On the horizon: Overseas entities, Charities Act and an eventful autumn

Over land and sea The initial excitement surrounding the new register of overseas entities may have largely subsided but watch out for a new trap that will materialise from 1 August 2023. You will recall that the Economic Crime (Transparency and Enforcement) Act 2022 requires overseas entities that own UK land to register their beneficial ownership on a new register maintained by Companies House and receive an “OE” number. Although the 2022 Act imposes significant criminal penalties, compliance is largely enforced through the land registration system, with overseas entities now requiring an OE number to register their acquisitions and to comply with newly-imposed restrictions on dealing with their existing portfolios. A last-minute flood of registrations before the transitional period ended on 31 January 2023 means that most transactions involving overseas entities have become something of an anti-climax, simply requiring the OE number to be included in the relevant documents and forms. However, a new element of jeopardy will arise when the annual updating duty comes into play. The 2022 Act provides that an overseas entity is not a “registered overseas entity” and does not satisfy the new Land Registry requirements if (and for so long as) it has failed to comply with its annual updating duty. With the register having opened for business on 1 August 2022, the updating duty cannot arise before 1 August 2023. But, from that date, the existence of an OE number alone may not be enough and it will be necessary to check whether the updating duty has arisen and been complied with. And stage two is coming soon, with the Economic Crime and Corporate Transparency Bill approaching the final stages of its legislative journey. Charity begins at home The rules on how charities deal with land have just changed (though at the time of writing were still “on the horizon”). The Charities Act 2022 makes significant changes to the existing law regarding charities. The primary aim is to free charities from unnecessary bureaucracy and cost.  This includes significant changes to the report and advertising requirements on disposals of charity land contained in the Charities Act 2011. In particular, advertising will no longer be mandatory, and reports (previously the sole domain of surveyors) may now be obtained from fellows of the Central Association of Agricultural Valuers and NAEA Propertymark. Charity trustees, officers and employees (if suitably qualified) will also now be allowed to provide that advice. The remaining provisions affecting charity land (including amendments to the exceptions from the general restrictions, and changes to the required statements in land dispositions by charities) are expected to follow by the end of the year. Forever autumn Autumn 2023 promises to be eventful: • Residential leasehold: the delayed King’s speech is expected to announce further reform to the residential long leasehold system, but stopping short of housing secretary Michael Gove’s ultimate ambition to abolish leasehold homes altogether. We can also expect progress with the Renters (Reform) Bill (with its proposed abolition of no-fault eviction), which I mentioned last time and which was subsequently introduced into parliament during May 2023. • The Building Safety Act 2022: full implementation is due in October 2023, when (among other things) the Building Safety Regulator will become the building control authority for high-rise residential buildings and section 77 (the new criminal offence where a higher-risk building is occupied but not registered) will be brought into force, following the opening of the register in April. There will be plenty more secondary legislation between now and then. • Biodiversity net gain: the legal obligation to ensure that development enhances rather than reduces biodiversity will apply to new planning applications from November 2023. Small sites will be included from April 2024. Beyond the horizon Developments to look out for in the longer term include: • Business tenancies: having successfully tempted fate by mentioning the long-overdue review of the Landlord and Tenant Act 1954 last time, we have since been told to expect a Law Commission consultation paper by the end of the year. • The Levelling-up and Regeneration Bill: we will undoubtedly be hearing much more on this wide-ranging Bill that will shortly become law. In particular, high street rental auctions (the ability for local authorities to force lettings of vacant privately-owned high street property) and the infrastructure levy (which will largely replace community infrastructure levy) have both been the subject of consultations that closed in June 2023. • Climate change: expect to hear more about the various energy efficiency initiatives announced in the government’s Powering Up Britain paper published in March, including the targeting of owner-occupied homes, investment in insulation and replacing gas boilers with affordable heat pumps. We are also promised responses to the long-outstanding consultations on raising the Minimum Energy Efficiency Standard, plus sector-specific Law Society guidance for the real estate sector (following the recent publication of the practice note mentioned last time). • Stamp duty land tax: we still await the final outcome following the consultation on possible changes to the treatment of mixed property purchases (ie purchases that involve both residential and non-residential property) and on options for reforming multiple dwellings relief. Bill Chandler is a professional support lawyer at Hill Dickinson LLP Photo by Kellie Churchman/Pexels