Monday, September 29th, 2008
The Government wants to expand Home Information Packs (HIPs) to provide potential buyers with more details about the property for sale.
In future they’re likely to include a Property Information Questionnaire (PIQ) covering things like building work carried out at the property, information on energy and utilities, details of parking arrangements and council tax banding. It’s intended that this will help reduce problems coming to light that delay or even prevent transactions from going ahead.
There are also plans to improve the information given about leasehold properties. This would include details about the cost and use of the leasehold property and a copy of the lease.
The Government is now in the middle of a consultation on the proposals which is due to end on 30th September. If the recommendations are accepted, the questionnaires could become part of HIPs from 1st January 2009.
HIPs were introduced just over a year ago and are now obligatory when selling homes of all sizes in England and Wales. They’re provided by the seller for the benefit of potential buyers and must include information such as evidence of title, terms of sale and the results of standard searches. There must also be an Energy Performance Certificate (EPC) rating the energy efficiency of the property.
Please contact us for more information about Home Information Packs or any aspect of buying or selling a property.
Thursday, September 25th, 2008
The credit crunch is not only creating turmoil in the housing market and the wider economy, it is also having an effect on the number of equity transfers taking place.
Equity transfer is where the owner or owners of a property decide to transfer all or a share of the equity to someone else, usually for a payment but sometimes as part of a larger financial arrangement.
The number of people wanting to transfer a share of their home has leapt dramatically this year. There are several reasons. It’s partly because the current financial downturn has put a strain on many people’s relationships causing them to separate. Another reason is that economic uncertainty concentrates people’s minds making them want to improve their financial arrangements.
Equity is basically the amount of value or money in a property once the outstanding mortgage has been paid or taken into account. For people who have lived in a house for several years and paid off a substantial part of their mortgage this can amount to tens and even hundreds of thousands of pounds. It’s therefore extremely important that any transfer of equity should be carried out properly by a qualified solicitor.
There are several reasons why equity transfers might be needed. The most common are marriage, separation, tax planning and changing the number of shares that each person may have in a property.
With marriage it is often the case that one partner already has a home and the couple want to transfer the property into joint names. The opposite applies, of course, when a couple separate or divorce. This usually involves one partner buying the other’s share in the home for an agreed price. This will often be part of the divorce settlement. It could be that the transfer is made effectively as a gift as part of an overall agreement in which one of the parties forfeits certain other benefits such as maintenance payments.
In such cases it is important that both parties seek advice separately from different solicitors to ensure that their interests are fully protected. If the couple cannot agree a price for the equity transfer then it may be necessary to sell the home so the proceeds can be divided between them.
It could be that people own a property jointly but want to change the number of shares each one has. For example, they may no longer want to own the property on a 50-50 basis but prefer a different ratio. In such cases a trust deed can be set up setting out the extent of each person’s share. The trust deed must then be registered with the Land Registry.
Some people, particularly widows and widowers, may want to transfer ownership of their homes to their children to reduce inheritance tax liability or to prevent the property being sold in future to pay for care home fees. Great care should be taken, however, to make sure you achieve the desired result.
Unfortunately, the credit crunch means banks and building societies are applying tougher sanctions for changing mortgage arrangements. In the past before the Northern Rock crisis, lenders would often transfer the mortgage from joint names to a single name or vice versa without any significant cost. Now many lenders want to start a completely new arrangement with all the accompanying costs.
They may insist on a redemption fee for the old mortgage before providing a new one, especially if the amount being borrowed is less than the original loan. This also catches couples wanting to downsize from a larger property to something smaller in order to reduce their mortgage payments.
Faced with such demands it is important to try to stand firm and negotiate as it is often possible to get a better deal than the one first offered.
Equity transfer always needs to be done carefully and the current credit crisis has added new pressures. Make sure you understand what you are signing and be prepared to stand firm and negotiate when necessary.
Contact us for expert advice on transfers of equity and all property matters.
Saturday, September 20th, 2008
The Government has decided that Britain should opt in to new EU regulations for dealing with cross border contract disputes.
Such disputes are currently governed by the 1980 Rome Convention on the Law Applicable to Contractual Obligations. The EU Council of Ministers has now agreed new rules known as the Rome I Regulation.
The existing Convention does not harmonise contract law across the EU but it allows courts to determine which country’s law should apply if the parties have not already reached an agreement in advance.
Rome I has several subtle differences. For example, courts would be able to apply the law of the country “with which the situation has its closest connection”. This could apply even where the parties involved had chosen the laws of a different country.
The UK Government had originally opted out of Rome I but now it says it plans to seek permission to opt in. The Ministry of Justice believes the “Rome I proposal will provide clarity over which law applies if a dispute arises over a contract made between people or businesses from different countries, allowing cross border trade to continue with confidence”.
The Government undertook a consultation on the issue and says the overwhelming response was that Britain should opt in.
Rome I comes into effect on 17th December next year. The Government will now seek consent from the European Commission to see if Britain can opt in at the same time.
Tuesday, September 16th, 2008
The value of the Private Rented Sector now exceeds that of all privately-owned commercial property, according to research carried out for the Association of Residential Letting Agents.
The researchers estimate that the sector is worth £500bn – that’s more than the combined total of all privately-owned commercial property including offices, shops, hotels, factories and leisure facilities.
Their report forecasts that rents will rise significantly in the short term and the sector will continue to outperform other kinds of investment property. The research was carried out on behalf of ARLA by Professor Michael Ball, Professor of Urban and Property Economics, at Reading University.
Prof Ball predicts that rents will rise by between 10 and 15% both this year and next. In spite of this, he says that “the modern Private Rented Sector is helping to stabilise housing because it accommodates those who, by this stage in the housing cycle, would be over-stretched borrowers with rising negative equity”.
It means that the problems of the 1990s, when negative equity prolonged the housing market recession, are less likely to occur in this current downswing.
The report, entitled The Modern UK Housing Market – Origins and Prospects, says: “House prices will almost certainly increase faster than commercial real estate over the longer term, as housing supply is less responsive to demand than commercial property but consumers demand more housing as living standards rise.”
“Affordability problems are likely to continue even if the housing supply increases. The current 56% of 30-34 year olds who are able to afford a purpose build flat will fall to 45% by 2016 and only 34% by 2026.
“A steady growth in the number of private tenancies of about 3% a year is expected. At this rate, renting will sustain its current overall share of housing provision.”
The report points out that residential property investment is driven by the prospect of capital gains. It says: “Capital appreciation has been good over the long term. Real house prices rose by 4.2% a year on average between 1981 and 2003, while capital values for commercial property fell by 1.2% by the same measure.”
Contact us now for proactive advice on commercial and buy-to-let properties.
Monday, September 15th, 2008
Pressurising or even encouraging staff to opt out of a workplace pension scheme is to be made unlawful under proposed changes to the Pensions Bill.
Employers will be prohibited from offering inducements such as higher salaries or one-off payments. The Department for Work and Pensions (DWP) plans to introduce the ban by making an amendment to the Pensions Bill during the Lords stages.
A DWP statement says: “The amendment will also cover circumstances where employers simply try to force their workers to opt out. This will leave individuals free to decide if they want to be a member of a workplace pension scheme. The ban would come into effect with the introduction of auto-enrolment from 2012.
“The Pensions Bill 2007 requires automatic enrolment into a qualifying workplace scheme, such as personal accounts, for all workers, between 22 and State Pension age, earning more than £5,035 a year (in 2006/07 earnings terms). Where workers remain in a money purchase scheme, employers would contribute a minimum of three per cent of qualifying earnings, with total contributions of eight per cent made up through member contributions including Government tax relief.
“The Pensions Regulator will be responsible for enforcement of the prohibition on inducements - as well as its new key role of ensuring that employers fulfil their duties under the Bill, including the requirements to automatically enroll staff into a good workplace pension scheme, and provide the employer minimum contribution of 3%.
“It is also proposed that there should be a time limit within which complaints have to be made or investigations launched by the Regulator. This will provide certainty for employers and workers and discourage the possibility of frivolous claims.
“There are differing views among stakeholders on how long that period of time should be. The DWP therefore wishes to consult before setting out the final time limits in regulations.
“Where employers flout the rules against inducements, the Pensions Regulator would have the power to require employers to put the worker back in the position they would have been in had they not been induced out of the scheme, by paying any arrears of contributions due, and could ultimately impose penalties where employers fail to comply.”
Contact us now for speclialist practical employment advice
Sunday, September 14th, 2008
An Appeal Court judge says there “too many calamitous neighbour disputes” in the courts and has urged people to consider using specialist mediators as a way of settling differences.
Lord Justice Mummery was commenting on the case of Bradford and James which involved a dispute between two neighbours over the ownership of a small cobbled area in front of a barn.
The barn had originally been part of farm. The farm and the barn were sold separately in the 1970s and the plans were not conclusive as to whether the cobbled area had been allocated to the owners of the barn or whether it remained as part of the farm.
Halifax County Court ruled in favour of the owners of the farm but that decision was then overturned by the Court of Appeal.
However, in giving his ruling Lord Justice Mummery questioned the value of pursuing court action in cases like these which could lead to great acrimony.
At the beginning of his ruling he said: “There are too many calamitous neighbour disputes in the courts. Greater use should be made of the services of local mediators, who have specialist legal and surveying skills and are experienced in alternative dispute resolution.
“An attempt at mediation should be made right at the beginning of the dispute and certainly well before things turn nasty and become expensive.
“Litigation hardens attitudes. Costs become an additional aggravating issue. Almost by its own momentum the case that cried out for compromise moves onwards and upwards to a conclusion that is disastrous for one of the parties, possibly for both.”
There are times, of course, when litigation is necessary but there are also occasions when mediation with the help of specialist lawyers can achieve a better result at lower cost and with far less stress.
Trained mediators can help bring both parties together to negotiate a settlement that is fair to both sides. This is not only true of neighbour disputes. Mediation, as long as it is conducted with the help of expert solicitors to protect your interests, can also help in other areas such as business disputes, workplace disagreements or divorce proceedings.
It is particularly helpful in situations where you are likely to have an ongoing relationship with the person with whom you are in dispute such as a neighbour or an employer. Divorcees too may need to retain a working relationship for the sake of their children. This is likely to work better if they have settled any differences amicably rather than through the courts.
Mediation may not always be possible but it is worth considering before embarking on court proceedings which could be costly and sour your relationship with someone you may have to deal with again in future.
Kevin Smyth is an expert CEDR accredited and Court of Appeal panel mediator. Contact Kevin Smyth now or visit our mediation website.
Wednesday, September 10th, 2008
The Department of Health (DoH) has begun a public consultation which could result in the alcohol industry’s current voluntary code being replaced by tougher, mandatory regulations.
The current voluntary code, the Social Responsibility Standards, was introduced in 2005 to coincide with the implementation of the Licensing Act. Its aim is to promote good practice and it has been signed by 16 trade associations.
An independent review of the effectiveness of the code was carried out for the Government by KPMG.
The review found that those within the industry felt too much blame was being placed upon them for the harm caused by alcohol. They felt it was a multi-faceted problem with an underlying cultural issue.
However, those outside the industry saw the code as having little impact because it is not enforceable. They felt it was not fit for purpose and was overridden by commercial considerations.
KPMG conducted observation studies over a five-day period of nearly 600 premises in eight different locations across England. The report says: “We have concluded that currently the Standards are not being consistently adopted and applied across the whole of the alcohol industry.
“In the current trading climate the commercial imperative generally overrides adherence. Inducements to people to drink more and faster, to allow under-age people entry to restricted premises, and blatantly serving intoxicated people are evidence of this conclusion.
“The Standards are currently having negligible impact in either reducing bad practice or promoting good practice on the ground. They lack focus, they are a confusing mix of regulatory and voluntary provisions, and they are not cross referenced to the Licensing Act.
“In driving responsible practice they are ineffective because of a lack of consistent monitoring and enforcement.
“We have concluded that the Standards should be strengthened and enforced more effectively by Government, industry and other agencies working more closely in partnership at a national and local level.”
The consultation proposals put forward by the DoH would oblige retailers to offer drinks in small as well as large measures, restrict happy hours and irresponsible promotions, and display alcohol in separate areas in off-licences – not by the checkout.
They would also need to give point of sale information on units and train staff to recognise and refuse alcohol to underage or drunk customers.
Health Minister Dawn Primarolo says the Government now wants the views of the public, the drinks industry and other interested parties. “There are significant choices to make, for example, on whether industry should do more, whether they have the right incentives, and what the Government can do to reduce alcohol-related harm.”
Contact Paul Slot, our licensing expert, for practical advice on all aspects of pubs, clubs and restaurants licensing or visit our special pubs and clubs licensing website.
Tuesday, September 9th, 2008
A man has been a granted parental responsibility for a six-year-old boy even though he is not the biological father and in spite of strong opposition from the mother.
The man, referred to in court as Mr A, began a relationship with the mother in 2002 and the boy was born later that year. He thought the child was his own and brought him up as such. The couple’s relationship broke down in 2004 and Mr A began proceedings for parental responsibility, residence and contact.
During the proceedings, DNA tests proved that Mr A was not the biological father. The biological father was a man referred to in court as Mr C, whose relationship with the mother was just ending when she began her relationship with Mr A. The court was told that Mr C did not want to play a significant role in the boy’s life.
Mr A still continued with his application which was contested by the mother and resulted in court proceedings lasting more than four years. The mother contended that that he was a dominating and controlling personality who was used to getting his own way. She felt overwhelmed by him. However, the Recorder who presided over the case found that she too could be determined and controlling in her desire to marginalise Mr A’s role in her son’s life.
In spite of their differences, it was never an issue between them that the boy loved both of them and was loved by both of them.
The Recorder acknowledged that Mr A was the only father figure the boy had ever known and that a continuing relationship between them was in the child’s interest. He ordered that there should be a joint residence order which effectively provided Mr A with the parental responsibility he wanted. However, the mother was to remain the primary carer with the boy spending most of his time with her.
That ruling has now been upheld by the Court of Appeal.
For caring and supportive advice on all family matters contact us now
Sunday, September 7th, 2008
Women who give birth on or after 5th October are to receive improved maternity entitlements.
At present a pregnant woman is allowed to take 52 weeks maternity leave regardless of her length of service with her employer.
The entitlement is made up of two sections. The first section is the 26 weeks of Ordinary Maternity Leave. At the end of this period the woman has the right to return to the same post and is entitled to the same terms and conditions that she enjoyed before her leave began.
The second section is the 26 weeks of Additional Maternity Leave. The woman then has the right to return to the same job, but if it is not reasonably practicable for the employer to hold the job open, she can be offered another position on similar terms and conditions which are no less favourable.
During Ordinary Maternity Leave the woman must continue to benefit from the same terms and conditions that would have applied had she still been at work, apart from the terms relating to salary. Until now, these benefits did not continue in full into the 26 weeks Additional Maternity Leave. However, they will do so now for women who give birth after 5th October.
For example, they will continue to qualify for contractual benefits such as participation in share schemes, reimbursement of professional subscriptions or gym membership. They will also be able to continue using company cars and mobile phones, unless they are provided for business use only.
A woman will retain her contractual rights to compensation and statutory redundancy pay if she is made redundant. If her employment is to be terminated then she will be entitled to her contractual notice period and she cannot be dismissed for reasons relating to her pregnancy or maternity leave.
The time on Additional Maternity Leave will count towards the woman’s period of continuous employment for the purposes of such entitlements as redundancy payments, assessing seniority and length of service payments.
Women will also continue to accrue annual leave while on Additional Maternity Leave unless they have agreed otherwise with their employer.
For help and guidance with all employment law issues contact Jonathan Friend now.
Monday, September 1st, 2008
Employers may have to re-assess their equal opportunities polices following a ruling by the European Court of Justice (ECJ) that ‘discrimination by association’ is unlawful.
The ruling provides greater protection to Britain’s six million carers and will make it easier for them to request favourable arrangements such as flexible working.
The case involved legal secretary Sharon Coleman and her son Oliver who was born with a rare condition affecting his breathing and hearing. Ms Coleman claimed she was forced to resign because she was harassed by her employers and denied the right to work flexible hours even though such arrangements were available to other employees.
She took the case to an Employment Tribunal which referred the matter to the ECJ for a ruling on whether “disability discrimination by association” in unlawful. The court ruled in her favour saying that the EU Directive banning discrimination in the workplace on the grounds of disability did not only protect the disabled themselves, it also extended to those who care for the disabled. Ms Coleman’s case will go back to the Employment Tribunal for a hearing in the light of the new ruling.
The facts of Ms Coleman’s case have yet to be determined by the Tribunal but the ruling ensures that the law now provides protection on the grounds of someone’s association with a disabled person. It will also offer protection to those caring for elderly relatives.
The ruling also reaffirms existing law that prohibits discrimination by association in the workplace on the grounds of religious belief, age or sexual orientation.
There is no doubt that this is a hugely significant ruling. Employers should ensure their equal opportunities policies are up to date so that they do not discriminate against staff who act as carers for the disabled or the elderly. For example, if they offer flexible working to the mothers of young children then they may have to offer the same rights to an employee caring for a disabled or elderly relative.
Please contact us if you would like more information about the rights of carers in the workplace or any aspect of employment law.
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