The dangers of DIY leases

Gemma. March blog photo

The dangers of DIY leases

It may be tempting for both landlords and tenants of commercial properties to try and save money on legal costs by dealing with the matter between themselves. There are a number of downfalls that a landlord / tenant may fall foul of. Commercial property Solicitor, Gemma Eastham, looks at the pitfalls.

SDLT liability – tenants

Whether SDLT will be payable will generally by determined by whether a premium is being paid for the grant or assignment of the lease, the value of the annual rent per annum and the length of the lease.

Where no SDLT is payable, a tenant may still be required to notify HMRC (submit a return to HMRC).

Failure to submit a return and pay the duty (if any) within 14 days of the effective date of the transaction will lead to a fixed penalty of £100 and interest being charged on any SDLT and if the date of submission is more than 3 months after the filing date, the fixed penalty will increase to £200.

When do you need to register a lease at H.M Land Registry?

Leases granted for a period of more than seven years and certain other types of leases need to be registered at HM Land Registry.

It is worth pointing out that any easements contained in a lease, such as rights to access the demised premises through common areas or the use shared facilities, i.e car parks, will not take effect at law unless they are registered, even where the lease itself does not require registration.  For a tenant, it is therefore important to ensure that any registration requirements are adhered to.

Unwritten tenancies

Unwritten tenancies are dangerous for both parties to a commercial tenancy because there is no clear record of the terms that have been agreed.

A landlord, for example, will have no right to forfeit the tenancy in the event of a breach of the terms of the agreement because an express forfeiture clause is required for this.

With a business tenancy it is important to ascertain whether the agreement is within the security of tenure provisions contained in the Landlord and Tenant Act 1954 (the right for the tenant to renew the tenancy at the end of the term).  If there is no express clause excluding these provisions in the agreement and the Landlord and Tenant Act 1954 has not been ‘contracted out’, the tenancy will be deemed to be within the Act.

This means that the tenant will generally be entitled to request a new lease from the landlord at the end of the contractual term of the existing lease. The landlord would only be able to bring the tenancy to an end by serving notice on the tenant in the prescribed form, which requires the landlord to give the tenant not less than 6 months’ notice.

This may affect any provisions which have been agreed between the landlord and tenant.

For example, a landlord and tenant may have verbally agreed that either party can bring a lease to an end by giving one month’s notice to the other party. Legally, the landlord would not be able to rely on this provision and would need to follow the above statutory procedure (6 months’ notice).

The full extent of this topic could be covered in something far longer than a blog, but these are some key areas that both landlords and tenants should consider before proceeding. Seeking appropriate legal advice at the outset could potentially save a landlord and/or tenant money in the long run. Legal advice is always recommended.

For further information, please contact our Commercial team at MBH Solicitors:

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

 

 

Stuck In An Unhappy Marriage – Literally

It has been in the headlines recently regarding a couple who wished to Divorce but did not pass the test of unreasonable behaviour and as such the Courts refused to grant them a Decree of Divorce.

The Law

Under the current law in England and Wales, to obtain a Divorce you must prove your marriage has irretrievably broken down based upon one of five facts; adultery, unreasonable behaviour, desertion, two years’ separation with consent of your spouse or, lastly, the only other way to obtain a divorce without your spouse’s consent is to live apart for a period of five years.

Owens v Owens

In this case, Tini Owens, 68, has been denied a divorce from her husband, Hugh Owens. The Supreme Court ruled that a joyless marriage is not a sufficient reason without the consent of both parties.

It is not unusual to hear of couples separating because they’ve fallen out of love or simply don’t see eye to eye anymore. However, the law currently states that these reasons would not be sufficient grounds for a divorce. Mrs Owens petitioned the Court for a divorce in May 2015 based upon unreasonable behaviour claiming that her husband prioritised work over family life, no longer treated her with affection, and was often moody and argumentative. She was denied her divorce as it was said that she hadn’t provided evidence that her marriage had, in the legal sense, irretrievably broken down.

Mr Owens, 80, defended the divorce denying the unreasonable behaviour cited in the petition, and stating that if the marriage had in fact broken down, it was the fault of Mrs Owens, not him.

As Mr Owens would not provide his consent to petition based on 2 years’ separation and after exhausting all of her possible appeal routes, Mrs Owens now has no option but to remain in the marriage until at least the year 2020 when the couple will have been separated for 5 years and the consent of Mr Owens is no longer required for her to divorce him.

The Future

Family Lawyers in England and Wales have been eagerly awaiting the outcome of this case as they have campaigned for a change to the law to introduce a ‘no fault’ divorce so couples who have simply fallen out of love can proceed to issue divorce proceedings. It is hoped that this case will highlight how important a change in the law could be for couples going through divorce so that they can both move on with as little distress as possible.

Keep an eye on Resolutions website and Twitter feed for further updates regarding their campaign for no fault divorce.

Please do not hesitate to contact our family solicitors Gillian Lavelle or Kim Busby if you wish to discuss any of the above further. McCarthy Bennett Holland are able to offer a free 30 minute initial consultation and are more than happy to assist.

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

Can I change my child’s name?

I am often asked following the breakdown of a relationship whether it is possible to change a child’s name; perhaps the father has been absent for a long period of time or does not pay any maintenance or the mother remarries.

The consent of each person with Parental Responsibility is required in order to change a child’s name. In the event that each person consents, the process is relatively straight forward.

In the event that one person does not consent, the only other way to change a child’s name is to obtain an Order from the Court. However, it is only in very rare circumstances that a Court will order a change of name and the examples set out above are highly unlikely to be reasons to satisfy the Court that there should be a change.

There has been an example of such a very rare case in the news recently. The mother made an application to the Court for removal of her daughter’s middle name because of “its association with a notorious public figure.” The father argued against this on the basis that the name was not “offensive” and that he used both the child’s first and middle names. However, the Judge ruled that the association for the child was enough that the continued use of the name would “damage the child’s emotional welfare” and it was ordered that the middle name should be removed.

Please do not hesitate to contact our Kim Busby if you wish to discuss any of the above further. McCarthy Bennett Holland are able to offer a free 30 minute initial consultation and are more than happy to assist.

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

 

“Summer, summer, summertime, time to sit back and unwind” or maybe not?

The summer holidays are fast approaching and this is usually a time when families are packing their suitcases and heading to the airport to enjoy a much needed break in the sunshine.

However, when parents separate or divorce things can be extremely difficult. It is not necessarily a commonly known fact that should one parent wish to take the children abroad, that the written consent of the other parent is needed (unless one parent has an Order providing that the children live with one parent meaning that they can take them abroad for 28 days without the other parent’s consent. However, we would always encourage parents to speak to each other and plan ahead). Unfortunately, where there is animosity between the parents this can lead to difficulties meaning that the children are unable to travel.

At McCarthy Bennett Holland Solicitors we believe in providing practical advice to try to avoid such difficulties and to encourage the parents to continue to co-parent even when they are separated.

So what advice can we provide?

  1. Make plans in advance and speak to the other parent about your plans. Provide full details of flight times, accommodation and emergency contact details.
  2. Obtain the other parent’s consent before making any formal booking. Ensure this consent is in writing and put this with the children’s passports for safekeeping.
  3. Consider where you wish to travel to i.e. is this a safe destination? The other parent is more likely to be concerned about your holiday plans and be reluctant to provide consent if they are not in the best interests of the children.
  4. Be flexible in agreeing alternative arrangements for contact with the other parent if the holiday impacts upon their normal contact so that no one feels that they are missing out.
  5. Remember that the paramount consideration is the best interests of the children and therefore it is extremely important to put parental conflict to one side and let common sense prevail.

In the event that consent is unreasonably withheld by the other parent, it is possible to make an application to the Court but this will need to be made well in advance of the holiday and should always be a last resort.

Please do not hesitate to contact our Gillian Lavelle or Kim Busby if you wish to discuss any of the above further. McCarthy Bennett Holland are able to offer a free 30 minute initial consultation and are more than happy to assist.

www.wigansolicitors.com Tel: 01942 206060 Address: 26 Bridgeman Terrace, Wigan WN1 1TD Twitter: @MBHSolicitors Find Gillian on Facebook: “McCarthy Bennett Holland – family solicitor”

An Analysis of Personal Injury Awards in Ancillary Relief Proceedings

On divorce or separation, parties often issue financial proceedings to divide the matrimonial assets. This is a difficult process in itself but further complications can arise where one party to the proceedings has received a personal injury award post-separation. Undoubtedly, this gives rise to the question of whether or not said settlement will be considered by the Court in deciding on the fairest division of assets and on any lump sum to be awarded.

The starting point is usually s25 Matrimonial Causes Act 1973, which highlights the factors that the Court will consider, such as the income and earning capacity of either party as well as their respective needs, responsibilities, contributions to the relationship and their conduct. These factors will always be considered against the yardstick of equality,[1]so the starting point is generally an equal distribution of assets unless something causes the Court to distribute differently. In order to achieve this, it is important to establish whether or not any personal injury award forms part of the ‘matrimonial pot’ and therefore subject to distribution and/or a claim by the other party.

The case of Wagstaff is a good indicator of the Court’s treatment of personal injury awards.[2]In this case, the Husband suffered an accident in 1981, and the parties subsequently parted way in 1983. It wasn’t until 1988 that the Husband received an award for the personal injuries sustained, and that award was in the sum of £418,000 which enabled him to purchase his own property and to renovate it to accommodate his disabilities. There was an initial lump sum order made for £32,000 for the Wife, but this was overturned on appeal, given the Husband’s needs being of paramount importance and that the Wife had no immediate financial needs. On further appeal by the Wife, the Court held that an award for damages for personal injury was a financial asset to be consider pursuant to the s25 factors. The Court was of the opinion that the award left a clear disparity between the parties which needed to be redressed and in a bid to restore fairness, the Court re-imposed the lump sum order.

This case made substantive reference to the earlier decision in Daubney,[3]in which both parties had received personal injury awards following a car accident. However, the Husband invested his award in a business which later failed, whereas the Wife invested hers into the purchase of a flat (separate to the matrimonial home). The Husband applied for the matrimonial home to be transferred to him and the registrar allowed the transfer subject to the Wife’s beneficial interest of five-twelfths of the proceeds. On appeal, the Judge reduced her interest to 30% but did not take into account the flat that she had bought with her award. On appeal by the Husband and cross-appeal by the Wife, the Court again found that such awards needed to be taken into account when assessing the financial circumstances of each party and reduced her interest to 15% (factoring in her absolute interest in the flat).

However, whilst the above may lead the reader to believe that personal injury awards are very much within the confines of ‘matrimonial pot’, but regardless of that, the Court will also prioritise need over compensation/sharing. The ongoing medical position of the injury party will be of absolute prominence in any decision. Thus, if the entirety of that award is what is needed to meet the ongoing needs of that party, it may not be interfered with (regardless of whether or not it is deemed a matrimonial asset). As an example, the case of C v C,[4] the Husband was awarded damages in excess of £5million by way of structured lifetime payments and on application for provision by the Wife, the Court considered that given the Husband’s extreme needs, there was no capital that could be distributed to the Wife. It is the writers opinion that therefore the balance is not an easy one to strike, and whilst the Court will be prepared to consider such monies as matrimonial assets, there would likely need to be a surplus (once the needs of the injured party have been assessed) for any considerable distribution to take place.

The Powers of the Court to make such an Order are broad at the best of times, but any damages received by one party will be taken into consideration when assessing. Next, the ongoing needs of the parties (including any children) will be considered alongside where the award came from and what the purpose of that award was. As such, cases need to be considered on a fact-by-fact basis. Of course, the situation could have been avoided in its entirety if nuptial agreements were made in the first instance, but often this is not the case.

[1] Miller v Miller [2006] UKHL 24

[2] Wagstaff v Wagstaff [1992] 1 WLR 320

[3] Daubney v Daubney [1976] 2 WLR 959

[4] C v C [1995] 2 FLR 171

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 Find Gillian on Facebook: “McCarthy Bennett Holland – family solicitor”

Implications of the Pre-action Protocol Changes relating to Debt Claims

Currently, there is no specific Pre-action Protocol that needs to be followed in respect of debt claims, claimants must simply follow the general Practice Directions on Pre-Action Protocol under the Civil Procedure Rules. From 1st October 2017, claimants and their advisors will need to comply with the latest protocol which will now specifically apply to debt claims, where a business is claiming recovery of a debt from an individual. It will not apply to business-to-business debts, unless the business is a sole trader.

It is geared at increasing pre-action communication and negotiations between the parties, and will involve a two-step pre-action process which negates the unnecessary disclosure of further information to a debtor, often when the debtor is non-responsive to the creditor.

Letter of Claim

The first step is in issuing a letter of claim, which must contain:-

  1. Information regarding the debt and any interest accruing thereon;
  2. Details of the agreement under which it arises;
  3. Details of any assignment of the debt;
  4. Details of any instalments being offered/paid and why they are not acceptable;
  5. Details of how the debt is to be paid or how to discuss payment options;
  6. Address for return of the response form.

The letter must now also be accompanied by an information sheet, response form and financial statement form (all of which are contained in standard form in the annexes to the Protocol). Strict provisions on service apply. The debtor then has a period of 30 days in which to respond before proceedings are issued.

Response

During the 30 day period, the Creditor and Debtor are expected to liaise over the content of the response form and to discuss any documents required to understand the position of the other party. The creditor would then have 30 day period to provide any information requested or to explain why the information cannot be provided.

Alternative Dispute Resolution (ADR)

The parties are then expected to consider ADR to reach a settlement, and if agreement is reached, the creditor should not issue proceedings whilst the debtor complies with the agreement. If no such compliance takes place, a further letter of claim needs to be send before commencing proceedings, though disclosure need not be re-sent.

Taking Stock

The Protocol contains a ‘taking stock’ provision, requiring the parties to re-assess their positions following compliance with the Protocol’s. If agreement still cannot be reached, the creditor must give the debtor a 14 day warning that they are going to issue.

This new Protocol has clearly been developed following LJ Jackson’s 2010 report on Civil Litigation Costs and on the amount of Court time/costs that business debt actions take up. The Protocol seeks to serve the overriding objective and help facilitate an out-of-court resolution to debt issues. The procedure as whole appears to greatly benefit the debtor, and the main aim of the process is to enlighten the debtor by ensuring they have requisite information to understand their position and seek advice on their position.

If you are a business contemplating debt recovery action against an individual (including a sole trader) once this Protocol comes into place, then it is advisable that you seek professional advice to ensure compliance with the Protocol and therefore with the CPR. The Courts can be quick to penalise a claimant for non-compliance, and this can have a substantive impact on the prospects of success and on claims for costs.

The Litigation department at McCarthy Bennett Holland Solicitors has a wealth of experience in pre-action conduct and is readily available to advise on compliance with the CPR ahead of issuance of proceedings. If you do require assistance with this, or with the commencement of proceedings generally, please do not hesitate to contact us directly on 01942 206 060.

Contact Paul Aynsley, solicitor or James Ford, trainee solicitor at MBH Solicitors, to discuss your debt recovery / litigation disputes in confidence at:

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

Twitter: @MBHSolicitors