12 Days of Christmas – Day 12

To conclude our 12 Days of Christmas feature we thought we'd look ahead into 2025. We can't offer much crystal ball gazing when it comes to predictions of lottery numbers, but we can offer some guidance over what we may expect from the Courts and the Legislature in the next 12 months (both of whom look like they're going to be pretty busy!). We'll start with legislation.

 

RENTERS' REFORM

Reform of the living sector continues apace into 2025 with the anticipated enactment of the Renters' Rights Bill. The Bill is currently at report stage in the House of Commons and is due one final read before passing to the House of Lords. Labour plan for the Bill to become law by next summer. Once enacted, it will herald significant changes to the way the private rented sector operates.  Here's a brief recap of the main changes (our more detailed article, published earlier this year, can be found here):

• Abolition of section 21 (no fault) evictions: Landlords will no longer be able to evict tenants on 2 months' notice without reason. Instead, they will need to rely on one of the prescribed grounds of eviction specified in the legislation.
• Control of rent increases: Landlords can only impose annual rent increases that align with market rates. Tenants can challenge above-market increases in the First-tier Tribunal.
• Decent Homes Standard: The Bill includes an extension of Aawab's law, requiring all private rented homes to meet safety standards, addressing issues like damp and mould.
• New digital database: The new system is aimed at centralising and streamlining tenancy information, communications and complaint-handling and its use will be mandatory.
• Increased sanctions: Certain breaches of the legislation will be subject to fines by local authorities or claims by tenants for repayment of up to 2 years' rent.

 

1954 ACT REFORM

It feels like an overhaul of the 1954 Act has been on the cards for a while now. 2025 looks to be the year where the pace picks up. On 19 November 2024, the Law Commission published its first consultation paper which forms part of its two-part review of the Act. This first paper focuses primarily on security of tenure, particularly what sort of security business tenants should have in today’s commercial market. The paper proposes four different models for the future operation of security of tenure, ranging from a complete abolition of statutory security of tenure to an entirely mandatory system. It also poses questions about some of the finer aspects of the legislation. You can find the consultation paper here if you would like more details.

1954 Act reform is certainly a topic that can divide a room. All tenants, landlords and advisers are invited to respond to the survey by 19 February 2025, so there's still time to have your say.  A second paper based on responses received will then be published. This will contain conclusions regarding the preferred model of security of tenure and the Law Commission will then make its final recommendations to the Government for potential reform of the Act. It's a wait and see but hopefully this time next year we'll be reporting on what the new model will look like.

 

LEASEHOLD REFORM

As reported in our Day 6 article, the majority of changes to be introduced by the Freehold and Leasehold Reform Act 2024 are still awaiting enactment. In a recent ministerial statement, Matthew Pennycook provided more details of the Government's plans for bringing in the rest of the Act's provisions. Whilst it is clear that the intention is to act as quickly as possible, the statement also recognises the need to "balance speed with care", and points to "a small number of specific but serious flaws" in the current legislation that will need to be fixed through secondary legislation. The commitment in the statement to getting the remaining provisions right before "switching on the Act in full" is reassuring, but the to-do list is clearly quite long, and begs the question whether we will see a full "switch-on" by the end of next year.

The statement also highlighted the absence of a number of the Law Commission's recommendations in the Act and Government's desire to make commonhold the default tenure. It intends to do this through the Leasehold and Commonhold Reform Bill, which it is looking to publish in the second half of 2025.

 

CHANGES TO THE ARBITRATION ACT 1996

Last month we wrote about the impact of recent changes to the courts' Civil Procedure Rules which bolstered the courts' case management powers to order mandatory alternative dispute resolution (ADR) in appropriate cases (you can read our article here). With that in mind, all parties to potential disputes should be aware of the changes proposed by Government to the Arbitration Act 1996. Whilst the Act has been found to be fit-for-purpose in most respects, there are some changes proposed in the Arbitration Bill that will be of interest to parties engaging in arbitration and those agreeing to arbitration clauses in property contracts. It is anticipated that the Arbitration Bill will become law at some point next year. To find out more, please take a look at this detailed briefing note prepared by our Arbitration team.

 

CASES

We expect the courts and tribunals to be just as busy as Parliament next year. Here are just a few of the cases we will be looking out for:

• Sunnymeads Motor Co Ltd v Tolfree-Cross – We covered this case in November and a full report is here. The court granted an interim injunction allowing the tenant to remain in occupation where a series of technical errors had led to the tenant failing to protect its 1954 Act position in time. The substantive trial will be heard next year and it will now be for the courts to determine whether or not a valid application was made and ultimately, whether Sunnymeads still has a right of occupation.
• The Building Safety Act 2022 is going to keep the Court of Appeal busy next year. Triathlon Homes LLP v SVDP and Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point are both due to be heard sequentially in mid-March. In both cases the provisions of the BSA were held to have retrospective effect. Triathlon was the first major case where the First-tier Tribunal had to consider applications for a remediation contribution order and Adriatic concerned the recovery of the costs of an application to dispense with the consultation requirements in relation to cladding works. By the end of 2025 we should have clearer guidance on retrospectivity when it comes to the BSA.
• We will also be keeping our eye on a few rights of light cases in the new year. First, two combined cases brought by the owners of flats neighbouring Native Land's development at Bankside Yards. In both Cooper v Ludgate House Limited and Powell v Ludgate House Limited the flat owners are seeking injunctions to demolish or alter part of Native Land's development known as Arbor, which has already been built and let to a variety of tenants. The hearing is due to take place in March 2025, following a recent (and costly) withdrawal by Ludgate of their challenge to the tenants' rights.
• We will also be watching for developments in Handston Investments Ltd v Abri Group Limited. This case was recently the subject of an unsuccessful interim injunction application to try and restrain ongoing construction of a social housing development in Poole, Dorset. The interim injunction was refused despite the fact that the works resulted in an infringement of light based on the Waldram analysis, the developer refused to give an undertaking to stop work and the claimant was willing to give a cross-undertaking in damages.

And finally, if you have made it to the end of our 12 Days of Christmas feature, all that is left for us to do is to wish you (whilst not assuming any liability therefor) a reasonably Merry Christmas and/or other festive period and, for the avoidance of any doubt, a happy new 12 months from (and including) 1 January 2025!