent in the nature of a commonhold unit and it will not be permissible for the commonhold constitution to impose any restriction on sales, gifts, dealings, or transmission by law.52 A residential commonhold scheme will not be allowed to degenerate into a quasi-leasehold scheme because there will be an outright ban on the grant of long leases.53 Dealings, mortgages and sales by lenders must relate to the whole unit and so that the atomic unit is not sub-divided.54 Units will be subject to normal compulsory purchase procedures.55 Transfer of a unit will automatically pass the burdens and liabilities to the buyer56 and will have immediate implications for the membership of the commonhold association.57

45S 11(3)(d). A unit may not even be a part of a building: s 11(4).

46S 11(1).

47Ss 23–24.

48S 12. More accurately it is the person entitled to be registered – including the buyer from the moment of purchase, ignoring for these purposes the registration gap. S 13 provides for joint holders and indicates whether liability is joint only or joint and several.

49S 31(8).

50S 61.

51Sch 5; there are minor amendments to the formality provisions in LPA 1925 s 55 and to the provisions for alteration of a register.

52Chold and L Ref A 2002 ss 15, 19. Grants of easements etc require participation by the commonhold association after a 75% vote in favour.

53Ss 17–19. The exact length of lease permitted (perhaps 7 years) will be defined by regulations. Leases of commercial developments will be allowed though with some formal requirements.

54Ss 21–22.

55S 60.

56S 16.

57See below [4.22].

G. COMMUNAL MANAGEMENT

1.Common parts

[4.21] Common parts are every part of commonhold land which is not a commonhold unit.58 These might include the structure of the block, communal services, and parts used in common – such as hallways, staircases, communal gardens and shared parking areas. Use of some parts may be restricted.59 They will be owned by the commonhold association and hence by the unit holders collectively. Legal title to the commonhold parts will be vested in the commonhold association by registration after sale of the first unit.60

2.Commonhold association

[4.22] Just as a leasehold scheme requires a flat management company, so a corporate vehicle to be called a commonhold association will be required for communal ownership, management, and decision-making within a commonhold. It will be a conventional company – a private company limited by a members’ guarantee of £161 – registered at Companies House in the usual way,62 and regulations will provide for a distinctive form of name.63 A model set of memorandum and articles of association will be provided with restrictions on alterations.

Membership of the commonhold association will be coincident with the ownership of units: only unit-holders will be allowed to be members and conversely membership will be imposed automatically after acquisition of the ownership of a unit. It will not be necessary as it is with flat companies to issue share certificates nor to transfer shares.

3.Commonhold community statement

[4.23] This is the document which will lay down the mutual scheme of regulation between the unit-holders, making provision for the rights and duties of a commonhold association and the unit-holders.64 A form for it will be prescribed and so will many of the contents. It will regulate the property law aspects of the development – in particular the inter-relationship of all the unit-holders. Variations will be limited.65

4.Reciprocal obligations

[4.24] A commonhold will be a sophisticated form of development involving reciprocal obligations, the revolutionary feature of commonholds being the facility with

58Chold and L Ref A 2002 s 25.

59S 35.

60S 9.

61S 34, sch 3.

62Commonhold and Leasehold Reform – Draft Bill and CP (Cm 4843, September 2000) Part I, [1.3.1].

63Chold and L Ref A 2002 sch 3 para 16.

64Ss 31–33.

65S 33.

which positive covenants may be imposed and passed on.66 Unit holders will have duties to pay for works.67 The association will prepare a commonhold assessment68 taking into account the global sums spent on repairs and these will be allocated to individual units in accordance with a scheme contained in the commonhold community statement. The remedy of forfeiture will not be available, but arrears could be charged on units.69

5.Dispute resolution

[4.25] An ombudsman scheme will be available for the resolution of disputes.70 Money can be made available for the provision of advice to commonholders.71

H. COMMONHOLD CREATION, VARIATION AND TERMINATION

1.Forms of development – the freehold and ground up rules

[4.26] Although it could be used for commercial blocks or industrial estates,72 the primary aim of the reform is to improve the position of residential leaseholders in blocks of flats.

The developer who constructs the site must originally be registered with a freehold title that is absolute, or at least be in a position to apply to be registered.73 Consents will be needed from all other parties interested in the land.74

In a simple case, a commonhold development will be used for a block of flats standing in its own grounds, with parking spaces and communal gardens, but isolated from its neighbours so that no part of it lies above or below non-commonhold land. Relationships with neighbouring land can be dealt with by easements and restrictive covenants. It could include non-contiguous parcels of land.75 Positive covenants cannot run with freehold land and for this reason flying freeholds will not be allowed. All land from the ground level upwards must be subject to the same application. A commonhold development cannot itself be a flying freehold.

2.Development mechanics

[4.27] Any new flat development has three phases – (1) planning and construction,

(2) the period after the sale of the first flat, when construction of other parts of the

66S 16.

67S 31(3)–(5).

68S 38.

69S 31(8).

70S 42.

71S 62.

72Commonhold and Leasehold Reform – Draft Bill and CP (Cm 4843, September 2000) Part I, [1.3.1]. Agricultural land is excluded: Chold and L Ref A 2002 s 4, sch 2 para 2. Multi site commonholds are allowed by s 57.

73Chold and L Ref A 2002 s 2(1).

74S 3. School sites and other land with a defeasible title excluded: sch 2 para 4. Any leases will be extinguished when the registration proceeds: s 10.

75S 25.

development may well be continuing and (3) when all flats are sold and the development is handed over to the commonholders.

Period (1) is described as a transitional period during which the land is registered as a commonhold, but without unit holders.76 This phase would last during the construction of the building condominium and until the first unit is sold. The developer will appear as registered proprietor but without any details of the proprietors of commonhold units. The developer will be allowed to withdraw during this transitional period with the consent of all proprietors and of all others interested in the land.77

When the first unit is sold the unit-holder is registered as proprietor, the commonhold association is registered as proprietor of the common parts and the developer will be registered as proprietor of the unsold units. A sales period (unnamed in the Act) lasts until all units have been sold, and during this period the developer has special rights to complete the development and to market unsold units.78

The completed development will be “handed over” to the commonholders after the sale of the last unit and from then on they will be responsible for running the commonhold association.

3.Conversions from leasehold schemes to commonhold

[4.28] In theory it will be possible to apply to convert a leasehold scheme to a commonhold, but the requirement for unanimous consent of all parties (the leaseholders, all secured lenders and the ground landlord or flat management company) will make this conversion very difficult to achieve in practice. The 100% rule is much criticised.

4.Change

[4.29] Variations or additions79 to a commonhold impact on the integrity of existing owners and their mutual obligations so there are special safeguards and entrenched voting rights.80 Individual units as defined by a commonhold community statement81 are protected against non-consensual variations at the behest of the other flat owners.82

5.Voluntary winding up

[4.30] Buildings rarely have a useful life exceeding 100 years or so, and a chance accident might destroy any construction at any time.

A commonhold association will be able to make a termination resolution that all the land over which it exercises functions should cease to be commonhold land. If it were to be passed unanimously, the association would be free to apply for termination.83 If

76Ss 7–8.

77S 8(4)–(5).

78Ss 9, 58–59, sch 4.

79S 41.

80S 36.

81S 11(1).

82Ss 23–24.

83Chold and L Ref A 2002 s 44; curiously there is no provision for mortgage-lenders to consent. All unit holders must be given a chance to vote but majorities are of those voting: s 36.

5

SOCIAL CONTROL AND HUMAN RIGHTS

Social interest in land. Compulsory purchase. Planning. Human rights. Horizontality. Deprivation of possessions. Controls on use. Respect for the home. Discrimination. Fundamental trial rights.

A. SOCIAL INTEREST IN LAND

1.Private ownership limited in the public interest

[5.01] Coke coined a proverb when he reported that Semayne’s case had decided that a person’s house

“is to him as his castle and fortress, as well for his defence against injury and violence as for his repose.”1

Few proverbs are quite so wrong. Coke’s cosy image of a landowner putting up the shutters and bolting the door to the outside world was not true at the start of the Stuart era and 150 years on, in the middle of the eighteenth century, the Chief Justice thought it obvious that property could be:

“taken away or abridged by some public law for the good of the whole.”2

In truth ownership is never absolute. Tony Honoré has defined it as the greatest possible interest in a thing which a mature system of law recognises, a form of definition which acknowledges that every liberal system prohibits harmful uses and imposes similar controls on land owners for the greater good.3

English people do not own castles, but homes that are hedged around with restrictions for the public benefit; a householder must pay taxes, avoid creating a nuisance to neighbours, keep his property safe for visitors, yield up criminals, and much more besides.4 In particular the public enjoys two vital interests in private land – the right of compulsory purchase and the right to impose a (town and country) planning regime.

1(1604) 5 Co Rep 91a, 91b, 77 ER 194.

2Entick v. Carrington (1765) 19 St Tr 1029, 1066, Camden CJ.

3AM Honoré “Ownership” ch 5 in AG Guest Oxford Essays in Jurisprudence (OUP, 1961), 108, 123, 144; PBH Birks “Before We Begin: Five Keys to Land Law” ch 18 in Bright & Dewar, 459.

4ED Brown (1965) 18 CLP 169.

B. EXPROPRIATION (COMPULSORY PURCHASE)

1.Compulsory purchase powers

[5.02] Modern government requires the power to force a landowner to sell his land when it is needed,5 a procedure generally referred to as compulsory purchase. Human rights law uses the Continental term expropriation but the American term eminent domain is even more evocative of the overarching and superior rights of the public at large.

The state should only take land with lawful authority, to meet a public need. Statutory authority exists for the purchase of land for a long list of worthy public causes.6 There must be an opportunity for objections. An acquisition can be challenged in administrative law if the power of acquisition is exceeded or abused. Procedure opens with the making of a compulsory purchase order,7 which identifies a general area of land intended to be acquired. Objections about whether the land is needed are resolved by a public inquiry or a written objection procedure.

2.Completion of the acquisition and compensation

[5.03] After confirmation of a compulsory purchase order, the acquiring authority is required to treat with each individual owner of land within the area affected in accordance with a statutory procedure.8 Acquisition is usually completed by normal conveyancing procedures though there is also a streamlined procedure using vesting declarations.

Compensation has to be paid to a landowner whose land is acquired compulsorily.9 A principle of equivalence crystallised in Director of Buildings and Lands v. Shun Fung Ironworks10 requires that the compensation paid must be equal to the landowner’s actual loss – taking into account the value of the land, though ignoring the effect of the scheme itself,11 and also any “injurious affection” of his land.

C. PLANNING

[5.04] Overwhelmingly the most important social control of land is the planning system,12 dating from 1948, but currently enforced under the provisions of the Town and Country Planning Act 1990 as amended.13

5Cheshire & Burn (16th ed) ch 31; Megarry & Wade (6th ed), [22.056–22.061]. Contrast requisition in war time, which involves temporary taking of possession without the acquisition of ownership.

6Acquisition of Land Act 1981 s 1.

7Acquisition of Land Act 1981.

8Compulsory Purchase Act 1965.

9Land Compensation Act 1973 ss 29–63.

10[1995] 2 AC 111, 125, Lord Nicholls (on Hong Kong legislation).

11Pointe Gourde Quarrying & Transport Co v. Superintendent of Crown Lands [1947] AC 565, PC; Rugby Joint Water Board v. Foottit [1973] AC 202, HL; Waters v. Welsh Development Agency [2002] EWCA Civ 924, [2002] 2 EGLR 107; Law Com CP 165 (2002).

12Cheshire & Burn (16th ed) ch 30; Megarry & Wade (6th ed), [22.009–22.055].

13Planning and Compensation Act 1991.

1.Work permitted by planning permission

[5.05] Planning permissions are issued by the local planning authority, usually the District Council.14 Permission is required for any development, a concept which includes:

any building operations;

demolition of dwellings or of any buildings within conservation areas; engineering and other forms of operation, and

any material change of use.15

A grant of planning permission does not guarantee the private property rights necessary to carry out a development and is not a defence to a nuisance action.

2.Limitation after operational development

[5.06] Planning breaches are subject to a regime of limitation,16 which exempts building and other operational development if no enforcement action is taken against a breach for four years.

3.Permitted development

[5.07] The Town and Country Planning (General Permitted Development) Order 199517 permits some forms of development without express planning permission. It permits, for example, modest extensions to an existing house, loft conversions, dishes for satellite tv, as well as minor alterations within the curtilage18 of a dwelling house.

4.Building regulations approval

[5.08] Whether or not building work requires planning permission it will need to comply with Building Regulations.19 These cover new building work, alterations, and work causing a material change of use. Alterations to older buildings are judged by whether they make the building more or less satisfactory by modern standards. All aspects of building work are regulated, including structural integrity, fire safety, foundations, toxicity of cavity insulation, sound insulation, ventilation, hygiene of sanitary appliances, drainage and waste disposal, heating equipment, guarding of stairs and ramps, conservation of fuel, access for the disabled,20 and glazing.

14Major changes are underway for major infrastructure projects: Planning and Compulsory Purchase Bill 2002.

15TCPA 1990 s 57(1).

16TCPA 1990 s 171B, as amended in 1991.

17SI 1995/418 as amended.

18SS for Environment T&R v. Skerritts of Nottingham (2000) 80 P & CR 516, CA.

19Building Act 1984; Building Regs SI 2000/2531, as amended.

20Disability Discrimination Act 1995 (banning the traditional doorstep), as amended.