Land development and environmental regulation are primarily governed by statutory legislation, which in turn stipulates the various bodies with relevant authority.
In the case of land development, the main body with powers to regulate development is the local planning authority for the relevant area (usually the local district council) although there is a separate ‘track’ direct with a central government body to oversee large infrastructure-type projects.
In London, the Greater London Authority and the Mayor’s office also have an overarching role in relation to developments of “potential strategic importance.”
In relation to environmental regulation, the principal body overseeing environmental issues is the Environment Agency, although in some cases, the local district council for the relevant property will also have powers of regulation.
The principal statute governing environmental issues in relation to real estate in England and Wales is the Environmental Protection Act 1990 (which creates a contaminated land regime). However, there are numerous other statutes dealing with specific aspects of land that either supplement the Environmental Protection Act or create standalone regimes in their own right, dealing with such issues as asbestos, pollution prevention and control, waste, water pollution, protection of wildlife, and habitats and carbon reduction.
The principal permit required to either build property or use it in a particular way is a planning permission (which is usually authorized by the local planning authority for the relevant property). Virtually all building work also requires building regulation consent, which is again controlled by the relevant local authority.
Specific uses of property by an occupier may also give rise to the requirement for further permits. In particular, the use for the sale of alcohol or operation of a property as a restaurant will usually require a premises and/or restaurant license and also, possibly, food hygiene permits.
Yes. The broad principle under the Environmental Protection Act 1990 is that the person who caused any relevant contamination has the primary responsibility for cleanup. However, the land owner from time to time also has a co-existent liability (which may be enforced if the actual polluter cannot be found) simply through ownership of the land. Some form of environmental risk assessment is almost always therefore required on the acquisition of a property in England and Wales.
Yes. In March 2015 the UK Government introduced legislation prescribing minimum energy performance requirements for existing buildings. There are already detailed requirements for the energy efficiency characteristics and certification of new buildings (which are enforced through the planning consent and building regulation regimes).
Legislation has also been introduced in the last few years, which requires energy performance certificates (giving details of a building’s energy efficiency) to be provided to a purchaser and/or tenant on any transactional sale. However, such certificates are currently only advisory in nature and do not actually require any rectification to be carried out by any party.
From 1 April 2023, new minimum energy efficiency standards regulations mean it will be illegal for landlords to grant a new lease, or to extend, renew or continue an existing tenancy, of a domestic or non-domestic property that does not meet a minimum “E” rating on an energy performance certificate where one exists or is required, unless exemptions apply. A landlord of a non-compliant property will need to make appropriate energy efficiency upgrades or to have carried out an assessment and registered any available exemptions before the relevant lease transaction can be completed, or, in the case of continuation or extension of an existing lease, to avoid penalties. Exemptions available include a cost-effectiveness test for the required works based on a seven-year payback calculation; or where necessary consent cannot be obtained e.g., from the tenant, mortgagees or planning; or if the required improvement works would adversely affect the market value of the property by more than 5%; or if wall insulation improvements would cause structural damage.
Most exemption applications must be renewed every five years or earlier if the existing tenant vacates. Exemptions are personal and non-transferable and therefore any new investor who becomes a landlord of such a property will need to apply for its own exemptions and will be granted a six month temporary exemption in which to do so.
In either case, fines of up to GBP 5,000 are applicable in relation to breaches concerning domestic properties. For non-domestic properties, fines of up to GBP 50,000 are applicable upon initial breach, rising to a maximum of GBP 150,000 per breach for persistent offenders. Note that compliance with the regulations is entirely the responsibility of landlords. Tenants cannot therefore be fined and the validity of any leases granted in breach of the regulations is unaffected.
The same regulations also allow tenants of qualifying residential properties to request consent, under certain circumstances, from their landlords to carry out relevant energy efficiency improvements even where their leases may otherwise prohibit such alterations. Landlords are under a duty not to unreasonably refuse consent to applicable requests but may insist that any such improvements are undertaken by the landlord instead. The rights and obligations are enforceable through the courts but there is no provision for the imposition of financial penalties for non-compliance.
Yes. There is an increasingly strong focus on sustainability of newly constructed and existing buildings (both residential and commercial) in the UK in light of the UK government’s target of net zero carbon emissions by 2050. This is partly being tackled through the building regulation regime, which requires increasingly sophisticated materials to be used in the construction of buildings. It is also being addressed by local planning authorities through the use of sustainability assessments as part of the production of the local development plan. Environmental impact assessments may be mandated before certain types of development are approved for planning permission, allowing the local planning authority to impose mitigation measures to ensure compliance with its sustainability agenda.
Some large UK organizations are already subject to mandatory GHG emissions or other climate-related reporting obligations. Amongst them, the Streamlined Energy and Carbon Reporting (SECR) requirements under the Companies Act 2006 impose obligations on quoted companies, large unquoted companies and large LLPs to gather and report their energy use and carbon emissions data through their annual report for financial years starting on or after 1 April 2019. The SECR requirements are in addition to those which exist under the Energy Savings Opportunity Scheme (ESOS) requiring large organizations meeting certain qualification criteria to carry out audits of their energy use to identify cost-effective energy saving measures.
The Climate Change Levy aims to encourage businesses to reduce their energy usage and increase consumption from renewable energy sources by imposing a carbon tax on non-domestic consumers of certain energy resources (including gas, electricity and solid fuel).
In addition, there are a number of mandatory and voluntary appraisal techniques and codes that developers will increasingly need to comply with to secure planning permission, access funding for a project or comply with end-user sustainability strategies. In the UK, these include the BRE Environmental Assessment Method (BREEAM) for non-residential buildings, Part L (Conservation of fuel and power) of the Buildings Regulations for all buildings and BREEAM Infrastructure (formerly CEEQUAL)'s assessment and award scheme for assessing the energy performance of civil engineering and public realm projects.