An interview with….Suzan Yildiz

Sarah Rock - May 3rd, 2013

Continuing our series of interviews, Constructive sat down with Suzan Yildiz, the newest recruit to Olswang’s Real Estate team.

1. As a new recruit to Olswang can you tell us about your background in planning?

I forged my career in house with LPAs which provided exposure to every aspect of planning law. For the last five years I led a team focussed on high profile regeneration and development projects including London Bridge, Canada Water, London South Central. My clients often had multiple hats on projects: significant landowner (with over £3 billion of real estate assets), promoter of development, policy and decision maker. Working for a regeneration intensive borough provided an exceptional continuum to my work from involvement at policy level through to delivery of projects.  I hope to bring these insights to my work at Olswang.

2. What has been the highlight of your career so far?

Having worked on London Bridge Quarter, I was lucky to be invited to a preview of ‘the View at the Shard’ recently. From this iconic (and lofty) platform, it’s possible to experience the City in a fresh way. It was almost a showcase of our work in recent years.  I could see tangible outcomes from every angle, including my own contribution to regeneration, to local communities, to shaping the London skyline. I feel proud that this legacy will remain for posterity.

3. Why did you join Olswang and how do you hope to shape your planning practice here?

Planning can add, or in the wrong hands reduce, value. In these challenging economic times investors need to safeguard their revenue and capital, developers need to realise the development potential of land to see returns. My strong expertise of planning and development work, would compliment a leading Real Estate practice (with noted practitioners) in offering a full service to our developer and investor clients, from strategic advice through to planning and construction. I am excited about building on these synergies to develop a proactive, progressive practice that is passionate about planning.

4. What predictions do you have for the planning world over the coming years?

By 2014 the Community Infrastructure Levy (CIL) will become widespread, having a significant impact on development costs. This complex area of law will need to be factored in by developers and investors from the outset in selecting sites, structuring deals or promoting development.

Student housing will remain a growth area attracting both developers and investors given the support at strategic policy level, lower development costs and willingness of entrepreneurial investors to fund these schemes.

The latest Government proposals to allow permitted development rights (i.e. automatic permission) for change of use from commercial to residential would remove protection for employment space when evidence points to need at local level. This may result in a brief spurt in housing, however the long term effects on SME’s of sacrificing local employment space could prove damaging for local economies.

5. Would you rather go back in time to meet your ancestors or go into the future to meet your great-grandchildren?

Ironically despite my emphasis on the progressive, the past informs the present and the future. We must take the best of tradition without letting it impede innovation. I grew up in the Balkans, my ancestry hailed from the Ottoman Empire which in its golden age was impressively progressive.  Suleiman the Magnificent oversaw artistic, literary, political and legal innovations. In architectural terms, they employed a balance of form and function, still central to contemporary architecture today. I would therefore go back to shake hands with my ancestors and congratulate them on such inspiring feats which still inform progress (not to mention my sense of pride)!


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CIOB CPC 2013 launched

Nick Lane - May 1st, 2013

I am delighted to say that the new Complex Projects Contract (“CPC”) was successfully launched last week at two well-attended events at the Chartered Institute of Building’s HQ in Ascot and Olswang’s London office. Copies of the contract are available from the CIOB’s bookshop.

The launches were chaired by Adam Constable QC of Keating Chambers and the speakers were its authors, Keith and Roy Pickavance, Francis Ho and me. Needless to say, I had drawn the short straw speaking about dispute resolution since CPC is drafted to minimise the likelihood of disputes arising …

The audiences at the launch events were knowledgeable and open-minded and some searching questions were asked in the Q&A sessions at the end of each event. The reaction overall seemed positive. There was much interest shown in innovative features of CPC, such as the new roles involved like the Project Time Manager, and the tools it relies on such as the dynamic Working Schedule with Levels of Effort, the linked Contractor’s Pricing Document and the Issue Resolution procedure.

But the proof of the pudding will be in the eating. Since the contract is designed for complex projects and the lead-in time for such projects tends to be lengthy, it will be a little time before CPC’s many innovations start to bear fruit. Potential users will need to familiarise themselves with CPC first.

Because the contract places demands in terms of, for example, time management skills, the CIOB plans to focus on ensuring that appropriate educational resources are available for those who want to use the new contract. There is, for example, already a course available to qualify professionals to act as Project Time Managers under the contract. More details about this can be found here. There are also planned to be webinars devoted to CPC and the London Branch of the CIOB will run a workshop event aimed at early adopters. More on these to follow.

In the meantime, if you are interested in finding our more about the CPC, please do not hesitate to contact either me or Francis.



 
				
			
 
				
			
 
				 
			

	

								

				
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Shedding light on development

				
Warren Gordon - April 26th, 2013
 
             

             

             				 

            	
            

                
				


Property development needs a lift. The construction industry nationwide is in crisis. Finance is in short supply. The general economic malaise impacts on occupier demand. There is an uninspiring development pipeline. While there are pockets of developmental optimism, the overall forecast is gloomy.


To compound it all, even if there is a viable development project, this can be delayed or even scuppered by fears or threats of injunctions and damages claims brought by property owners alleging infringement of their rights to light.


Cases in recent years have reinforced the position that injunctions are the primary remedy for infringements of rights to light and developers should not assume that damages alone provide an adequate remedy. Developers are concerned that some property owners exploit their rights, even though the infringement is insignificant, to extract as much cash as possible. The more progressed the development, the more valuable those rights may become.


The consequential adverse impact on development was significant enough for Government to ask the Law Commission to consider whether the situation can be ameliorated.


The Law Commission’s consultation proposals are imaginative, yet perceived controversial by some. In particular, the prospective abolition of the acquisition of rights to light based on prescription (where windows have received light for 19 years and one day), while providing greater certainty for developers, has caused concern. It is unlikely that rights to light will be expressly granted on transactions and removing the prescriptive basis exposes property owners to serious infringements of their light. The impact will be all the greater in a domestic context.


There has been general approval of the proposals to provide greater clarity through legislation on the factors that a court should consider in deciding whether the grant of an injunction is disproportionate in rights to light cases, including owner’s delay and the use of artificial light.


The notice of proposed obstruction procedure is to be welcomed as a means of forcing owners to play their injunction card. Put up or shut up! However, the procedure is administrative and potentially involves not just the owner, but countless tenants in a multi-let situation.


The challenge of balancing the rights of property owners against the need to boost development and the economy is a very real one and the Law Commission has made a bold effort to meet it. Whatever your view, please make it known to the Law Commission by emailing propertyandtrust@lawcommission.gsi.gov.uk. The closing date is 16 May 2013. Please click here for the consultation.


For a more detailed review of the Law Commission’s consultation please click here.


 
				
			
 
				
			
 
				 
			

	

								

				
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Guaranteed price or maximum confusion?

				
Francis Ho - April 22nd, 2013
 
             

             

             				 

            	
            

                
				


The TCC recently reviewed a guaranteed maximum price (GMP) provision in AMEC Group Ltd v Secretary of State for Defence.


GMP agreements can be used when the project cost cannot be judged accurately, perhaps because design development is incomplete or because it is not possible to quantify all major risks before works commence. The contractor will be paid its actual costs plus a fee.


Some employers are uncomfortable with open-ended costs so a GMP can be agreed. Should costs exceed the GMP the contractor bears the cost overrun. However, if it finds savings, the contractor can reap rewards. It’s easy to see then how GMP arrangements can appeal. The employer achieves price certainty while the contractor is incentivised for efficiencies.


An employer can end up paying more than the GMP if there are instructed variations or acts of employer prevention. In this case, the contract’s pricing mechanism should have clearly set out how the overspend would be apportioned. Unfortunately, as Coulson J stated, it was “unusual” and “badly-worded”.


There was no dispute that the first £50m of overrun above the GMP was agreed to be borne by the contractor. Over this sum, however, liability would revert back to the employer. Things then become murkier. Clause 9.2.6 stated that, up to reaching the GMP, the parties would split the difference between the target cost and actual costs. The contractor would then be liable for all costs in discharging its obligations, subject to the £50m cap. Above this level, the drafting left doubt as to whether the employer’s liability was to reimburse all the contractor’s costs or only its actual costs. This was a major distinction since the latter were recoverable only if reasonably and properly incurred.


It was not ultimately necessary to rule on the adequacy of the drafting. The dispute over the cost overrun had previously been referred to an adjudicator whose interpretation was that the employer’s liability was for actual costs. The contractor subsequently referred the same issue to a three-person disputes review board. Two agreed with the adjudicator. One dissented.


The TCC heard the contractor’s appeal of the arbitrators’ award, on the argument that they had erred on a point of law under section 69 of the Arbitration Act 1996. This is a difficult test to pass and the court was not sufficiently persuaded. The contractor’s challenge was rejected.


The judgment emphasises the difficulties in drafting GMPs. If the requisite contract provisions are not expressed in unambiguous terms there can be costly implications for those involved.


 
				
			
 
				
			
 
				 
			

	

								

				
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2013 Budget Commentary

				
Peter Clyde - March 21st, 2013
 
             

             

             				 

            	
            

                
				


Olswang’s award-winning Tax team are analysing the Chancellor’s 2013 Budget on their Tax blog. See recent posts on high-value residential property and investement funds.


 
				
			
 
				
			
 
				 
			

	

								

				
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The New Construction Industry Council’s BIM “Protocol”

				
Sarah Rock - March 20th, 2013
 
             

             

             				 

            	
            

                
				


The first edition of the CIC’s Building Information Model (BIM) Protocol (abbreviated to “CIC/BIM Pro”, but here referred to as “the Protocol”) was published without fanfare at the end of February this year.  The Protocol was commissioned as part of the CIC’s response to the Government’s BIM Strategy, which set the ambitious target for the construction industry to have “reached the ability to deliver information and services of at least that of Level 2 in the maturity model” where supplying construction services to the Government.  The stated purpose of the Protocol is to “enable the production of Building Information Models at defined stages of a project“.  It also claims in the rubric that using the Protocol “will support the adoption of effective working practices in Project Teams“.


While the CIC document is called a “Protocol”, it is not a protocol in the proper sense of the word.  A protocol is an accepted or established code of procedure.  The CIC document is a bundle of legal obligations, liabilities and – perhaps inevitably – limitations of liability.  From a practical viewpoint, anyone expecting to find something in the way of “effective working practices” (to use the CIC’s words) may be disappointed.  In fact, all practical requirements, such as the Levels of Data and Information Requirements, are banished to the two Appendices, and these will need to be carefully considered and completed by anyone using the Protocol.  And there are no default provisions in those Appendices, which is a somewhat startling omission, especially when one reads the rubric to Appendix 2, which states “Parties may choose to include further detail if they require“.


At first blush, the Protocol raises all sorts of interesting questions and the Constructive team will be looking in more detail at its contents over the coming weeks …


 


 
				
			
 
				
			
 
				 
			

	

								

				
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The new IChemE contracts

				
Francis Ho - March 13th, 2013
 
             

             

             				 

            	
            

                
				


New editions of the Institution of Chemical Engineers’  UK Forms of Contract for Process Plants were recently published. The revised contracts include the Red Book, Green Book and Burgundy Book and two sub-contracts, the Yellow and Brown Books.


These are intended for procuring process plants. This covers a wide range of industrial facilities from oil refineries, power plants and food manufacturing plants to pharmaceutical production plants and desalination plants. It is vital that such facilities, when completed, operate as expected. Consequently, the contracts provide for detailed testing and takeover requirements. These attributes also make them suitable for other projects where a minimum level of performance is important, such as tunnelling and wind farms.


The 2013 update serves two purposes. Structure and drafting have been standardised. Furthermore, a number of clauses have been revamped to reflect best practice as well as the amendments to the Construction Act, which came into force in 2011. The changes include:


    

  • An express co-operation clause across the suite;
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  • Clearer performance test requirements in all the contracts other than the Brown Book;
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  • An overhaul of the all risks insurance provisions;
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  • Making the indemnities in relation to patents and similar rights reciprocal;
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  • Adjustments to events entitling contractors to an extension of time and limitations on liability and termination provisions;
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  • Mutual indemnities for clean-up costs caused by hazardous or polluting material.
    • 



It is likely that the contracts’ international editions will similarly be updated in due course.


While the amendments are generally sensible, not all will appeal to all potential users. The co-operation clause, for example, requires the parties to deal with each other fairly, openly and in good faith. Such wording may be contentious, especially in light of the High Court’s decision in Compass Group v Mid Essex Hospital Services NHS Trust , which confirmed that such clauses can conflict with other contract provisions.  The reality, however, is that the industry is moving towards more collaborative relationships and good faith is considered by many to be an important component of that.


On the other hand, some may find it a little surprising that such matters as collateral warranties, prohibited materials, professional indemnity insurance, BIM and performance security are still not covered.


While mainly evolutionary, this remains a useful update which reinforces the strengths of the suite. The update should therefore hopefully serve as a timely reminder of the continued importance of this suite of contracts.


 
				
			
 
				
			
 
				 
			

	

								

				
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An invitation to the launch of the CIOB Complex Projects Contract 2013

				
Nick Lane - February 19th, 2013
 
             

             

             				 

            	
            

                
				


The CIOB CPC 2013 Contract hits the presses in April 2013.  This new First Edition follows feedback from last year’s industry consultation process on the Review Edition.  Members of Olswang’s Construction Team were deeply involved in reviewing and addressing the many comments and queries.    


The new construction contract will launch at 2 introductory sessions at which the authors, Keith Pickavance, Roy Pickavance, Nick Lane and Francis Ho (the last two being members of our Construction Team), will explain its background, intended use, key themes, and features and major differences between it and other standard forms currently available.  Each session will be completed by a Q&A session, chaired by Adam Constable QC of Keating Chambers.     


The first session takes place at the CIOB’s headquarters in Ascot on the afternoon of 23 April 2013 and the second at Olswang’s London office on the morning of 25 April 2013.  The sessions are free of charge and each attendee will receive a complementary copy of CPC 2013 and its User Notes.                   


Please visit the CIOB webpage below to obtain further information on the introductory sessions and to reserve a place:


www.ciob.org.uk/CPC                                                                                                                                                                                                   


We look forward to seeing you there.


 
				
			
 
				
			
 
				 
			

	

								

				
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EPCs or DECs – tools for resilience?

				
Kathryn Johns - January 31st, 2013
 
             

             

             				 

            	
            

                
				


Energy Performance Certificates (EPCs) are estimated ratings of a building’s potential energy performance and a requirement on the sale or letting of any building. Display Energy Certificates (DECs) are certificates displayed in the reception of a building showing its actual energy performance within a recent twelve month period.


While an EPC is commonly regarded as a necessary but a relatively unimportant part of a new lease or sale of a building, it is important to remember they will be the key to letting or selling a building once regulations intended to introduce minimum energy efficiency standards are introduced in a few years’ time. Although not yet confirmed, it is likely that any building or part of a building which has an energy efficiency rating of “F” or below will not be able to be legally let or sold.


The aim of the legislation is to address the fact that Britain is one of the most energy inefficient nations in Europe. For any company or investor with long term property interests, now would be a good time to invest in updated EPCs across the portfolio to identify and assess any risks, as well as plan any capital expenditure needed to address any concerns or problems raised by the EPC certificates. Any properties with a poor rating may find that their capital valuation is adversely affected if a lease cannot be assigned or a freehold sold without significant capital expenditure on part of the landlord or seller.


Why not implement the recommendations highlighted by the certificates, such as the installation of new energy efficient lighting or triple glazing, to future proof the asset now? These works carried out today could also save both the landlord and the tenant significant occupational energy costs in the long term.


 
				
			
 
				
			
 
				 
			

	

								

				
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A taxing start to the year for Newham’s residential landlords

				
Benjamin Shore - January 2nd, 2013
 
             

             

             				 

            	
            

                
				




London Borough of Newham’s scheme requiring all private residential landlords to obtain a licence has commenced. The plan covers around 35,000 private tenancies (roughly one third of the Borough’s households) and aims to tackle the increasing problem of ‘rogue’ landlords and poor quality accommodation. The council has cited a ‘strong correlation’ between poorly administrated, low quality property and anti-social behaviour.


The intended result is that landlords will take a more pro-active approach not only towards their lettings but also towards the anti-social behaviour of their tenants, giving warnings about conduct and ultimately terminating leases, if necessary.


The licensing regime commenced on 1 January 2013, although landlords could register in advance to benefit from reduced fees. Landlords paid £150 for a five year licence if they applied before 1 January 2013, and £500 if they register after 1 January. Those who fail to acquire a licence face fines of up to £20,000. Landlords will require one licence for each property they let, meaning costs could escalate for those with extensive portfolios in the Borough.


Those who do not register for the scheme voluntarily will be subject to monitoring and inspections in a bid to improve the standard of their tenancy management, and will only be able to obtain a one year licence.


Sir Robin Wales, Newham’s Mayor, claims that “good landlords have nothing to fear from this scheme. For the bad ones, this is a clear message they must clean up their act – or pay the price.”


It is unclear exactly how a licensing scheme will help identify unscrupulous landlords, particularly as it is the bad landlords who exploit the type of tenant least likely to have the knowledge or means necessary to challenge them and, despite its good intentions, this scheme produces a disporportionate increase in bureaucracy and costs for landlords and will include even short term involuntary landlords. Those who temporarily lease properties to derive some income when they can not sell a property will be required to incur the time and financial cost of obtaining a licence.


It remains to be seen whether this will be adopted by other London Boroughs and so its potential impact will hopefully be limited.




 
				
			
 
				
			
 
				 
			

	

								

				
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