UK commercial property lease structures: Landlord and tenant mismatch

UK commercial property lease structures have come under considerable scrutiny during the past decade since the property crash of the early 1990s. In particular, tenants complained that the system was unfair and that it has blocked business change. Government is committed, through its 2001 election manifesto, to promote flexibility and choice in the commercial property lettings market and a new voluntary Commercial Leases Code of Practice was launched in April 2002. This paper investigates whether occupiers are being offered the leases they require or whether there is a mismatch between occupier requirements and actual leases in the market. It draws together the substantial data now available on the actual terms of leases in the UK and surveys of corporate occupiers' attitude to their occupation requirements. Although the data indicated that UK leases have become shorter and more diverse since 1990, this is still not sufficient to meet the current requirements of many corporate occupiers. It is clear that the inability to manage entry and exit strategies is a major concern to occupiers. Lease length is the primary concern of tenants and a number of respondents comment on the mismatch between lease length in the UK and business planning horizons. The right to break and other problems with alienation clauses also pose serious difficulties for occupiers, thus reinforcing the mismatch. Other issues include repairing and insuring clauses and the type of review clause. There are differences in opinion between types of occupier. In particular, international corporate occupiers are significantly more concerned about the length of lease and the incidence of break clauses than national occupiers and private-sector tenants are significantly more concerned about leasing in general than public-sector occupiers. Proposed solutions by tenants are predictable and include shorter leases, more frequent breaks and relaxation of restrictions concerning alienation and other clauses. A significant number specify that they would pay more for shorter leases and other improved terms. Short leases would make many of the other terms more acceptable and this is why they are the main concern of corporate occupiers. Overall, the evidence suggests that there continues to be a gap between occupiers' lease requirements and those currently offered by the market. There are underlying structural factors that act as an inertial force on landlords and inhibit the changes which occupiers appear to want. Nevertheless, the findings raise future research questions concerning whether UK lease structures are a constraining factor on UK competitiveness.

Intellectual property law on architectural design in collaborative design communication as digital assets

Digital Economy is one of the crucial elements promoted by the Digital Britain Report June 2009 and its Implementation Plan August 2009 in order to maintain and further the UK’s position as one of the world’s leading digital knowledge economies. Therefore, the application of Digital Technologies is high in the agenda. As pervasive digital technologies become more widely available, it becomes increasingly important to understand the legal implications of digital assets produced via digital technologies in collaborative design communication. Architects and engineers depend on intellectual property law to protect their original works. Copyright protection is automatic once a tangible medium of expression in any form of an innovative material, conforming the Copyright Designs and Patents Act 1988, is created. Although copyright law provides automatic protection to all original architectural plans, the limitation is that it only protects the expression of ideas but not the ideas themselves. The purpose of this research is to explore how effective the UK’s copyright law regime is for protecting the rights and interests of architects and engineers in their works as digital assets. The UK’s copyright law is ripe for modernisation not only to protect the rights of designers but also to further UK’s position in digital economy.

Are property agents to blame for upward only rent reviews?

In negotiating commercial leases, many landlords and tenants employ property agents (brokers) to act on their behalf; typically these people are chartered surveyors. The aim of this paper is to explore the role that these brokers play in the shaping of commercial leases in the context of the current debate in the UK on upward only rent reviews. This role can be described using agency theory and the theories of professionalism. These provide expectations of behaviour which show inherent tensions between the role of agent and professional, particularly regarding the use of knowledge, autonomy and the obligation to the public interest. The parties to eleven recent lease transactions were interviewed to see if the brokers conformed to the expectations of agency theory or professionalism. Brokers that acted for industrial and office tenants behaved as professionals in using their expertise to determine lease structures. However, those acting for landlords and retail tenants simply followed instructions and behaved as conduits for their clients, a role more usually associated with that of an agent within the principal-agent relationship. None of the landlords’ brokers saw themselves as having responsibilities beyond their clients and so they were not promoting the discussion of alternatives to the UORR. The evidence from these case studies suggests that agents are not professionals; to behave entirely as an agent is to contradict the essential characteristics of a professional. While brokers cannot be held entirely responsible for the lack of movement on the UORR, by adopting predominantly agent roles then they must take some of the blame. However, behind this may be a much larger issue that needs to be explored; the institutional pressures that lead to professionals behaving in this way.

Housing or property? The dynamics of housing policy and property principles in the right to buy

This paper examines the interplay and tension between housing law and policy and property law, in the specific context of the right to buy (RTB). It focuses on funding arrangements between the RTB tenant and another party. It first examines how courts determine the parties' respective entitlements in the home, highlighting the difficulty of categorising, under traditional property law principles, a contribution in the form of the statutory discount conferred on the RTB tenant. Secondly, it considers possible exploitation of the RTB scheme, both at the macro level of exploitation of the policy underpinning the legislation and, at the micro level, of exploitation of the tenant. The measures contained in the Housing Act 2004 intended to curb exploitation of the RTB are analysed to determine what can be considered to be legitimate and illegitimate uses of the scheme. It is argued that, despite the government's implicit approval, certain funding arrangements by non-resident relatives fail to give effect to the spirit of the scheme.

Futures trading, spot price volatility and market efficiency: evidence from European real estate securities futures

In 2007 futures contracts were introduced based upon the listed real estate market in Europe. Following their launch they have received increasing attention from property investors, however, few studies have considered the impact their introduction has had. This study considers two key elements. Firstly, a traditional Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model, the approach of Bessembinder & Seguin (1992) and the Gray’s (1996) Markov-switching-GARCH model are used to examine the impact of futures trading on the European real estate securities market. The results show that futures trading did not destabilize the underlying listed market. Importantly, the results also reveal that the introduction of a futures market has improved the speed and quality of information flowing to the spot market. Secondly, we assess the hedging effectiveness of the contracts using two alternative strategies (naïve and Ordinary Least Squares models). The empirical results also show that the contracts are effective hedging instruments, leading to a reduction in risk of 64 %.

The blended approach to real estate allocations: performance implications of combining an exposure to German Spezialfonds with Global Listed Real Estate Securities

This paper seeks to increase the understanding of the performance implications for investors who choose to combine an unlisted real estate portfolio (in this case German Spezialfonds) with a (global) listed real estate element. We call this a “blended” approach to real estate allocations. For the avoidance of doubt, in this paper we are dealing purely with real estate equity (listed and unlisted) allocations, and do not incorporate real estate debt (listed or unlisted) or direct property into the process. A previous paper (Moss and Farrelly 2014) showed the benefits of the blended approach as it applied to UK Defined Contribution Pension Schemes. The catalyst for this paper has been the recent attention focused on German pension fund allocations, which have a relatively low (real estate) equity content, and a high bond content. We have used the MSCI Spezialfonds Index as a proxy for domestic German institutional real estate allocations, and the EPRA Global Developed Index as a proxy for a global listed real estate allocation. We also examine whether a rules based trading strategy, in this case Trend Following, can improve the risk adjusted returns above those of a simple buy and hold strategy for our sample period 2004-2015. Our findings are that by blending a 30% global listed portfolio with a 70% allocation (as opposed to a typical 100% weighting) to Spezialfonds, the real estate allocation returns increase from 2.88% p.a. to 5.42% pa. Volatility increases, but only to 6.53%., but there is a noticeable impact on maximum drawdown which increases to 19.4%. By using a Trend Following strategy raw returns are improved from 2.88% to 6.94% p.a. , The Sharpe Ratio increases from 1.05 to 1.49 and the Maximum Drawdown ratio is now only 1.83% compared to 19.4% using a buy and hold strategy . Finally, adding this (9%) real estate allocation to a mixed asset portfolio allocation typical for German pension funds there is an improvement in both the raw return (from 7.66% to 8.28%) and the Sharpe Ratio (from 0.91 to 0.98).

Related party transactions under Pt 2E of the corporations act: time for reconsideration

The related party provisions under Pt 2E of the Corporations Act 2001 were introduced in 1992 to protect the resources of companies and shareholder interests by requiring that directors disclose financial benefits given to 'related parties' -- those capable of exercising significant influence over the giving of such benefits. The contention of the authors in this article is that Pt 2E has been unsuccessful in achieving its intended purpose, and should be repealed in its entirety. The authors argue that the various provisions of Pt 2E are so confusing and convoluted that they potentially violate the rule of law virtue that laws must be promulgated in a manner that is clear, so that it is apparent from reading the laws what one must do. Further, [*2] the manner in which Pt 2E is presently drafted, especially the definition of related party, fails to reflect the purpose behind the provisions, making the overall operation of Pt 2E ineffective. It is also argued that Pt 2E is superfluous since the fiduciary duty of directors to disclose a conflict of interest, and to a lesser extent the requirement for disclosure of material personal interests under s 191 of the Corporations Act, adequately deal with the transactions presently attracting the attention of Pt 2E. In light of all this, it is contended that the law would be demonstrably improved by repealing Pt 2E.

Directors' personal liability-is the proposed amendment to Section 197 acceptable when compared with Hanel v O'Neill?

On 2 June 2005, the Australian Government announced a proposal to amend s. 197 of the Corporations Act. This is to overturn the decision in Hanel v. O'Neill ("Hanel") where the South Australian Supreme Court has expanded the circumstances in which directors of trustee companies can be held personally liable for the debts under the current section 197(1) of the Corporations Act 2001 (Cth). The multiple interpretations presented in Hanel highlighted the uncertainty of s. 197 and this uncertainty is heightened in at least two subsequent cases. The article provides a detailed analysis of how the decision in Hanel is affecting the directors' freedom of management and suggests some precautionary measures that the directors could take as protection against creditor's actions under s. 197. The author welcomes the proposed amendment because the new section will create certainty for directors as to. the scope of their potential personal liability, but contends that the substance of the proposed s. 197 is not acceptable as there is potential for abuse by directors of certain trustee companies.

Factors influencing the direct costs of property trust IPOs

Underwriting, legal, accounting and valuation costs average around 3.3%, 0.39%, 0.23% and 0.12% of proceeds raised and are substantial costs to property trust initial public offering (IPO) issuers. As such, identifYing factors that influence these costs is important. This paper investigates factors influencing these costs as well as the total direct costs of raising equity capital by property trust IPOs in Australia from 1994 to 2004. The results suggest clear economies of scale in direct costs. In addition, IPOs that employ more debt are likely to have higher capital raising costs while those that have proportionally higher net asset values and offer stapled securities (and likely to be engaged in property development activities) have lower capital raising costs.

Extreme surfing : personal and psychological aspects of big wave riders

This qualitative study investigated personal and psychological aspects of big wave riders. A cross-sectional design with non probability purposive sampling was used to gain personal interviews with 32 elite surfers who regularly ride big, life threatening waves. Each athlete was asked three open questions: 1. What do you think are the most important qualities and attributes a surfer needs for riding big waves? 2. What type of mindset is best for riding big waves?, and 3.What motivates you to ride big waves? Content analysis of the taped interview transcripts revealed seven key qualities and attributes including having a thrill seeking, confident and goal oriented personality, a high level of mental strength and control, and an intimate relationship with the ocean. The best mindset included an individually defined arousal level, a committed attitude, and a simple, yet highly aware, focus. Motivations were primarily intrinsic, though drives indicative of a behavioral addiction to the act of riding big waves also emerged. Evidence of common developmental stages for riding big waves also arose from the interviews. Optimal mental approach and preparation techniques are discussed that will enable big wave riders, and other extreme athletes, to more safely and successfully manage extreme situations.

Carbon rights as new property: the benefits of statutory verification

This paper examines the different ways in which carbon rights have been verified as property interests. A carbon right is a new and unique form of land interest that confers upon the holder a right to the incorporeal benefit of carbon sequestration on a piece of forested land. Carbon sequestration refers to the absorption from the atmosphere of carbon dioxide by vegetation and soils and the storage of carbon in vegetation and soils. Innovative legislation has been introduced in each state seeking to separate the incorporeal benefit of carbon sequestration from the natural rights flowing from land ownership. The fragmentation of land ownership in this way is a constituent of broader climate change strategies and is particularly important for an Australian emissions trading scheme where carbon rights will acquire value as tradable offsets. This paper will explore the different legislative responses of each state to the proprietary characterisation of the carbon right as a land interest. It will argue that verifying the carbon right as a new statutory property interest, in line with the approach set out in the Carbon Rights Act 2003 (WA), is preferable to aligning it with preconceived categories of common law servitude. By articulating the  carbon right as a new form of statutory interest, unique in status and form, its sui generis character is more accurately reflected. Further, statutory validation of the carbon right as a new land interest is more efficient as legislative rules are more visible and therefore come to the attention of other market participants more quickly and at a lower cost without the burden and complexity associated with expressing the right through the prism of pre-conceived and non-responsive common law forms.

Creating an Innovation Exception? Copyright Law as the Infrastructure for Innovation

Innovation is clearly essential for economic growth, cultural development and personal autonomy. Yet the relationship between innovation and copyright law in Australia is uncertain and perhaps overly restrictive. After the Australia-United States Free Trade Agreement Australia now has a copyright regime that can broadly be
described as a lock up and lock out scheme. Whilst the Australian Government has paid lip service to innovation the Australian Copyright Act, which provides the essential legal infrastructure for innovation, now privileges the rights of owners over the interests of the public. In particular, the Copyright Act neglects to create a specific exception for technology innovation. If there is to be some coherence in Australia
thinking with regards to innovation and copyright policy it is crucial that such an exception be created. Arguably, it is possible that such an exception can withstand the scrutiny of the three step test. At present the only ‘exception’ that can be said to exist is in the form of the limits of the authorisation liability provisions or the ISP safe harbour scheme. Australian copyright law needs something more substantial than that
and needs for there to be a clear hierarchy between the exceptions and the liability provisions.

Muslim personal law

The article examines the development of the legalism of Personal Law and provisions of community rights for disparate communities in modern India, and the role of religion and communal politics in their perpetuation. The case study undertaken here is specifically the Muslim community’s Constitutionally-sanctioned Personal law (MPL). MPL has not been without criticisms both from outside and within the community, particularly in respect of gendered disadvantages that arise within the provisions safeguarding the practices, which cover marriage, divorce, alimony, inheritance, custody, succession, and so forth.

Locke, Kierkegaard, and the phenomenology of personal identity

Personal Identity theorists as diverse as Derek Parfit, Marya Schechtman and Galen Strawson have noted that the experiencing subject (the locus of present psychological experience) and the person (a human being with a career/narrative extended across time) are not necessarily coextensive. Accordingly, we can become psychologically alienated from, and fail to experience a sense of identity with, the person we once were or will be. This presents serious problems for Locke’s original account of “sameness of consciousness” constituting personal identity, given the distinctly normative (and indeed eschatological) focus of his discussion. To succeed, the Lockean project needs to identify some phenomenal property of experience that can constitute a sense of identity with the self figured in all moments to which consciousness can be extended. I draw upon key themes in Kierkegaard’s phenomenology of moral imagination to show that Kierkegaard describes a phenomenal quality of experience that unites the experiencing subject with its past and future, regardless of facts about psychological change across time. Yet Kierkegaard’s account is fully normative, recasting affective identification with past/future selves as a moral task rather than something merely psychologically desirable (Schechtman) or utterly contingent (Parfit, Strawson).

The act of giving: a pilot and feasibility study of the My Life Story programme designed to foster positive mental health and well-being in adolescents and older adults

Twelve pairs of adolescent students were linked to an older adult in aged care in this pilot study on intergenerational interaction. Triads met weekly for eight weeks with the aim of writing a Life Review Book for the older adult. At the conclusion of the study, participants were interviewed to gain an understanding of their experiences and meaning of the programme. Thematic analysis of the interviews revealed four major themes: breaking down the stereotypes, recognition of heterogeneity, satisfaction from ‘making the effort’ and personal gain through making a contribution. Measures of psychological well-being were also administered pre- and post-delivery of the programme. This revealed that both age groups could and would complete all aspects of the programme. It was concluded from the findings that the intergenerational programme is feasible in the context of adolescent and older adult intergenerational relationships, and a potential influence on well-being for those who take part.