Construction and Planning Update – May 2026 – Top Five

Here are our top five for May 2026:

1. Leases and building defects

This case concerned commercial premises in Brighton, a purpose-built education facility (the Premises). The Premises comprised two separate buildings linked together, one used for teaching and the other as accommodation and welfare facilities for the students.

The Claimants were the freehold owners and landlords of the first Defendant (the Tenant). The Claimants claimed over £9m in rent arrears; the Tenant argued that the lease was frustrated due to building defects and that the building was unsafe and unoccupiable because of the defects. Under the agreement for lease the Tenant was liable for repairs.

The court held that the lease was not frustrated and granted summary judgment (interestingly “judgment” in the case of courts decisions is spelt without an “e”) in favour of the Claimant. It was held that that the agreement for lease: “excuses the landlord from further liability after the expiration of the defect period, which must be a reflection of an acceptance that there was a possibility of defects emerging”. The judge further referred to a repairing covenant which required the Tenant to rebuild reconstruct renew or replace the whole of the demised premises whenever necessary.

Comment: the case confirms that the doctrine of frustration applies to leases and underlines the need to consider defect provisions with great care. Tenants need to be very clear as to when their defects repair obligations commence and understand that after that point liability for defects may not be fault based. In each case, the wording of the lease will need to be analysed to decide what has been agreed on defects liability and risk allocation. We have not seen the Tenant’s insurance of course but can anticipate exclusions for defective works which may well have left the Tenant firmly between a rock and a hard place unless it had collateral warranties from those responsible for the presence of the defects. We note that the recent King’s Speech included a government commitment to “bring forward a Bill to speed up remediation for people living in homes with unsafe cladding [Remediation Bill]”. Had the premises in this case been residential, the outcome may have been very different.

Link: Into Nominee One Ltd & Anor v Study Group UK Ltd & Anor [2026] EWHC 1201 (TCC) (21 May 2026)

2. UK Net Zero Carbon Buildings Standard registrations now open

Net Zero Carbon Building Standard (NZCBS) has opened registrations to register a building, landlord space or a tenancy with NZCBS. This is the first step for a building to be verified to the UK Net Zero Carbon Buildings Standard. A building can be registered by an owner or leaseholder and/or individual or organisation, commissioning and funding the building, directly or indirectly. Registered buildings are shown on NZCBS website unless opted out.

For more information on how to register a building follow the link below.

Link: Verification | UK Net Zero Carbon Buildings Standard 

3. Another go at addressing late payments

The Commercial Payments Bill (the Bill) has reached the committee stage in House of Lords. The Bill proposes to restrict payment terms in commercial contracts and ban retention clauses in the construction sector. Seasoned readers will know there have been previous attempts to ban retentions.

If enacted, the Bill will introduce tough measures to protects business from late payments. It is claimed to be the toughest crackdown on late payments.

Comment: the industry knows who can be relied on to pay on time and who cannot and that historically commercial leverage trumps regulation. The Office for Small Business’ powers will include adjudication (this has to be requested by a payee), investigation, naming of late payers, requiring late payers to change practices and fining late payers. The Bill extends liability for offences to officers of the late payer. On retentions we are in two minds. Yes, it can be difficult for a Contractor to recover the retention, but a retention fund is very useful to an Employer where a Contractor cannot or will not address defects.

The Bill can be read in full here: https://bills.parliament.uk/publications/66378/documents/8272

Link: Largest crackdown on late payments in over 25 years as landmark Bill enters Parliament – GOV.UK 

4. Competence management

Competence is a key focus for building safety and the construction industry needs to be able to demonstrate how it checks and records competence. The Industry Competence Committee has published “Setting Expectations on Competence Management”. This sets out expectations for the management of competences for those who carry out any design, build or manage buildings, particularly high rise buildings. The document confirms that the organisations must ensure that the individuals under their control have the skills, knowledge, experience and behaviour necessary to fulfil their duties.

It also sets out principles for organisations to put policies and procedures in place to manage competencies within their business and supply chain.

Link (requires sign up to access the document): Setting Expectations on Competence Management – ICC Advice for Industry – Competence Resources – Built Environment Competence Hub 

5. Neighbourhood Guarantee

On 21 May 2026 the Ministry of Housing, Communities and Local Government published its plans to deliver change to local areas that residents can ‘see and feel’. New Community Power Pilots (CPP) will give councils, community groups and residents involved in the redesign of local services, ‘voice’ on a variety of matters from cleaner streets, filling in potholes and other vital public services communities rely on. CPPs will launch in up to 25 areas and all will be invited to design what services they want to see in their park or community hub based on the needs of their community.

At the same time the government will be taking action to restrict ‘profiteering’ by private companies exploiting public services. New powers will be introduced to do so, including to impose and enforce a ‘profit cap’ on those business. Additionally, Councils will have increased power to limit the number and type of businesses that operate in the high street, including to take over empty premises and make use of these for providing services, activities or businesses. The proliferation of vape shops may soon be ending.

Link: Neighbourhood Guarantee to improve villages, towns and cities – GOV.UK