Landlords need to be aware – Plans to abolish Section 21 evictions

The government intend to abolish section 21 of the Housing Act 1988 (also known as ‘no fault’ repossessions).

What is a section 21 notice?

A section 21 notice allows a landlord to evict a tenant from the property without providing an explanation.

A tenant may not have caused the landlord any problems, however, a landlord can serve a section 21 notice on the tenant during a periodic tenancy (no fixed end-date) or at the end of a fixed term tenancy (a written agreement with a fixed end-date). A landlord must provide at least two months’ notice.

A landlord may want to remove a tenant from a property for many reasons, such as renovating the property, sale of the property or the landlord may wish to occupy the property.

The National Landlords Association (NLA) say that landlords should be able to use a Section 8 possession notice to evict a tenant who has broken the terms of their tenancy, for example by not paying rent or causing damage to the property.

This usually involves the landlord paying money to take the matter to court, if the tenant refuses to leave the property.

NLA say that landlords have been forced to use section 21 notices’ because they had ‘no confidence’ in courts to deal with a possession claim (breach of tenancy) quickly.

Will the proposed changes effect landlords?

If the changes are implemented, landlords will have to provide a concrete, evidenced-based reason already specified in law, in order to bring a tenancy to an end.

The government insist that landlords will be able to repossess their property for different reasons, specified in law, and in genuine cases, however the changes will protect responsible tenants from unfair evictions and unethical behaviour.

Shelter, a charity which helps people struggling with bad housing or homelessness, said the proposals would “transform lives”.

If you are a landlord and you would like to be notified if and when any of these changes come in to force, please do not hesitate to contact Gemma Eastham, Commercial Property Solicitor, at MBH Solicitors who will be pleased to assist:

www.wigansolicitors.com Tel: 01942 206060 Address: 26 Bridgeman Terrace, Wigan WN1 1TD.

LEASEHOLD AXED FOR ALL NEW HOUSES

The Government following a lengthy review have concluded that all new build houses will now be sold as Freehold to tackle the unfair leasehold practices that have been prevalent in the housing market within the last few years.

Ground rents on all new leases will be reduced to zero preventing Leaseholders being stuck with unfair rent reviews and will therefore prevent future home owners from being trapped with houses which cannot be sold as mortgage lenders will not accept the rent reviews or having to incur considerable expense to have the Lease changed.

All new houses will be sold on a Freehold basis unless there are exceptional circumstances and there will be immediate action to ban Help to Buys being used to support Leasehold houses.

The Government have also indicated that there will be a time limit of 15 working days and a maximum fee of £200.00 to obtain information from a Freeholder and/or Managing Agents in providing Leaseholders with information needed to sell their homes. This will hopefully speed up the selling/buying process on all leasehold property.

Buyers which have been incorrectly sold a Leasehold property will also be able to obtain their freehold outright at no extra cost. However, there has been no further guidelines in relation to how this will be.

Most older Leasehold properties are on a long lease, many being 999 year. However, newer properties can be on shorter leases of 250 or 99 years and have unfair rent reviews that can mean that the rent can be doubled every few years.  Hopefully the Government’s announcement will bring an end to this unfair practice.

If this has affected you, contact Sammy-Jo Woodward, solicitor or Caroline Rooks / John Petrie, Partners at MBH Solicitors, to discuss your conveyancing needs at:

www.wigansolicitors.com Tel: 01942 206060 Address: 26 Bridgeman Terrace, Wigan WN1 1TD

Twitter: @MBHSolicitors

HELP TO BUY ISA – TIME IS RUNNING OUT!

With effect from November 2019 you will not be able to open a Help to Buy ISA account.  However if you already have a Help to Buy ISA you will have until December 2030 to claim the bonus.

We find that some clients struggle with how the help to buy ISA’s work and we have therefore produced a guide as to the Help to Buy ISA below:

In order to claim the Help to Buy ISA bonus you must first qualify for it.   The following must be applicable:

  1. The property must be in the UK
  2. The purchase price must not be more than £250,000 ( or up to £450,000 in London )
  3. The property must be the only home you own
  4. The property must be your main residence.
  5. The property must be purchased with a mortgage

Once you have qualified for the bonus you can then continue to save and also continue to as well during the conveyancing (legal) process which you will begin once you have decided on a property to purchase.

Once the legal work has been carried out and you have signed your contract documentation we will then look to agree a completion date.  Before we are able to agree a completion date we must have received your closing statement which you will receive from your Bank once the account has been closed.    The Bank can take up to 10 working days to provide this to you and this can therefore delay completion.

Once you have provided us with the closing statement we will then be in a position to agree a completion date.  After the completion date has been agreed we will request your bonus from the Government. The 25% bonus will then be sent to us directly prior to completion.

After we have requested the bonus we will provide you with a completion statement which will show the full amount of the bonus that we are to receive prior to completion. You will then need to provide us with the balance of funds which will consist of the remaining deposit and fees.

The bonus must be used towards the purchase price of the property and we are therefore unable to provide this to you after completion. Therefore the bonus must be received prior to completion in order for this to be used.  Completion will then take place as any other transaction.

If you wish to discuss any element of a Help to Buy ISA please do not hesitate to give our offices a call and we will be happy to assist.

Contact Sammy-Jo Woodward, solicitor or Caroline Rooks / John Petrie, Partners at MBH Solicitors, to discuss your conveyancing needs at:

www.wigansolicitors.com Tel: 01942 206060 Address: 26 Bridgeman Terrace, Wigan WN1 1TD

Twitter: @MBHSolicitors

 

Sammy-Jo Woodward Qualifies as a Licensed Conveyancer

After completing my law degree and gaining experience here at McCarthy Bennet Holland, I completed the CLC’s course for Licensed Conveyancers. That means that, along with Caroline Rooks and John Petrie, I am now able to provide some of the most reliable and client-focused residential conveyancing in the North-West of England.

What is Conveyancing?

Conveyancing is an essential process whenever you are buying or selling land or property. Our team ensure that, during the transaction, their client is meeting all legal obligations. We can make fully certain that your legal rights are protected during the purchasing or selling of any property, whether it’s commercial or residential.

What Does A Conveyancer Do?

  • Reviewing the title – We review the title to the property you are purchasing to ensure that there are no defects in the title and to ensure you are fully informed about your future property.
  • Drawing up Documents Whether you are buying or selling a property a Conveyancers role will be to ensure that the correct documentation is in place. Our team ensures that you are protected throughout the transaction, we look after your best interests.
  • Legal Advice – Conveyancers will be able to offer practical advice to help you continue through the process as smoothly and simply as possible. Our team will undertake practically all the legal legwork to make sure that you have all the facts and can, therefore, make the right decisions.
  • Arranging completion

  • We can streamline the entire process and make sure your transaction goes through without any problems.

 

The CLC’s Licensed Conveyancing Course

As a Licensed Conveyancer, I am now able to deal with a range of different conveyancing transactions. This includes:

  • Sales,
  • Purchases,
  • Transfers,
  • Leases.

Thanks to my law degree, I could complete the Council for Licensed Conveyancer’s course in a year and half. There are two different aspects to the course, the academic and the practical sides, which I needed to prove I could handle legally, ethically and safely before graduation. I completed the academic side, including both coursework and exams, before finishing off the practical side. The practical half of the course included work experience, which included at least 1,200 chargeable hours of practical training.

After applying for, and receiving, my license in October, 2016, I need to prove to the CLC that I have continued to grow and develop as a conveyancer. I do this by completing webinars, courses and taking part in seminars to obtain Continuing Professional Development points. This makes sure that all conveyancers are kept up to date with latest legal practices and laws.

Contact McCarthy Bennet Holland’s Conveyancing Team Today

Whether you’re looking to buy or sell a property, our team will be able to make the whole process go much smoother for you and make sure that you remain on the right side of the law. Our professional team have many years’ experience in helping clients from all walks of life in there residential transactions.

Contact Caroline Rooks, John Petrie or Sammy-Jo Woodward today for up-to-date conveyancing advice and practical help. Call our team directly on 01942 206060 or email us at mbh@wigansolicitors.com and we’ll get back to you as soon as we can. Alternatively, you can follow us on Twitter, Facebook or LinkedIn for the latest advice!

STAMP DUTY & ADDITIONAL HOMES

For those of you buying a 2nd, 3rd or even 14th home you will probably know about the changes to the law that come into effect on Friday 1st April 2016.

From Friday, anyone buying an additional home for any purpose will pay more stamp duty land tax. It is understood that the higher rates will only apply to additional residential properties purchased in England, Wales and Northern Ireland on or after 1 April 2016. The higher rates will be 3 percentage points above the current SDLT residential rates and they will be charged on the portion of the value of the property that falls into each band. See the table below:

Band     Existing residential SDLT rates New additional property SDLT rates
£0* – £125k     0% 3%
£125k – £250k     2% 5%
£250k – £925k     5% 8%
£925k – £1.5m     10% 13%
£1.5m +     12% 15%

This has led to our conveyancing department having an unprecedented amount of purchases due to complete before Friday’s deadline.

Our conveyancing partner, Caroline urges those people who are looking at buying a further home to carefully assess whether they can afford not only to buy it but whether they can afford the new stamp duty rates. Also, if you are in the process of buying a further home check with your solicitors whether completion will take place before Friday.

Unfortunately, the changes also affect jointly owned property and this also affects those people looking to buy another home with their partner even if one of them doesn’t own a property. It may also affect any divorce settlements.  Our family solicitor, Gillian would strongly advise those who have agreed or are thinking of agreeing to keep their name on a property following separation to assess whether these new changes will cause them any issues in the long term.

Contact Caroline Rooks to discuss your property or other legal requirements in confidence at:

Contact Gillian Lavelle, solicitor at MBH Solicitors, to discuss your family & matrimonial requirements in confidence at:

www.wigansolicitors.com
Tel: 01942 206060
Address: 26 Bridgeman Terrace, Wigan WN1 1TD
Twitter: @MBHSolicitors

Enfranchisement – how it works & what’s involved

Q: Another tenant in my apartment block has suggested that we seek to buy the freehold of our property. Is it possible to do so and what is involved in the process?

Since the mid-1990s, tenants have had the ability to purchase the freehold of a building within which they have a lease over a property. The process is called ‘enfranchisement’; tenants either elect a nominated person or persons, or establish a limited company within which each takes a share, and the tenants or company, funded by the shareholding tenants, buys the freehold from the landlord on behalf of all of the participating tenants.

Getting started

Enfranchisement is governed by a set procedure. Before starting out on the process, tenants are well advised to fully-research and cost out the purchase, as well as to take good legal advice as to how the acquisition will affect them.

Tenants will need to ensure that both they and their building qualify and are eligible to exercise enfranchisement. There should be at least two flats in the building and leases of at least two-thirds of the flats’ leases must have been granted for over 21 years. Alternatively, shorter leases must be capable of ongoing renewal or, in the case of shared ownership leases, the tenant’s share must be 100%. Right-to-buy leases also qualify. There are a number of exclusions; charitable housing leaseholders and business and commercial tenants can’t exercise enfranchisement and tenants who own more than two flats in a building are also excluded.

At least half of the qualifying tenants in a building must be willing to proceed; so for example, if your building contains 12 flats, at least 6 tenants must qualify and participate. If there are only two flats, both tenants must participate.

A legal adviser will be able to assess fully whether you qualify.

It’s worth getting together with your fellow tenants at this stage and gathering support from those who wish to join in with the purchase. You may want to enter into an agreement together, formally setting out terms such as how you will vote, who is responsible for negotiation and what each tenant’s financial contribution will be. You should also consider how other aspects to the purchase will be funded, including professional fees and valuation costs.

Serving the Initial Notice

Tenants (under the name of their limited company) will need to serve an Initial Notice on the Landlord, notifying it of their intention to exercise their right to purchase the freehold. If tenants are setting up a limited company, this will need to have been done beforehand; again, a solicitor or accountant will be able to advise and manage this for you.

Tenants will need a valuation, advising of the amount they should offer in their Initial Notice (this is likely to be advice as to the ‘best’ and ‘worst case’ scenarios). The valuer should continue to have input on receipt of the Landlord’s Counter-Notice and deal with negotiation and agreement on the purchase price. Valuers may also be able to advise as to the ongoing management of the building following completion of the purchase.

The Landlord’s response

Once the Landlord has received the Initial Notice, tenants can expect requests for information, including evidence of their leasehold interests. This information must be supplied within 21 days so tenants must ensure that, before starting the enfranchisement procedure, they are fully prepared with all documentation to hand. If information that is requested is not provided, tenants are unable to apply again for another 12 months.

The Landlord will then serve a Counter-Notice, acknowledging the tenants’ right to purchase and either agreeing terms or proposing alternatives. Landlords who do not agree to enfranchisement generally apply to Court for an Order to state why the right cannot be granted or to have its reasons verified. Parties may also apply to Court if the purchase price cannot be agreed.

If a Landlord intends to demolish and/or redevelop a building, or a substantial part of it, the Landlord is not obliged to sell the freehold to the tenants. However, this can only apply if at least two-thirds of the leases in the building will end within 5 years of the date of the Initial Notice.

Progressing the purchase

Once a price is agreed, the parties can proceed to an exchange of contracts. If the case has gone to Court, a Landlord must send to the tenants a draft contract within 21 days of the date of judgment. Both parties should exchange contracts within two months of the judgment, agreeing a date for completion; if they fail to achieve this deadline, tenants should make a further application to Court for an Order stating that the property is transferred to them.

Enfranchisement is a complex process and is governed by strict time limits. It is important to obtain good legal advice from an early stage. MBH’s Mark Boon and Caroline Rooks are experts in Landlord and Tenant and Commercial Property; call 01942 206060 to make an appointment.

About MBH

McCarthy Bennett Holland, established in Wigan since 1971, offers a personal service across a wide range of legal practice areas, including residential and commercial property, family and matrimonial, wills and probate, employment, personal injury and company commercial.

Contact Caroline Rooks to discuss your property or other legal requirements in confidence at:

www.wigansolicitors.com
Tel: 01942 206060
Address: 26 Bridgeman Terrace, Wigan WN1 1TD
Twitter: @MBHSolicitors

Leaseholder consents: understanding your lease terms

When completing the purchase of your new home, particularly where a property is held on a long lease instead of freehold, it is often easy to let the finer details pass by unnoticed as you focus your attentions on getting the keys and moving in. However, before you even exchange contracts it is important to read carefully through the lease and, if possible, meet with your solicitor to discuss the aspects which may impact on how you deal with the property.

Points you should look out for include:

  • Who is your landlord and is a management company party to the lease as well?

You need to check to whom you are liable to pay rent and who you will be dealing with. If there is a management company made up of other tenants of the development, as a new tenant you may also take a share of the company with your purchase. Make sure you know who is responsible for looking after public parts of the building or development, including estate roads, car parks and lifts (if relevant).

  • What rights does the property have the benefit of?

These may include rights of access and rights of way over common areas such as driveways, paths, stairways and lifts. You may also be grated parking rights in a designated area. Whilst you won’t own these areas, you will be able to cross and use them in order to access your own property. Rights may be restricted; for example, you may only be able to use a parking space to park a private car so this cannot be used for commercial vehicles or caravans.

  • What are your lease obligations?

You will undoubtedly need to agree to pay your rent on the days it falls due. ‘Ground’ rent is a nominal sum payable each year to a landlord under a long lease (typically, a ‘long’ lease could be for any period from 99 – 999 years). Ground rent sums may increase every so often; your solicitor should advise you as to what you are required to pay and when.

Most leases of flats and apartments contain service charge provisions; some leases of houses will also where a management company has been set up to deal with maintenance of public open spaces, adopted roads and other common areas of an estate. Tenants are required to pay the sums demanded and, in return, the landlord is obliged to provide the services as set out in the lease. Your seller or the developer should advise you from the outset as to what you can expect to pay in service charge.

Landlords and management companies also often reserve a right to require payments to be made towards their administration charges and expenses.

  • What alterations are you permitted to carry out and are any consents are required?

If you have a lease of a flat, you should expect an obligation not to carry out any structural alterations to the property as these may affect the structural integrity of the building as a whole.

Alterations clauses should be more flexible in leases of detached properties but it is common for long leases to require the tenant to obtain the consent of the landlord to any alterations they wish to carry out which extend the property in some way. You will also need management company consent if one is party to the lease.

Alterations may include extensions, the addition of conservatories or any other building works which increase the footprint. Depending on the lease, alterations such as loft conversions may also require consent. Your solicitor should talk you through what works you are able to do but make sure that you go back to check your lease at a later date before you start any works if you’re not sure.

Under the lease, you will likely also need to ensure that all the appropriate planning permissions and building regulations consents are obtained to the works you are carrying out. Make sure that you keep hold of all relevant documentation as you will need it when you come to sell.

If consents to works, or planning permissions and building regulations consents, are not obtained, this can lead to problems later. Indemnity insurance policies may need to be purchased to cover any risk arising as a result of missing documentation and this can not only cause a delay on a sale but may put off potential buyers or lenders.

  • Are you able to sell the lease and, if so, is consent required?

It should be expected that any long lease will contain the ability for a tenant to sell it. However, again it is likely that the consent of the landlord and, if relevant, the management company will be required. They may reserve the right to refuse consent if any rents or service charges are unpaid; in this instance, expect settlement of any arrears to be a condition of consent being granted on the date of completion.

McCarthy Bennett Holland has an experienced residential conveyancing team which can advise on lease terms and will manage your sale or purchase efficiently. For more information, call Caroline Rooks or John Petrie on 01942 206060.

About MBH

McCarthy Bennett Holland, established in Wigan since 1971, offers a personal service across a wide range of legal practice areas, including residential and commercial property, family and matrimonial, wills and probate, employment, personal injury and company commercial.

Contact Caroline Rooks, partner at MBH Solicitors, to discuss your conveyancing or other legal requirements in confidence at:

www.wigansolicitors.com
Tel: 01942 206060
Address: 26 Bridgeman Terrace, Wigan WN1 1TD
Twitter: @MBHSolicitors