Legal Clarity for Developers: BDW Trading Ltd v South Anglia Housing Ltd

• The High Court ruling on July 15, 2013, clarified that long-term servicechargesorted.co.uk/blogs/digital-solution-can-improve-the-whole-process-by-making-it-faster-and-more-transparent'>service charge agreements made before a building is constructed or leased do not require Section 20 consultation under the Landlord and Tenant Act 1985.

Impact on Combined Heat and Power (CHP) Agreements

• As the government pushes developers toward on-site CHP provision, this ruling ensures that agreements made pre-construction, like the one in Comet Square, are not subject to tenant consultation requirements.

As the government pushes developers toward on-site CHP provision, this ruling ensures that agreements made pre-construction, like the one in Comet Square, are not subject to tenant consultation requirements.

• For Section 20 to be triggered, there must be an existing landlord-tenant relationship. The court ruled that "landlord" does not mean a prospective landlord, so consultation is not required if no leases exist at the time of agreement.

What This Means for Developers and Landlords

• Developers can now enter long-term agreements for essential services before leasing properties without the risk of tenant consultation requirements or cost caps under Section 20.

Avoiding Consultation and Cost Caps: What Landlords Need to Know

• If an agreement qualifies as a Long-Term Agreement, landlords must consult tenants or face a cap of £100 per tenant. However, they can seek dispensation from the First-Tier planetrent.co.uk/blog/could-a-tax-tribunal-ruling-mean-btl-investors-avoid-3-stamp-duty-surcharge'>Tribunal to bypass these requirements.

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• Ringley, a leading London managing agent, provides expert guidance on lease structuring and new-build management. Contact us for in-house training on creating effective leases and overcoming management challenges.