January 22, 2014 12:27 pm

House Rules: property law and buying government land

Guidelines for buying government property, and the OFT investigation into property management services
Illustration by James Ferguson depicting property law©James Ferguson

1. Freeing up government land

There’s an empty building on a site I’d like to develop. I think it used to be a UK government office. Can I get them to sell it? Possibly. The Cabinet Office has just published new guidance which is supposed to make it easier for anyone to challenge the government about land it owns.

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How much of a case do I have to make? The rules are different depending on who owns the land. If it is owned by a central government department, you have to make a case that the land could be put to better economic use. That might be for housing or to help a growing business.

Does the site have to be disused? Not if it is owned by central government. If you think any current activity could be moved elsewhere, you can still apply.

What about sites owned by local authorities? The rules are a bit different and you can only challenge if the site is empty or underused, and there are no plans to bring it back into use.

How quickly will they decide? For land owned by central government, the Cabinet Office expects to respond within six weeks. Applications about local government land are expected to take longer.

If they agree to sell, who fixes the price? Good question. The guidance is silent on that point, although the government would probably have to show that it had achieved the best value it could from the sale. Nor is there anything about how soon the land has to go on the market. That could be where the whole process grinds to a halt.

How do I know who owns the land in the first place? That’s the other tricky question. The government has published lists of its land assets online but they don’t seem to give a complete picture. Your best bet is to search at the Land Registry, ideally using the postal address. If title to the land isn’t registered, there is no easy answer; but if it is, you can view details of who owns it online, for £3.

2. Property managers under scrutiny

I’ve read something about an investigation into property management services. What’s happening? If you own leasehold property and feel let down by your landlord’s property management company, now is a good time to complain. The UK’s competition and consumer watchdog, the Office of Fair Trading, is taking a good hard look at the way residential property management services are provided for leasehold homes in England and Wales. The review reflects high levels of dissatisfaction among leaseholders and the OFT wants to hear about people’s views and experiences.

What is the OFT worried about? The initial information-gathering exercise has just ended and the OFT will announce the scope of the full market study shortly. They are likely to look at things like how leaseholders can tell if they are getting value for money and how easy it is to challenge service charges. They have also expressed concern about whether property managers have the right incentives to keep the costs of maintenance and insurance low.

Does the OFT have any teeth to change the way things work? The OFT has wide ranging powers to request information. When it has concluded its assessment, the OFT will publish a report with its findings and will outline what can be done to address any market failings it has identified. It could make recommendations for consumers, businesses and/or the government. The OFT can also recommend a further in-depth market investigation, which could lead to legally binding changes for the industry.

Will any of this make any real difference in practice? Yes. Following a recent market investigation in the motor insurance sector, the competition regulator reached the provisional view that insurance companies overcharge their customers by possibly as much as £200m a year in the UK. It is now looking into ways to significantly reduce premiums for motorists and improve the level of services received by them. This is a lot of money, for both consumers and the affected businesses, so a market review by the UK competition authority isn’t something to be taken lightly. Further details of the OFT’s market study can be found on its website, which will be updated as the study progresses.

Philipp Girardet is a partner in the EU, Competition and Regulatory department at King & Wood Mallesons SJ Berwin

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