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New and improved

13 December 10

An update from the Property Standardisation Group on recent work

The Property Standardisation Group has had a busy year despite the slowdown in the commercial property market.

What’s new?

The Group has produced:

  • a licence to occupy with guidance notes
  • a foreign opinion letter with guidance notes.

The licence to occupy is designed for short-term sharing of occupation where the parties want to keep the arrangement flexible with either party being able to terminate the licence on short notice. The licence can be used for retail or office premises and is personal to the licensee.

There is debate about whether it is possible to create a licence to occupy under Scots law (see Brador Properties Ltd v British Telecommunications plc 1992 SLT 490), and it will be for the user to decide whether the final document they have drafted meets the criteria for a licence, for example by one of the fundamentals of a lease being absent, such as:

  • no fixed term; or
  • no rent payable; or
  • no defined premises.

The foreign opinion letter is based on the letter produced by the City of London Law Society for English property transactions and we have kilted this for Scottish property transactions.

What’s improved?

The due diligence questionnaire has been updated to include enquiries relating to the Carbon Reduction Commitment and sites of special scientific interest. The capital allowances enquiries have been updated.

The letters of obligation have been updated to reflect the 14-day time limit for registering the disposition as agreed between the Law Society of Scotland and the profession’s indemnity insurers, and to reflect the fact that as a result of dematerialisation land certificates may not always be issued by the Keeper.

In the offers to sell the clauses relating to time limits for registration of the disposition and the date to which charges searches should be brought down have been amended to reflect the reduction to 14 days referred to above.

All the lease management documents have had the wording for the costs clause standardised so that the costs will be payable within five working days of demand.

The Group would like to thank the consultees for their contribution to the new documents produced. We welcome your comments and feedback on any of the PSG documents – our contact details can be found on our websitewww.psglegal.co.uk.

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