Welcome to the May edition of E:gen, Winckworth Sherwood’s Regeneration and Development Newsletter. In this edition we look at the importance of later life housing; interim payments in construction contracts; the potential impact of eliminating ground rents, plus whether the limited liability partnership structure is viable for local authorities when entering into joint ventures with developers.
If you have any questions please do not hesitate to contact the authors who are happy to discuss their topics further.
The other end of the housing market
As we welcome a new Housing Minister, James Brokenshire, discussion surrounding housing need is all too frequently focused on the plight of the first-time buyer. That serves to ignore a very important and growing section of the housing market – later life buyers.
Interim payment & smash and grab adjudications – the beginning of the end?
Most standard or bespoke construction contracts provide for interim payment during the works. If the contracting parties have failed to set out contractual terms for interim payment the Housing Grants, Construction and Regeneration Act 1996 (“Construction Act”) will imply interim payment terms into the contract via The Scheme for Construction Contracts (England and Wales) Regulations (“the Scheme”).
Leasehold Reform – How could it affect you?
On December 21st 2017, in response to their consultation on Tackling Unfair Practices in the Leasehold Market, the Ministry for Housing, Communities and Local Government (“MHCLG”) announced its intention to ban long-term leasehold for newly built houses. There was also a concerted effort to prevent exploitation of leaseholders by stopping onerous leases with aggressively escalating ground rents, the so called ‘ten and fifteen-year doubling’ leases by reducing all future ground rents to a peppercorn (equivalent to a zero financial value).
Can local authorities team up with devleopers in LLPs?
A recent High Court case (Peters v LB Haringey and Lendlease) has shed new light on whether local authorities are able to enter into joint ventures with private-sector developers using limited liability partnerships. Limited liability partnerships (LLPs) are popular choices for development joint ventures. They are flexible, allowing the parties to set out bespoke arrangements for how profits will be split. They are corporate bodies, capable of owning and charging land, allowing them to attract external funding. And LLPs are tax transparent, which means that they do not themselves pay corporation tax but instead each partner pays tax on the profit allocated to them.