Empty property rates.

The Rating (Empty Properties) Act 2007 removed business rates relief for most unoccupied properties with effect from 1 April 2008. Industrial and warehouse premises now have 100% business rates relief for the first six months of vacancy, while most other commercial properties have only 3 months of 100% rates relief. After the initial period of vacancy, full business rates are payable, bringing the rates liability to the same level as occupied properties.

The Government has announced that it is temporarily increasing the threshold at which an empty property becomes liable for business rates. From April 2009 until March 2010, empty properties with a rateable value of less than �15,000 will be exempt from business rates. The Government estimates that this change will exempt 70% of empty properties from business rates. However, the Government maintains that, in the long term, beyond an initial rate-free period, it is right to charge rates on empty properties, as this increases incentives to re-let and re-use empty property. This view indicates that there are no current plans to reverse the effects of the R(EP)A 2007.

Closure of Problem Properties

On 1 December 2008, a new power was brought into force that allows the police or a local authority to apply for a closure order for any premises (whether residential or commercial) that are associated with persistent anti-social behaviour. A closure order can result in the premises being closed to all persons, including owners and occupiers, for a maximum of three months (subject to being extended for a maximum of a further three months). A closure order is likely to have financial consequences for, and cause considerable inconvenience to, occupiers, landlords and others with an interest in the affected premises. We have already been involved in fighting one of the first applications to use these new powers.

Sales without an order for possession.

The Court's decision in Horsham Properties Group Ltd v Clark & Anor [2008] EWHC 2327 (Ch) confirmed that a lender can sell a defaulting borrower's home without first obtaining a court order for possession.

The Horsham case has attracted a considerable amount of interest and the Government is currently investigating the implications of the decision. On 15 December 2008, the Council of Mortgage Lenders (CML) published a voluntary statement (the statement) confirming that CML members will obtain a court order for possession before: Seeking to sell a mortgaged property when the borrower is in default. Appointing a receiver to sell a residential property.

The statement only applies to mortgages secured over owner occupied residential properties. It does not apply to: - Commercial transactions, including: buy-to-let loans (as was the case in Horsham); business loans secured against a residential property; or bridging loans. - Vacant or abandoned properties. - Cases of fraud. - Sales that take place with the full informed consent of the borrower. CML lenders may review their position further in light of the Government investigation.

House Sale Competitions

There is a growing trend to try and sell houses by way of a competition rather than by using a traditional estate agent.

Some of these schemes are very innovative, but can very easily fall foul of the law because they are a form of gambling. Most of these schemes that we have seen so far have flaws which could render the organisers liable to prosecution and the possibility that all entrant's fees have to be repaid in full.

In order to escape the need for a licence and to operate legally, competitions can involve an element of chance but must also require sufficient skill, judgment or knowledge to deter a significant proportion of potential entrants from participating or eliminate a significant proportion of actual entrants from receiving a prize.

We advise anyone contemplating a house sale competition to seek expert legal advice first