November e newsletter

Welcome to our November 2011 e newsletter.
Large energy consumers had their focus on the inaugural CRC league table which made its first appearance this month. Interestingly, a specific building heads the table but promoting a green property may increase business rates; we take a look. Also, inflation may be falling but this September’s figure has an impact on calculating future business rate levels. In the future this could be good for local councils but not necessarily for ratepayers. 

Over recent months it’s become fashionable to protest and occupy private property. What can you do if this happens? Take a look at our guidance on the matter. Changes to how you can buy legal services is opening up and you could be putting your legal services in with your groceries as you perform your weekly shop.  How will that alter your consumer buying habits? You will remember the severe snow last year so take a look at our Q&A which covers being prepared for the winter.



First CRC League table results; winners and losers

Monday November 8th saw the unveiling of the first Carbon Reduction Commitment (CRC) League table, with mixed fortunes for some of the UK’s largest organisations and its fair share of critics.

Topping the list was a City of London skyscraper, 99 Bishopsgate, owned by Hammerson, one of 22 entrants that scored the same highest weighted figure with other notable names including the Government’s Department for Energy and Climate Change and the energy regulator Ofgem, both of whom must be relieved. Other top performers include Manchester United Football Club, Centerparcs and British American Tobacco.

Generally, there were impressive results from many public sector bodies including hospitals, whilst the lower table performers were in the IT Sector which has led to scepticism and criticism from some about the merits of the scheme. The table lists 2,000 organisations, all of whom had the same amount of time to collate their data and at the bottom it is clear that some entrants have taken little or no action at all to make provision for lowering their emissions.

Whilst criticism could be levelled at those companies, it is important to remember that this is only the first year of the scheme and as the Environment Agency says this is… ’’ a baseline for future years which will also show overall CO2 emissions, annual emissions savings and progress on energy efficiency.’’ They do acknowledge that this is only the start and that it is the future years where the table will become much more relevant; they go on to say,’’…the rankings will increasingly become a public statement on participants’ energy efficiency, giving them an added incentive to cut emissions.’’

However, IT Networking company Cisco, for example feels that they, and others like them, have made significant strides to improve their technology during the course of the year and due to timing none of that is reflected in the table’s results. Ian Foddering, CTO of Cisco says ‘’…but those organisations that make exemplary organisational changes, replacing business travel with intelligent collaborative technology for example can actually find themselves on the wrong side of today’s legislation.’’ No doubt their improvements are likely to be seen coming through from next year but of course some fear that the nature of their business, in keeping up with the latest technological advances, will always place them, and their sector, in the lower half of the table.

To see the table in full you can access it via the Environment Agency’s website.

  

Inflation rise fears for Business Rates

Last month the Director General of the British Chambers of Commerce (BCC), John Longworth wrote to George Osborne and the Secretary of State for Communities and Local Government Eric Pickles expressing the concerns over the prospect of an ‘up-rate’ in the business rates multiplier to fall in line with September’s RPI figure of 5.6%, its highest for 20 years. As he points out….”  The Government has traditionally used the September RPI figure to calculate changes to the business rate multiplier in England and Wales; its decision is then usually mirrored by the Scottish Government.’’ An adoption of this figure would filter through into the rates assessments for 2012-13.

The inexorable rise in inflation and the knock-on effect on business rates would, they claim, have a significant ‘drag-effect’ on shared efforts to promote growth through planning reform, deregulation, and incentives for local growth and business investment and would also pale in comparison to earlier correspondence that the BCC issued to Government about their stance on empty property rates; it seems however that the Government will not be swayed on either at present, and are happy to refer to the doubling of Small Business Rate Relief that they have introduced and the streamlining of Relief claims via the Localism Bill. A spokesman for Mr Pickles’ Department has said....’’We need to balance any further support for business against the tough decisions needed to reduce the deficit.’’

The general tone of this concern is also voiced by the recently formed City Finance Commission who are looking, on a national basis, at how our Cities can set themselves free financially, economically and socially such that they can ‘’become more financially independent, to strengthen their ability to drive both local and national economic growth, deliver localism and to increase care for their communities.’’

They talk of proposing a ’business rate retention scheme’ and in pursuit of Localism are eager to see a much clearer link between local growth and local spend. They refer to the likes of Westminster who by 2014-5 will be raising some £1.5bn from local business rates but see ‘’little of this money invested back into the local community.’’  With the Localism Bill likely to receive Royal Assent next month we are likely to see much more of this rhetoric in a drive to stimulate local growth and devolution of centralised services.

Combating the threats of Protests

Our Democracy encourages freedom of speech and assembly and indeed the Courts are under a duty to protect fundamental freedoms granted by the European Convention on Human Rights, case law and the Human Rights Act 1998…but, in practical terms, what can you do to prevent and break up protests on your land?
The legal procedures for removal of protestors from private land are time consuming and stressful but at least there are several options including: a claim for trespass, a possession order and an injunction to prevent further re-entry.  However in many cases these all present practical difficulties in terms of implementation, most notably when the identities of the protestors are unknown. The courts have however seen sense in some instances and allowed for notices to be served in conspicuous places and have shortened the usual time frames for ‘deemed service’ in order for them to have swifter effect.  Also, with the use of clear maps attached to the notices, the courts will try to avoid any ambiguity over the actual area of property covered by the notice.

This is all good and well but having a strategy in place in the first place is also prudent, so that you are prepared. Here are a few suggestions:

• Nominate a suitable person as a site contact who is both able to witness the activity and communicate this to a lawyer.
• Monitor certain websites (such as www.protest.net and www.occupylondon.org.uk) to try to pick up intelligence on planned demonstrations which may affect you, and if relevant notify police of anything suspicious.
• Check your own security systems such as CCTV
• Have your own legal title documentation to hand, including maps, plans, access rights and public rights of way.

In the event of a protest on your land:

• Contact local police
• Contact a solicitor to initiate injunction, trespass or possession orders.
• Do not ask for individual protestor’s names; it is permissible to issue proceedings against the organisation, and be more wide-ranging.
• Collate information about the purpose of the protest, the number of people involved, their activities and details of any damage or disruption.

Speed and accuracy of information is very important and as usual, being prepared in some form is highly advisable.

 

"Tesco Law"; checkout new liberalisation in Legal Services

Early last month the Legal Services Act came into force, which the Government claims will offer greater choice and value to the public, whilst at the same time allowing firms to access new investment allowing them to explore new markets.  In theory lawyers will be able to work in multi-disciplinary companies who can offer a range of advisory services, provided they hold the appropriate licence and are recognised as Alternative Business Structures (ABSs).

So, with this opening up of the market, the natural extension of the legislation could mean that Banks, and even supermarkets, could shortly be offering this ‘value-add’ service as part of a move to offer more variety to consumers. Tesco themselves are reported to have ‘’no current plans to offer legal services’’, however the CO-OP is the only chain to so far comment that it was interested in the idea and has a pilot scheme set up in some branches in Bristol.

Critics of the legislation have been nervous about the proposals since it was first mooted in 2009 and chose to brand it ‘Tesco Law’ in an attempt to belittle its quality and lack of professional credibility.  A newly formed group calling themselves The QualitySolicitors.com and a coalition of some 100 firms sought to oppose the Act, and now some of the county’s largest firms have admitted that the opening up of the market could impact on their profitability.

Legal information company Sweet and Maxwell claims that 13% of finance directors at the 100 biggest firms see the move as a ‘’high risk’’ to profitability whereas the previous year none of them saw any risk.  As Sweet and Maxwell say: “Over the longer term, new capital attracted to the sector could fund more active competition among law firms for commercial work.’’

As a nervous sector takes in the new Law, it is not the case that there is little or no regulation and, as mentioned, licensing will be necessary via the Council of Licensed Conveyancers who will apply the same rigorous and proportionate approach as always. They believe that this is good news for consumers and they will offer a ‘’new riskbased and outcomes-focused approach to regulation (which) will help ensure high standards of service, and maximise consumer protection.’’

TAP takes a positive view of such liberalisation as it will allow a sometimes unapproachable sector to be more accessible and could encourage more engagement with customers; but nevertheless, if you are a law firm seeking to defend your client base you too can look to remind them of your strengths by more active marketing and communication possibly by Newsletters, Social Media or video blog.  Just as the property sector is beginning to wake up to the need for more engagement, so the legal sector must now look to do the same.

 

Could you be penalised for going green?

Our earlier article refers to the prospect of increased Rates bills for 2012-3 based on the significant rise in RPI as at this September; a traditional procedure but based on an RPI figure being at its highest for 20 years.

Another threat is perhaps even more incongruous... a ‘green premium’.  We are constantly being referred to a myriad of Sustainability measures designed to reduce our CO2 emissions in the workplace and at home and the construction industry is under similar pressure to develop the greenest possible new or refurbished buildings to meet UK targets. But the irony is that Rating valuations are based upon prevailing rental values and if higher rents are paid for ‘greener’ buildings due to anticipated lower running costs then the rating valuation is bound to be higher too.

What perhaps should be happening is that the older and less efficient stock is taxed higher which would then reduce rents and value and trigger the necessary upgrade which would then result in higher rents and lower (reward-based) Rates.  This approach would then tie in with other sustainability measures, such as low grade EPC rated buildings not being allowed to be leased from 2018, which would stimulate their refurbishment or redevelopment.

Unhelpful changes in green thinking however such as the sudden and earlier-than-planned halving of the Feed in Tariff associated with energy generated from Solar panels tends to slow this thought process down, but the general trend should be towards trying to tie in both a reward-based approach with a stick-imposed tariff on less efficient buildings.

Consistency of approach can also be sought when setting some ‘green’ activities against other revenue-producing schemes, such as the non-taxing of congestion and speed cameras (producing significant income) and the taxing of pay-as-you-go bicycle hire and electric vehicle parking bays.  This seems to make little sense in the overall national pursuit of economic growth generation and stated aim of hitting certain emission reduction targets by 2020 and 2050.

What can I do to be prepared for Winter?

Last year’s Christmas was a picture postcard. A blanket of snow covered the entire country and for many of us it was quite a surprise.  Planes struggled to take off and even short journeys were difficult and so responding to a property problem became somewhat of a challenge. The country was paralysed by the severe weather but have any of us learnt enough to take extra precautions this year?

Burst water pipes, slippery pathways, staff struggling to make it to work and non delivery of important materials are just some of the issues we faced throughout this period. This year we thought it would be sensible to outline a few tips on being prepared for the unexpected:

• Have to hand a copy of the essential papers; your lease and insurance policy
• Cash flow is important and relies as much on receiving payment as it does on paying for your suppliers or landlord.  If you depend on the post being delivered think about other ways of receiving your money
• Have a clear communication tree that allows information to be circulated quickly to your staff, and suppliers
• Have a full list of critical telephone numbers; we would suggest your landlord’s/managing agent’s contact details and details of your business- critical staff
• Have a list of essential contractor/supplier information and responsive emergency services numbers such as plumbers, electricians, and similar trades.
• Make sure your landlord has your up to date emergency telephone numbers and also details of the current key holders should access be required
• Should it be necessary, you may wish to think about alternative premises and should this be the case then think about having the number of a commercial property agent or Serviced Office Company. 

Pull all this information together and make sure those who need it have easy access to the system.  For those who benefit from our system all this information can be contained on our system and if you’re not sure how then please get in contact with us.

Undoubtedly it would be better to avoid such problems and prevention is better than cure!  Prevention depends very much on making sure your systems are regularly serviced and monitored and it would be much better so ensure your systems have been tested and serviced before the on-set of winter.  It’s not too late to have your CCTV equipment, boiler or intruder alarm serviced for the festive break and we would strongly recommend this is done.

Don’t delay as time is of the essence.

October e newsletter

Welcome to the October issue of the TAP E Newsletter.

As the Autumnal Firework season is upon us we look at the Regulations controlling their storage; we then take a seasonal look at what to be thinking about in preparing your building for Winter. Other stories focus on dispute resolution at lease renewal, a look forward at the future of the Real Estate Industry itself and The Bill affecting potential changes to the protection of our freedom. Finally our Q & A looks into the voids in our buildings in pursuit of excessive cabling. Take care with those Fireworks.



Firework storage for Retailers

The firework season is nearly upon us and most retailers who are preparing for it will be dealing with Hazard Type 4 fireworks and the storage of these will fall under the Manufacture and Storage of Explosives Regulations 2005 (MSER). Display-rated versions, known as Hazard Type 3 fireworks fall under more stringent regulation.

Under MSER, the licence or registration is granted to a person, not a site and the regulations divide compliance into those holding an all year round licence and those who are registered for supplying fireworks in only the following periods:

• Bonfire Night…October 15th to November 10th
• New Year…December 26th to December 31st
• Chinese New Year…the designated day and 3 days immediately before
• Diwali…the designated day and 3 days before.

You should apply to your Local Authority for the requisite certification.

The MSER refer to quantities in NEQ, ie Net Explosive Quantity, which is the amount in the firework,not the gross weight and it is an offence to store more than 5kg NEQ on a site that have not been registered or licenced. REGISTRATION is required if storing up to 250kg NEQ…a LICENCE is required for more than 250 kgNEQ and an HSE LICENCE is required if storing more than 2000 kg NEQ.  This applies to storage on a shop floor or in storage areas.

On the shop floor the fireworks should be kept in a designated area well away from sources of ignition and in a display case or cabinet which must:

• Contain no more than 12.5kg NEQ
• Be designed to protect against sparks or sources of ignition
• Contain no other goods
• Have any lights or electrical fittings disconnected.
• Be waterproof
• Be kept closed and only opened when needed

For general storage, if you employ 5 or more staff then an assessment of the risks must be undertaken and documented and suitable precautions taken as well as having fully operational fire extinguishing appliances on site.

If you are planning to store them in a warehouse with other combustible materials then they should be held in a separate metal container or similar cupboard/cabinet or a small mesh metal cage…the separation is key, as is the need to have at least a 30 minute Fire Resistance barrier between the storage area and the sales area.

For further information visit the HSE Website or the Chief Fire Officers Association, or contact us at TAP.


The Lease Renewal PACT; how to avoid going to Court

PACT, or to give it its full name. Professional Arbitration on Court Terms,is the result of a late 1900s consultation between the RICS, The Law Society and the ISVA who were looking for a method of resolving disagreement as to rent in the lease renewal process. Other lease terms can also be referred to a PACT qualified surveyor so as to limit or avoid the time and expense of taking the dispute through the Court process and this can have obvious benefits for both a Landlord and Tenant. Under the Civil Procedures Rule (CPR) this and other forms of alternative dispute resolution must be considered by the parties prior to litigation, or they risk punishment of costs by the courts.

The PACT surveyor is appointed by the RICS following a simple application process and forms are available for download off the RICS Website at a cost of £369, inc VAT. This is now a joint process between the parties, whereas up until 2003 it had to be the Tenant who made the initiating application; the idea being to try to maintain as much collaboration as possible which can lead to a swift and binding resolution. The professional who is appointed may be a surveyor or solicitor who has been specifically trained in this area and he/she may act as an arbitrator or independent expert, as chosen by the parties.

The idea is to give choice to the parties and their advisors as to ways of resolving disputes and it can incorporate all or some of the terms of the new lease or it may simply come down to determining valuation and rent. Surveyors are deemed better placed to adjudge this than the Courts. It may also be used in conjunction with court proceedings (which have to be stayed whilst this ADR is ongoing) and be viewed as the most efficient out of court method of resolving a key term, and this should have a positive bearing on cost, thus possibly avoiding full trial.

Whilst there are clear benefits here for both parties the actual number of applications to the RICS for PACT remain disappointingly low, rarely getting above 20 per annum since the late 1990s, which compare poorly with RICS applications for rent review resolution (running into thousands per annum) so perhaps there is more needed to promote this PACT approach which seems to offer flexibility, speed, low cost, a forum of choice and adaptability.

Worth considering in market conditions that indicate the need for all these factors for both parties.


After the heatwave, think about winter

"Prevention is better than cure", as the old adage has it,and when it comes to addressing the simple measures required to prepare a building for winter, now is the time to mobilise.

The last 2 winters should have alerted us all to what may be in store over the next 4 - 5 months and as occupiers, owners and employers we need to take responsibility for the manangement and control of premises and give thought to staff, customers and visitors especially with regard to snow and ice. In an increasingly litigious society we all need to be wary and plan ahead to make sure we have done all we can to prevent accidents, as well as deal with them when they happen.

Having some sort of winter plan is sensible business practice and a first step may be to actually appoint someone to oversee this.  It will, of course depend upon the management regime in place at your building and an understanding of this will certainly help, as will input and suggestions, but if you are an owner occupier or renting unmanned premises you should consider certain things for yourself.

• Plan ahead and purchase supplies of grit or sand or rock salt, and know where it is kept.
• Check to see if you have enough brooms and shovels, or indeed are specialist grit spreaders needed?
• Keep a watchful eye on the weather forecasts
• Act quickly; snow is easier to clear before it becomes compacted.

Think about gritting in the evening so that its ready for the next morning’s workday.

• Be aware of the busy routes to and from the building including the car park paths, goods delivery areas and pathways between buildings.
• Set up a plan to prioritise the process so as to know what takes precedence.
• Ensure that outward facing doors are clear of build-ups of snow, ESPECIALLY Fire Exits, and that the routes from these exits are treated.
• Notify ALL staff, including mobile workers,about protocols and the conditions that they are likely to face when arriving at work, as this might be different from conditions at home.

As usual much of this is common sense but it does require a degree of responsibility to staff and visitors, so be prepared,be aware and act promptly.

For further guidance you can visit both the Direct Gov website (Advice on preventing different types of emergencies) and/or the Health and Safety Executive.


The Future of the Real Estate industry… revealed!

In an extensive, wide-ranging and influencial report sponsored by the The Royal Institution of Chartered Surveyors (RICS), professor John Ratcliff was asked to assess the challenges and influences facing populations and demographics over the next 20 years and the impacts that these are likely to have on the built environment, and therefore how the RICS and other bodies could and should respond. The report is entitled RICS Strategic Foresight 2030.

No easy task, especially as the brief works across a global landscape and canvasses a huge and multi-disciplinary audience, resuting in a weighty document running to well over 100 pages.

The report identifies some large and common themes including pressures on resources, rapid technological change, increasingly mobile workforces, a new age of responsibility and collaboration, viewing property as an ‘experience environment’, a service industry with heightened expertise in management service and operational relevance, prioritising risk management and the re-assessment of valuation criteria over and above the traditional methodologies.

This latter point looks at the differing ways investors may begin to look at property, some of which has emerged already with Socially Responsible Investment (SRI) and the view that a building’s value may be "determined more by talent and function than by access and location."

The report goes on to say that... "Owner-occupiers and tenants alike will demand higher levels of environmental performance in the buildings they purchase or rent. A two-tier market will quickly emerge between ‘green-rated’ and ‘other’ properties. The future of global property is green."

TAP has noticed a growing trend of commentators using this language but as yet there is little or no evidence to suggest it has arrived. The results of a survey conducted by Tuffin Ferraby Taylor show that investors are split between those who think a more sustainable building will produce a higher value and those who would expect no rise. Indeed only 11% of the property owners surveyed believed that they would gain extra income from a ‘greener’ building, with 39% foresaw a reduced tax burden.

As always the future is hard to predict, but the RICS Report had drilled down into some detail on the influences that are likely to shape our future and that of the property industry and you can read it for yourself in the downloads section on the RICS Website, www.rics.org and search for Strategic Foresight 2030.


Potential impacts for Landlords and Tenants in the Protection of Freedoms Bill

Whilst still being subject to a 3rd reading in the House of Commons and consideration in the Lords, the Bill seems likely to contain certain changes to the way private Landlords can control certain activities on their land. Those that may affect Landlords and Tenants could include the use of CCTV, the use of wheel clamping, powers of entry and, more topically, the freedom to protest in areas open to the public but privately owned; ie shopping centres.

Dealing with each of these in order; the Bill is looking to regulate the use of CCTV, and is intending to introduce a code of practice which would initially only cover the use of systems by Local Authorities and the police. However pressure is being applied by certain groups, notably the Civil Liberties organisation Liberty, who want to see some regulation and licencing introduced to those areas that are used by the public which would naturally include shopping centres.  At present the only regulation over CCTV covers personal details captured and is held within The Data Protection Act 1998, and The Regulation of Investigatory Powers Act 2000 which deals with covert surveillance.

Wheel clamping is,theoretically, operated under licence following the Private Security Industry Act 2001 and can be undertaken by the landowner himself or by a licenced wheel clamping company; this licencing was introduced to address the activities of unscrupulous clampers. However following a consultation in August last year the Government are intending to ban clamping on private land, in this Bill.  If passed,the Bill will make it a criminal offence to clamp and also for those who chose to flout the ban. Police and Local Authorities will not be covered by the ban in respect of public highways however the police can still be called to deal with illegally or dangerously parked vehicles on private land. A landlowner’s options may then only be limited to the introduction of barriers or fines,and the Bill sets out a scheme for the recovery of unpaid charges.

The Bill also responds to a review of Powers of Entry and is likely to have Landlord and Tenant implications both residentially and commercially. However the review covers powers only currently contained in primary or secondary legislation and would not affect a Landlord’s common law right to forfeit a lease by peaceable re-entry or to distrain goods for unpaid rent. Unnecessary and inappropriate Powers are also being looked at with a view to being repealed and some 1200 powers could be affected.

Finally, The Bill looks to control protests on private land but which are open to the public (a ‘’quasipublic place’’). Clearly this will affect Shopping Centres and whilst one particular amendment currently proposes allowing such activity, the property industry is resisting this in the light of the recent Riots. In reality, the economy can ill afford the consequences of increasing protestors’ rights, but the debate is sensitive seeing as it has implications for human rights too. This is a controversial area and TAP will endeavour to keep an eye on it.


Should I be worried about excessive amounts of cabling in my space and what should be done to control it?

As part of good ‘housekeeping’ it is advisable to try to keep tabs on what cabling is being used for and whether or not it is actually live and belonging to you. Often in a second-hand building or unit you may well inherit a previous occupier’s cabling, which should have been removed in the event that none of it was re-usable. However it is notoriously difficult to do this and speed and efficiency usually means that new cables are laid adjacent to old ones.

This does present difficulties, namely with identification and possible fire risk which leads to the need for some kind of cable management.  Sophisticated systems include colour coding, barcoding, position logging and radio frequency identification (RFID) and those businesses that have high intensity intallations such as data centres will certainly be required to incorporate one or indeed a combination of them. For most businesses however a visual marking system will be sufficient.

As TAP has reported, leases are at an all time low in terms of length which implies that floorspace can and does change hands more frequently than ever before and this can introduce yet more cabling into the void spaces in commercial buildings.  This build-up is further compounded by more frequent upgrades in computer and telecoms technology even though wireless networks are becoming more efficient and reliable. But limitations in bandwidth can still mean that hybrid wire/wireless systems are needed, which still maintains a need for more cables.

As part of a Fire Risk Assessment you should have a clear idea of what risks are presented to you by both yours and your legacy cables and both Landlords and Tenants need to be cognisant of the overall picture in any building. As a Tenant you can play your part by an early occupational assessment of what surrounds you and adopting a visual labelling process to give you peace of mind that legacy cables are not presenting a hazard of any kind. Preferably, before you move in you should insist that old cables are removed to add extra clarity to the situation.

Further information can be gained via the HSE and also in the detail contained within the BS 8492:2009 which addresses the segregation of telecoms and power cables.

September e newsletter

Welcome to our September 2011 e newsletter.

It may not seem so, but the autumn and winter seasons are upon us and as the number of day-light hours reduce we look at whether Shopping Centres can reduce their energy consumption by 2.56% per annum for the next 39 years.

We also take a look at what we can all do to reduce waste and why some companies restrict access to the social media world.  It’s official, the service to occupiers, by their landlord and property manager, is improving and we take a look the results. What do data centres offer? We take a look.

Finally our Q&A takes a look at virtual security patrols and whether they can would benefit the service charge?



Can we deliver 2.56% reduction each and every year until 2050?

The Energy Savings Trust states that shopping centres contribute 3 million tonnes of CO2 to the UK’s total emissions each year. This is equivalent to the emissions of nearly half a million homes. The Government has set a challenging target of reducing CO2 emissions (50% by 2030 and 80% by 2050 from a base measure recorded in 1990) and if shopping centre owners want to meet this level they will have to reduce energy consumption by 2.56% per annum until 2050.

In an attempt to outline how this can be achieved, the British Council of Shopping Centres (BCSC) has issued a report entitled ‘Accelerating Change towards low carbon Shopping Centres’ with the aim of identifing areas that may accelerate the implementation of energy saving projects.  After speaking to a variety of stakeholders a number of elements were identified, where improvements can be made:

A high turnover of staff at grass root level should encourage companies to place the role of energy reduction at Board level.

Retailers are seeking better financial incentives from the Government.

Landlords can play an important part in spreading knowledge of ‘what changes work and what do not’.

In the long-term investment in energy efficiencies must go beyond that which is easy to achieve. We at TAP sense this stage is not too far away.

Communication is often highlighted as a cause for concern in any aspect of property management and all this needs to be improved.

Examples of areas where retail occupiers could achieve savings are numerous but a couple of the lesser known ideas are to reduce the light intensity – 70% of the total intensity before 11am; or look at moving away from the profession norm – large retail units normally have a fit out criteria of 40 watts per m2 and smaller retail units 80 watts per m2 but perhaps look at using high efficiency lighting where it is possible to have 14 watts per m2 in a large retail unit and 40 watts per m2 in a smaller unit.

These are simple wins but the opportunity to take advantage of these situations will become limited as the need to make greater savings takes over. Such projects will need greater occupier collaboration and so communication will inevitably become more important to enable energy to be reduced at the rate the Government wants.



Hardly a Waste of Time, get thinking about your Waste

We all know we should!... and at home our Local Authorities are loading us up with new bins and new pick-up schedules in an effort to get us to focus on how much we are throwing away and where it goes.  This also ties in with the current packaging debate about “Sell by’’ dates, “Best before’’ dates and so on, but within your business, who is taking the lead for what we dispose of and where and should we be thinking about this more responsibly?

Unsurprisingly we believe that we should and set out below some areas for your business to consider:

Waste is a huge subject and not only covers the refuse we collect in bags/bins but also Water, Electricity, transport, fuel, office stationary, pollution and time. It can also attract certain tax breaks and financial incentives, so its worth spending a bit of time on.

If you already use Waste Transfer Notes or have a hazardous waste consignment, from 28th September 2011, you will have to have shown that you have applied the Waste Management Hierarchy when choosing a waste option, and essentially this means you must have looked at:
- prevention
- prepared it for re-use
- give consideration for recycling
- give consideration for other uses…. ie as a biofuel or energy recovery
- disposal options

Consider looking at the useful guides and training offered by WRAP (Waste and Resources Action Programme www.wrap.org.uk).  Amongst a mass of very useful information they run online training programmes such as The Ripple Effect and ReThink Waste.

Consider contacting the Resource Efficiency Helpline on 0808 100 2040

As ‘easy wins’ in the office you can look at:
- refilling toner and inkjet cartridges
- using waste paper as notepaper
- using durable drinking cups not disposable ones
- reusing envelopes and other packaging
- donating used equipment and furniture to charities, including electrical items (see The Furniture Re-use Network)
- using greywater recycling systems in toilets
- read your meters and monitor usage
- print double sided and re use print paper in fax machines
- try not to over-order raw materials which may never be needed
- when replacing energy and water equipment consider buying items on the Enhanced Capital Allowances and Water Technology Lists for tax benefits

As mentioned this is a huge area and we cannot cover all of it in a Newsletter of this size, but there is plenty of advice out there, but some of those organisations above will definitely be of assistance.



Social Media – Many companies are still unsure about the its security

Company managers remain uncertain about the benefits that social media offers the workplace.  Many of these managers also believe viruses, loss of confidential data and the fear that their employees are spending too much time surfing the net also contribute to the idea that restricting access to these services is a safer option.

A survey produced by ClearSwift Research asked 1,529 employees and 906 managers in companies across the world about social media in the office.  Interestingly the results were: -

60% of employers worried about potential virus contamination
49% were concerned about loss of confidential information
40% felt viewing these facilities impacted on productivity
37% believed it could have a negative impact on the reputation of the company

This survey also covered the question of technological advancement in the workplace and concluded that companies were still taking a cautious approach to the introduction of new software systems based upon these results.

However the potential exposure to these security risks has resulted in a number of companies either banning access to the social media platforms or monitoring the individual employee’s use of the web. Of those employers questioned 71% had in place a practice policy on the use of the internet, 68% monitored employee internet activity and 56% blocked the use of certain social networking sites. But this last policy does have an impact on the younger generation as only 35% of 18-24 year olds and 44% of 25-35 year olds would remain at their job if their employer banned the use of certain social media websites.



It's official: Occupier satisfaction is getting better – but not by much

The latest Occupier Satisfaction Survey has been released and occupiers have improved their weighted score to 5.4 (where 1 is dissatisfied and 10 is extremely satisfied) on their landlord’s performance, although when considered more closely 10% felt their satisfaction improved, 75% felt their satisfaction remained the same, and 14% rated their satisfaction as worse than the previous year, so has there been any real change? This is the 5th year the survey has been undertaken.

To give you a feeling for the depth of research to achieve these results, the survey was conducted across a broad section of commercial occupiers although only 159 responses were ‘usable’ and were conducted by a Steering Group from the Property Industry Alliance with Corenet Global. The result can be broken down further and as with previous year’s occupiers, the industrial sector remained less satisfied with their landlord than office or retail counterparts.  Smaller medium-sized enterprises (those with less than 250 employees) are also less than content than their larger counterparts. However don’t take our word for it click through and have a look at the report. 

Areas where improvements were seen as significant are the process for applying for consent, and the process of handing back a property to the landlord. However, aspects that scored low related to service charge arrangements and the landlord’s communication and involvement with the occupier on Environmental matters.

This survey continues to highlight that smaller occupiers still find it difficult to engage with their landlord despite forming the largest “occupier” when you combined the total amount of space they occupy. Much of this is because their access to the right information, (that helps them understand their obligations and commercial requirements), is often priced out of their reach. For tenant satisfaction to greatly improve landlords will have to demonstrate a willingness to find a conduit to ensure that regardless of size, all occupiers receive the right amount of communication.



Off site data storage; the general principles

Companies need to make the best use of their floor space, and many are wondering why they are spending prime city centre rents on technical areas that could easily be housed off-site in secure, managed locations.

The data centre market is big business, and growing and can present opportunities for owners of vacant buildings with the prospect of relatively secure long term income streams (many with fixed increases) and the security and cost effectiveness that many business require for their data.

Essentially a data centre’s function is to provide uninterrupted, resilient services with the necessary cooling and ventilation that the systems best perform within. Additional services will include security, repair, common part maintenance and back-up against service interruption and it is usually these features that represent the components of a separate services agreement which is best linked to the ‘lease’ so that the termination of one can include the other. This ability for the tenant to terminate in the event that the services are unacceptable or breached is an important detail.  Furthermore, a tenant can expect to have their non-interruption backed up by service credits, liquidated sums which can be credited against rent or service fees. These features are key to the agreements and tend to illustrate where differences lie between tradition occupational leases, which tend to focus on alienation and repair obligations.

In such a model the actual lease rent can be as low as 10% of the total agreement, the balance representing the receipt of services. Such a low rent percentage also has the benefit of minimising Stamp Duty Land Tax applicable to the rental consideration. Electricity tends to be charged separately, as are any other services requested. 

Difficulties can arise when the centre needs to undertake repair or upgrade works and these need to be handled very carefully between the parties, bearing in mind the sensitivity of the ‘business critical data’ that is stored there. Back up plans should be drawn up to deal with this and should accommodate sensitive timing to minimise impact. Care should also be taken when dealing with a departing ‘customer’ as many tend to leave the equipment behind which causes uncertainty for the data centre manager who will be unsure if it can be re-used or not.  Document drafting should cover this from the outset. This can depend upon whether or not the customer has actually entered a collocation licence and had leased racking space or installed their own.

The immediate future sees increasing use of internet based back- up via Cloud based services which, once one is confident about data security issues, can allow for much greater employee participation and behavioural change, plus the usual benefit of reducing floor space usage for data equipment. You can anticipate data centre operators to be looking at using Cloud technology to meet this growing trend.

For further guidance on this area, TAP can direct you to industry experts.



Security Patrols – Can they be undertaken remotely?

If you work on an industrial estate or retail park, security of the common parts is often provided through regular manned patrols which are scheduled outside of the normal operating times of the estate or park.   In the current climate many managing agents are looking at ways of reducing the cost and one way maybe to replace these with a virtual patrol.

Virtual patrols operate through utilising a CCTV system that is linked via a wireless or broadband internet connection to a manned monitoring station where the cameras are regularly monitored. Typically a manned patrol can cost between £50 -£100 per patrol however there is a huge benefit as a security guard is capable of judging a situation and responding immediately to a potential issue, whereas a virtual patrol may cost as little as £3 - £6 per review.

A virtual patrol operates on the basis that the camera monitoring company can sweep the property using the images provided by the cameras at set and agreed times of the day.  The cameras can also be set up to provide alert alarms that would highlight a potential situation and bring an issue to the attention of the monitoring company.  With the images being provided through the internet, this allows the property manager to also view the site from any computer which aides the management of the property.

Using a virtual patrol can reduce the traditional routine, out of hour inspection cost, but there is an up front installation cost and broadband/wireless connectivity. Depending on the number of cameras a property manager may be looking at a capital expenditure amount above £10,000. This level of cost does depend on the number of cameras required to properly monitor the property.  The return on capitalfor such a project will depend on the number of years savings you apply to the project but based on 2 routine out of hours manned patrols per weekend at £60 per visit would result in an annual saving of £6,240.

As technology improves there will always be opportunities to offer a service in a different and potentially cheaper way so it is worth looking at what new innovations are out there.

August E Newsletter

Editorial: Welcome to the August edition of the TAP e Newsletter

Whilst the traditionally ‘slow’ month of August sees many property professionals taking annual holidays, the riots that have shocked the world have highlighted the vulnerability of high profile real estate and the businesses that operate from within them.  High-end brands were targeted across the country but many lower profile businesses and dwellings have been lost or damaged leading to questions over what, if anything, can have been done to protect the lives and bricks and mortar when committed attacks occur.

Tap, does not promise a silver bullet solution but this month we look at what the Government’s immediate response has been and this may be a continuing theme in the coming months.

We also look at market conditions which still seem to be favouring tenants, the need to challenge unnecessary bureaucracy in the Red Tape Challenge, issues affecting empty property and then the prospect of changes in consumer protection in property transactions.

Finally our Q and A asks; what are the main Green Tax incentives?

England’s Riots; can the High Street recover?

The UK’s High Streets have been struggling for too long already and any shopper will be able to vouch for the abundant vacancy that pervades most shopping districts, and the casualties continue to mount up, month on month.

So to be assaulted in such a manner by sustained rioting with some stores not only looted but burnt to the ground, can any local or central government action be enough to compensate Landlords and Tenants for such damage?

Early figures put the damage at £150m however this pales in comparison to the wider and longer term issues of UK regeneration, economic recovery and business confidence which needs to flow through to the High Street.

So, in the immediacy, the official response to those affected can be summarised as follows:

A government led £20m high street support scheme to help affected business get back up and running

An extension for claimants to seek compensation (from 14 days to 42 days) for those suffering damage or loss of their building, under the Riot Damages Act 1886, even for those uninsured.

A business rate relief for those affected, with Central Government funding at least 3 quarters of local authority costs, plus a council tax cessation for affected residential ratepayers.

Deferment of tax payments for businesses in greatest need

Relaxed planning regulations, where appropriate, for businesses to rebuild

A £10m Recovery Scheme to provide additional support to councils to make areas safe and clean

A government pledge to meet the immediate costs of emergency accommodation for families left homeless as a result of riot damage

In London, a £50m pledge from Mayor Boris Johnson to deal with affected areas and as part of a longer term regeneration programme.

Useful police websites to visit include:

Association of Police Authorities

http://www.apa.police.uk/your-police-authority/contactinformation

…and Banks have also joined forces to offer funding advice and can be viewed at:

Business Banking contact telephone numbers

Heartening scenes of local communities helping in the clean up have confirmed local resolve and it’s clear that businesses are not deterred by the damage they have sustained, but will continue to look to trade, and the help outlined above is a welcome relief to most.  Tragic and tough as last week was, the High Street is still in dire need to help and a far wider programme of ideas are needed to assist all retailers who are suffering through this downturn and the notable changes in shopping habits that affect them.

Consumer Protection for you instead of the limited scope of the Property Misdescriptions Act

For those involved in transactions in property there may be a change in the way you are protected by the materials and actions of the seller/lessor.

The Department of Business, Innovation and Skills (BIS) undertook a 3 month consultation at the beginning of this year to look into the workings of the Property Misdescriptions Act 1991 with a view of having it repealed and replaced by the Consumer Protection from Unfair Trading Regulations 2008(CPR).Their findings and recommendations are expected very shortly.

The CPR implements an EU Directive on unfair trading practices (Unfair Commercial Practices Directive 2005/29/EC) and, whilst it has never been used to deal with offences under the PMA, it does prohibit commercial practices that do not show the necessary standards of professional diligence as well as those that are misleading or involve misrepresentation.

Currently the PMA only applies to property SALES, so Tenants remain largely unprotected and it only covers defects in specific pieces of information which means that those who spot inaccuracies are often reluctant to bring forward a prosecution on one point alone.  The information can be judged to be ‘false’ if it is false to ‘a material degree’ and is referenced to what a reasonable person would infer from it, or its omission. Agents and/or Vendors can use the defence of due diligence only, however the PMA can claim to have had some benefit as the number of prosecutions has fallen from 26 in 2001 to 12 in 2009 (and only 3 in 2008).

The scope of the CPR however is wider than the PMA which may cause greater concern for agents as the BIS sees that an offence under the PMA would also be so under the CPR.  The whole area would be covered by the Office of Fair Trading whose proactive steps would involve the comparison of particulars to properties and the seeking of injunctions to prevent the use of specific misleading statements.

Because CPR is more principle-based, a consumer would need to show that an agent’s actions had led it to be influenced by the unfair practice and to have made a transactional decision.  Again, the only real defence is to prove that all it was a genuine mistake and that all necessary due diligence was undertaken to avoid it.  If found guilty, an offender may be liable to a fine of up to £5,000 and/or face a prison term of up to 2 years ,with limited company directors also being pursued alongside the Company.

As mentioned, the BIS’s findings are expected shortly but it seems inevitable that CPR will play a far wider role in property transactions, including those affecting Tenants, as all the factors that lead the consumer to a transaction are open to scrutiny.

Lease concessions continue to benefit Occupiers

In their 14th Annual review of UK property leases the joint findings of the Investment Property Databank (IPD) and the British Property Federation (BPF) are that rent free periods are getting more generous alongside shortening lease lengths and the increasing prevalence of break clauses.

As global economic data continues to cast doubts about sustained economic recovery the UK property market is reflective of this as vacant space struggles to find occupiers.  Not only are Landlords(whether they be Owner Landlords or sub-letting tenants)having to find creative ways of mitigating the payment of Empty Property Rates (as we comment elsewhere in this e Newsletter) but they are having to offer greater incentives to attract tenants to their space.

The Review finds that the average rent free period for a new office lease has pushed out from 14.5 months a year ago to 18.5 months in a study covering the period from January 2010 to March 2011 over 52,500 tenancies. The upward trend is reflected across all Sectors and on an overall basis it produces a figure of 13.4 months as against last year’s figure of 10 months.

Regional Offices seem to be faring the worst followed by Retail rising from 7.3 months last year to 10 months now and Industrial up from 8.1 to 9.1 months.

Not only are concessions still proving necessary to attract tenants across all sections but the average lease lengths also appear to be falling too with many incorporating break clauses to afford the tenant greater flexibility.

The review shows that across the country and across all sectors typical lease lengths are now only 5.8 years, down from 6.3 last year set against a figure of 17.5 years back in 2001; hard to imagine.

With rents barely growing too across most regions it would seem that favourable conditions for new tenants should continue to offer some attraction, however without the economic conditions into which to grow, many businesses are still not in a position to take advantage of the situation and relocate or grow.  A Catch 22 for those disposing of space.

Your chance to cut down Red Tape

From April this year, the Government, via The Cabinet Office, launched the Red Tape Challenge which is designed to harness your views on necessary and unnecessary regulation and to make whatever reforms are deemed appropriate following a consultation period.  The default position for Ministers is to cut away red tape unless Ministers can prove its necessity.  In total some 21,000 regulations could potentially be looked at, however only those considered by you to be the most burdensome will attract the most attention.

The process is set to last until April 2013 and your comments can be submitted via their website at www.redtapechallenge.cabinetoffice.gov.uk.  The process has been designed to address regulations on a subject by subject basis and, currently the site is taking observations for the Manufacturing arena.  As of July 28th the section on Health and Safety closed however comments can still be directed to the Health and Safety Executive as part of the Government’s long term plan for regulatory reform.

Forthcoming subject areas include Environment, Employment and Utilities/Energy and the Challenge will also deal with EU Regulations which may be deemed overly burdensome, in conjunction with other EU Countries.  The Government is keen to ensure that its commitment to SMEs are met whereby companies with fewer than 10 employees are exempted from new EU Regulation.

At the end of each sector’s comment period, relevant Ministers will review the submissions over a 3 month period and will then present their findings publicly on the website which will contain details of those regulations that they plan to repeal and within what time period.

TAP recommends that businesses keep a watchful eye on the website (above) in order to maximize this valuable opportunity to streamline regulation and enforcement, especially on those areas that continuously place the biggest burdens on business and society as a whole.

The Rating Game

Local Authorities around the country are playing a cat and mouse game with ratepayers who are looking at innovative ways of exploiting minor loopholes in Rating Law to avoid paying Rates on ‘empty’ property…or at the very least obtain a temporary exemption of 3 or 6 months(the longer time frame applying to Industrial property).

In a lot of cases the issue comes down to whether or not the property is actually empty and whether or not it is lawful or unlawful to occupy due to its condition or the presence of hazardous materials.

However, there are other approaches being tried and in a recent case in the North of England The Insolvency Service investigated a scheme being run to help numerous Landlords avoid rates payment due to the insolvency of the relevant rate paying company.  Their investigation led to the winding up of 13 separate companies which had been set up to sign leases on property which would otherwise have been vacant and these companies were then placed into members voluntary liquidation, but no liquidators were then appointed.  The effect of this was then that the Landlord was no longer liable for the business rates and councils were no longer able to collect.  In total it was found that over a 3 year period the scheme had avoided some £8.9m in rates liability and that some £1.4m had been earned in fees by the scheme’s operator.

Another topical example involves the tiny presence of a new marketing device which sends out, via Bluetooth, a continuous series of adverts to nearby, passing mobile phones.  These have been placed in empty properties such that, if the Valuation Office deems this to be ‘’occupation’’, then upon its removal, the ratepayer would be entitled to a 3 month exemption from rates payment.

Similarly, the presence and use of an alarm system in an empty property has been attempted to be regarded as ‘’occupation’’ by the ratepayer in an attempt to gain a later exemption.

Ratepayers, whether a Landlord or Tenant are clearly prepared to try whatever route they can to save money and in this downturn that is not too surprising and the result of that is that Local Authorities are increasingly eager to collect money owing to set against their frozen budgets.  The downturn has led to a vicious circle in some retail parades where charity shops have emerged as leading takers of vacant space, and provided they can vouch for their charitable status, they can claim either the mandatory 80% relief of even a 100% discretionary relief.  Good news for a Landlord in that he is no longer responsible for Rates but for the Rating authority the presence of a new tenant in the high street does not generate any tax revenue.

Being a Landlord or Tenant means little if you are in fact the Ratepayer, but be aware that most local authorities are very wise to scams and will be asking more questions than usual about claims for relief.

What are the principal incentives open to me whilst investing in Green Technology?

You would have done well to have missed Government rhetoric and initiatives about carbon emission targets, and in simplistic terms the UK are intending to reduce emissions by 80% from 1990 levels, by 2050.

But are there sticks or carrots being used to encourage us to participate? 

Essentially the sticks are taxes imposed on environmentally damaging activities and the carrots are tax reliefs or reductions relating to ‘’green’’ activities.

So whilst the damaging activities are generally being priced away from us the main incentives pertaining to UK property are:

Enhanced Capital allowances: these are applicable to expenditure on capital assets such as plant and machinery which would not otherwise be deductable for tax purposes and being ‘’enhanced’’ could give a 100% relief on environmentally friendly equipment in the year in which the cost was incurred.  Such a % compares very favourably with standard rates and could provide substantial cash flow benefits as well as helping to meet a company’s CSR commitments.

Reduced VAT; installation costs in residential property for the likes of insulation, solar panels, wind/water turbines, biomass boilers can attract a reduced rate of VAT.

Feed-in tariffs and RHI (renewable heat incentive); whilst not technically tax incentives these are designed to provide home and business occupiers a set level of investment return on the installation and running of energy efficient technology.  Combined with the EHA’s above relating to the plant and machinery tax incentives, these tariffs can provide a double benefit for users.  However be warned, as the Government is in consultation to have certain limitations placed on the %’s available as on April 2012.

SDLT exemption; again this applies to the residential sector and specifically on new zero carbon homes and provides savings on the levels of acquisition tax within certain pre set price brackets.  Reductions in SDLT could be up to £15,000 in the £500,000-£1m price bracket.  Certification is required by way of an EPC to enable qualification.

More generally, changes to the planning system through the National Planning Policy Framework (NPPF) are intending to mean that the default assumption is ‘yes’ to development, except where such a project would compromise the sustainability principles set out in the NPPF.

This ‘wrap around’ position is designed to incentivise development which might otherwise not have happened.