Please note, there is the framework for additional powers to be introduced which could change this quickly.
A local authority wants to use my building. I am happy to agree to this but what are the implications?
You will need to consider other parties that might have an interest in your property, eg a mortgagee, a funder under any PFI (or similar) scheme, any operator who usually provides services from that property. You will need to check the terms of any documents but it is likely you will need the consent of the mortgagee, funders and service providers.
In some cases the local authority might have the legal power to require you to break these agreements, subject to an obligation to provide compensation, but this may not prevent third parties from making a claim against you for breach of agreement or for other liability.
What liabilities might I incur as a landowner from the temporary use?
There could be potential liabilities arising from the temporary use and it is important to get an indemnity against these liabilities from any occupier before they take occupation or alternatively establish that an appropriate compensation scheme is in place. We appreciate that there may not be time for agreements to be put in place but we have prepared some paragraphs that can be put into correspondence with the potential occupier.
What if the occupier needs to adapt the buildings?
It is likely that any occupier will want to make alterations, the extent of these should be agreed and obligations to reinstate the buildings at the end.
Will the occupier gain any rights to remain in the property?
Two leases, each being for a period of less than 6 months, can be granted without the tenant gaining security of tenure under Landlord and Tenant Act 1954. If a formal agreement can be put in place that could be excluded in the normal way.
What about health concerns after the use ends?
You will want to ensure that the occupier carries out deep cleaning to agreed standards at the end of the occupation.
Do I need to think about planning?
Things are moving quickly and on 9 April 2020 an Order introducing a new temporary permitted development right in England was laid before Parliament. The Order came into force at 10am within 24 hours of it being made. Local authorities and health service bodies will be able to carry out development, without the need to apply for planning permission, which could include, but not be limited to, the change of use of existing buildings such as conference facilities and university buildings or structures to provide health facilities such as temporary hospitals, coroner facilities, mortuaries and testing units on land owned, leased, occupied or maintained by them for the purposes of preventing, reducing, controlling or mitigating the effects of; or taking other action in connection with, an emergency.
Construction issues during COVID-19
Is the contractor entitled to more time and money as a result of COVID-19?
No, not necessarily, it will depend on the wording of contract. If it is a JCT contract then even if the contractor is entitled to more time they will not get extra money.
How do I respond to notices regarding delay received from the contractor?
Check any timeframes in the contract for responding. Make sure you keep to them and seek legal advice about how best to respond.
What else should I think about?
Be careful and think about the consequences of a) issuing instructions, and what can amount to an instruction, for instance changing access arrangements; b) suspending or stopping the works. Both can have unintended consequences.
What are my obligations under the Health and Safety at Work Act 1974 (“the Act”) and the CDM Regulations 2015 (“CDM”) in respect of ongoing construction work?
You have a duty under the Act to ensure, so far as is reasonably practicable, the health safety and welfare of all of your employees and anyone else affected by your undertaking – the latter will include construction workers working on projects under its control.
Under the CDM you must make suitable arrangements for managing a project, including the allocation of sufficient time and other resources. In light of government and industry guidance you should seek assurance from the Principal Contractor that they are taking account of Government and industry guidance and implementing appropriate Site Operating Procedures to reduce the risk of on-site coronavirus transmission.
For more information go to our construction blog.
If you need further advice on this topic, please get in touch with your normal Real Estate contact at Mills & Reeve LLP or please contact Richard Noble.
Visit the Mills & Reeve Coronavirus hub here.