Easy-to-overlook challenges and opportunities for UK rural businesses

Mobile phone masts

The new Electronic Communications Code came into force in December 2017, causing considerable concern among landowners fearing wide-ranging rights for telecoms operators over their sites.

However, the reality so far has been less worrying than initially predicted. While some operators have tried to push rents down at renewal, others have acknowledged the greater rights offered by the code and kept rents at current levels.

Among other things the code offers operators the right to upgrade and share their equipment without the landlord’s approval or the need to pay more rent. It also raises the opportunity for operators to ask a tribunal to impose an agreement on a prospective landlord, if such agreement cannot be made through open negotiation.

However, there is also greater protection for landlords, covering non-payment of rent, compensation for damage, and provisions should they want to redevelop the site.

The key for all landowners to remember is that leases of land for phone and broadband apparatus remain open to negotiation. It’s too early for market rents to have been set under the new code, but if your site comes up for renewal, or you are approached over a potential new site, make sure you take professional advice to protect your interests.

If you have telecommunications issues contact Edward Holloway 

Infrastructure projects

Many landowners in the south of England could be affected by the further progress that is being made to upgrade transport links between Oxford and Cambridge.

The Oxford-Cambridge corridor has a world class university at both ends, each surrounded by research and technology companies, with a lot in between too. Radial transport links from the capital are good, with several motorways and train routes, but what is missing are good road and rail links within the corridor itself, something the National Infrastructure Commission was asked to address.

The solution is coming in two forms. The first is to reinstate, upgrade and extend the original Varsity railway line. Phase 1 of the western section from Oxford to Bicester opened in 2015, and consultations on phase 2 to extend this to Cambridge, with a link to Aylesbury, have recently been undertaken. A Transport and Works Act application is expected this summer. The route may one day extend beyond Cambridge.

The Expressway road solution is more complicated and is likely to involve a combination of new routes and upgrades. Several options are on the table, and a preferred route announcement is expected in July.

Unlike the rail scheme, which follows an existing route, the Expressway is more contentious as it includes new routes through the countryside. As with most infrastructure schemes, there will be winners and losers in the compensation and development game.

For more information on this and other infrastructure schemes contact Jonathan Scott-Smith

Drones

Drones are becoming increasingly popular among both casual and commercial users, but while some landowners are keen to embrace the new technology, others are concerned about privacy and nuisance issues.

Landowners do not have rights per se over the airspace above their land, however, they can, of course, control access for take-off and landing.

Further to this, there are Civil Aviation Authority regulations that prohibit drone users from flying within 50 metres (horizontally) of any vehicle, structure or building that is not under the pilot’s ownership/control – though this would not apply to just land.

Drones must also be kept within the pilot’s line of sight at all times – usually up to 500 metres horizontally and 400 feet vertically and they must not recklessly or negligently cause or permit an aircraft to endanger any person or property.

As to what actually constitutes a nuisance or invasion of privacy is unfortunately a matter of what is reasonable – for both parties.

Anyone flying a drone for commercial purposes, must have first obtained permission from the CAA (having proved your competency in understanding the rules and regulations surrounding drone use and passed a practical test).

This is granted for a year and must be reapplied for each year. If you simply want to fly your own drone (albeit still subject to CAA regulations) for your own enjoyment, then there are no licensing requirements. However, this is due to change shortly with the government announcing that it plans to introduce a drone register.

This will affect all operators of drones over 250g (most casual users), who must not only register, but also undertake a competency test. Knight Frank use drones on clients’ estates to undertake mapping, surveying, building/roof inspections, 3D modelling and the provision of high resolution aerial imagery.

For drone, mapping or surveying enquiries contact Michael McCullough 

Employer pension contributions 

From 6 April 2018 the minimum rate for automatic enrolment pensions increased to a combined total of 5%. This will affect all businesses, including rural estates and country houses with staff.

The employer’s contribution rose from 1% to 2%, while employees’ contributions jumped from 1% to 3%. The next phase, in April 2019, will see employers’ rates rise to 3% while employees will have to pay 5%.

There are two implications of these increases: the cost of employment continues to rise, which could encourage more external contracting of staff (see other employment matters).

In addition, employees will likely think much harder about sacrificing that proportion of salary, and may look at setting up private pensions and savings, and simply opting out altogether.

From April 2018 employers have been able to choose to cover the whole contribution themselves including the employee’s contribution. This can be a good way to secure long-term service and to look after faithful employees in their retirement. However, they cannot prohibit employees from enrolling into the pension scheme.

The next big question will be how this develops from 2020 onwards. The government needs to find ways for people to pay for retirement outside of the state pension, and it may be that the ability for the employee to opt out is reviewed by policy makers. Watch this space.

Other employment matters

Employment costs increased in line with inflation from 1 April 2018, with the National Living Wage (for staff aged 25 and over) rising from £7.50/hour to £7.83/hour, and the National Minimum Wage (for those aged 21-24) increasing from £7.05/hour to £7.38/hour. Other age brackets also saw pay rises.

While there is no escaping these increases, it’s important that rural estate owners ensure they are meeting legal requirements and add the extra costs into forward budgets.

Employers might also want to note that employees no longer have to pay any fees for taking a case to an employment tribunal. As a result tribunals are reporting a steep increase in the number of claims.

To avoid a potential claim, one point worth considering is the Working Time Regulations. There are duties that may be expected of employees out of normal working hours, such as being a registered keyholder or running errands.

Unless this is made clear in the list of duties, an employee may argue that the hours they work surpass the maximum average of 48 hours a week. At worst, they could argue that they were never off shift, meaning their wages were diluted beneath the minimum wage, and leading to a claim for backdated pay.

Another issue that is increasingly rearing its head is whether staff are employed or selfemployed. HMRC has issued guidance to help people decide if staff are self-employed or not – one consideration is whether they run their business for themselves and take responsibility for its success or failure.

It is worthwhile checking the status of all workers, and ensuring their contracts accurately reflect their working practices on the ground. If workers are retrospectively found to have been employed for many years, the arrears owing could be considerable.

If you need help with these or other staffing issues contact Edward Page

Permitted development boost

On 6 April 2018 updated permitted development rights came into effect offering a welcome boost for rural landowners. Perhaps most noteworthy are the increased thresholds for agricultural to residential conversions, with several options now available.

It is now possible to create up to three larger homes, with a maximum combined floorspace of 465 sq m; up to five smaller homes (each no more than 100 sq m floorspace); or a mix of both, provided that no more than five homes are created, of which up to three may be larger homes that exceed 100 sq m.

Elsewhere in the regulations, the size of new agricultural buildings that can be created through permitted development rights on larger farms has increased from 465 to 1,000 sq m. The government is also consulting on a revised National Planning Policy Framework (NPPF).

This document is currently only in draft form, however a final version is expected to be adopted by autumn 2018. Included within this is continued support for the rural economy and a new rural housing chapter that reinforces existing policy, while stating the need for authorities to identify opportunities for villages to grow and thrive. The new NPPF may also introduce a policy to help provide homes specifically for firsttime buyers in rural areas.

For help with all planning matters contact George Yates

Landlord Liabilities Part 1 -

Energy efficiency

Landlords letting out residential or commercial buildings must now meet new energy efficiency standards. From 1 April 2018 it became illegal to grant or renew a tenancy in England and Wales if the property’s Energy Performance Certificate rating was F or G. For existing tenancies the Minimum Energy Efficiency Standards (MEES) will apply to privately rented properties from 1 April 2020 and 1 April 2023 for non-domestic properties.

With an estimated third of UK properties scoring only F or G, the legislation is designed to encourage property owners to make their buildings more energy efficient. However, there has been a lot of discussion concerning listed properties and whether they are exempt.

The guidance is clear that listed properties are not automatically exempt and landlords will be required to meet the regulations or apply for an exemption.

We advise clients to seek advice from an independent building surveyor to establish what works can be done without unacceptably affecting the historical character of the property.

If improvement works are undertaken and no further improvements can be made, the listed property will be exempt for five years, after which time the landlord must reapply for exemption. Exemptions can not be transferred to a new owner or landlord on sale or transfer of the property and the new owner must apply for their own exemption.

For more information on building issues contact Caroline Ward

Landlord Liabilities Part 2 - Legionnaire's Disease

Legionnaires’ disease is a potentially fatal form of pneumonia caused by the inhalation of water droplets containing Legionella bacteria. It can be harboured in water systems, and it is a requirement that residential landlords undertake a periodical risk assessment.

The risk factors associated with Legionella are static areas of water and warm temperatures. Old systems are more at risk, particularly where appliances have been moved, leaving dead pipe ends, for example.

While landlords are not required to test water for the presence of the bacteria, they should assess the risk factors and redress any high risk areas. An assessor will check that cold water is below 20⁰C, hot water is above 60⁰C, and that the thermostat is accurate.

Landlords must inform tenants of any control measures put in place, with advice on how to manage the property themselves. Examples include descaling and cleaning shower heads regularly, and running taps for a while after the property has been vacant.

While landlords can carry out the risk assessment themselves, a professional assessment will cost around £100 for a three-bed cottage. Given the potential risk of a tenant contracting Legionnaires’ disease and suing for non-compliance alongside a Health & Safety Executive fine, it’s a small price to pay.

For more information please contact Benjamin Hamilton

Data Protection

The General Data Protection Regulation, which came into force on 25 May, definitely falls under the category of deeply dull, but vital not to overlook.

In a nutshell, any entity that holds the personal details, such as names and contact details, of individuals has to adhere to the regulation, which stipulates in some detail how that information can be held and used. A key requirement is that people must be given the opportunity to opt in to receiving any communications such as emails.

It’s not just big business that is affected, charities and community groups, such as an allotment association, also fall within the GDPR web, as will any diversified rural businesses such as farm shops that may hold customer mailing lists.

Although the regulation was born in Brussels, the UK government has said it will remain in place once we leave the EU. So it’s here to stay and can’t be ignored as the fines could be significant.

This article appears in 2018's The Rural Report - a unique guide to the issues that matter to landowners.

Download or read the Rural Report 2018