Delay on the ‘No Fault Divorce’

The long awaited No Fault Divorce has been delayed even further, following ministers announcing that the Government will now be working on a commencement date of 06 April 2022. This announcement came by way of a response to a Parliamentary question.

In a written response to the question, Courts minister Chris Philip MP stated the “deadline for implementing the provisions of the Divorce, Dissolution and Separation Act 2020 must be put back”. It was stated by Philip that this year’s target was ambitious and relays the fact that such amendments are the biggest reform of divorce law in 50 years.

At least 6 months later than originally indicated, it is understood that by Resolution that this delay may allow the online GOV.UK divorce application to be updated. Despite being informed that the legislation would come into force in Autumn 2021, it carried a lot of uncertainty in terms of specific dates. The new date given by Parliament however is now fixed as a matter of Parliamentary record.

It is understood that work is underway to identify and create the necessary amendments to the Court rules as well as the online service. Philip went on to say:

 “The Ministry of Justice is committed to ensuring that the amended digital service allows for a smooth transition from the existing service which has reformed the way divorce is administered in the Courts and improved the service received by divorcing couples at a traumatic point in their lives. Following detailed design work, it is not clear that these amendments, along with the full and rigorous testing of the new system ahead of the implementation, will not conclude before the end of the year”.

Whilst it is unfortunate for those couples who are awaiting the implementation of such legislation, rather than relying on the current facts of Divorce, ensuring the procedural rules are correct is extremely important. If the rules aren’t fully workable, it would likely cause even further delay to an already lengthy process. As Law Society President Stephanie Boyce said “we welcome the continued commitment to ensuring the reforms are fit for purpose.”

Like to know more about the no fault divorce and what this entails? Contact Gillian Lavelle or Megan Brookfield at 01942 206060.

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

The importance of Shareholders’ Agreements

Q: I would like a colleague to come on board as a director and shareholder in our business but I have invested more time and money in it to date. How can we reflect fairly our respective inputs?

Setting up a company with a friend, or having another party join you as a director, is an exciting time for a business. Sharing the workload and ideas can help to propel you forwards much more quickly than through the work of just one director. However, it’s important to protect both parties’ position to ensure that the partnership and the company can develop smoothly.

Shareholders’ Agreements

Trust in any working relationship is key but you should always ensure that, in case anything does go wrong, you both have clearly defined rights. A shareholders’ agreement is a vital document in many organisations; it can be made between any or all shareholders of a business and will protect investment, set out how the company is to run and ensure fair treatment of all investors and stakeholders.

What can it contain?

The agreement may include provisions such as:

  • shareholders’ rights;
  • the obligations of each shareholder and their specific roles;
  • how shares are to be bought and sold;
  • how dividends are to be calculated and paid;
  • the voting rights of each shareholder;
  • how decisions are to be made;
  • how the company will be run, including appointing or removing directors, making financial decisions and making decisions as to the trade and nature of the business; and
  • how disputes are to be resolved.

Agreements should cover minority shareholders (those who own less than 50%) and protect their interests insofar as is possible. This may include allowing for some voting rights for important decisions so that minority shareholders still have a say in, for example, how the business is to be run, whether new shares should be issued or whether new directors should be appointed.

As a majority shareholder, you may want to include provisions that allow you to require a minority shareholder to sell their shares. This will prevent you from being held back when making a business-critical decision at a time of your choosing.

Shareholders, especially those with a minority shareholding, should be prevented from disclosing confidential information or working with a competitor and an agreement should set out when, how and, most importantly, to whom, shares can be sold. You will likely wish to prevent shares being sold by another shareholder to a competitor and this can be incorporated within the agreement, as well as setting out how share values are to be calculated.

The company already has Articles of Association. Why do we need this as well? 

A shareholders’ agreement and the company’s Articles should reflect and be consistent with each other. The primary difference between the two is confidentiality; a shareholders’ agreement is a private contract between shareholders and only those party to it need to know the information it contains. Articles of Association are filed at Companies House and are publically available; therefore anyone can find out what is in that document. Further, Articles of Association are often drawn up using a template document which doesn’t consider closely the needs of your specific business. A shareholders’ agreement is far more tailored to suit your situation. 

Do we need to put the agreement in place now? 

You are well advised to put the agreement in place as early as you can in your working relationship. As with any legal document, if it’s put off and delayed, you may find that you need it before you have any firm terms in place. Make your shareholders’ agreement a priority so you know you’ll be protected right from the outset.

Is a shareholders’ agreement legally binding?

The agreement will form a contract between shareholders which can be relied upon and considered by a court; it’s therefore important to ensure that it is properly drafted, signed and dated to create a binding document that accurately reflects all parties’ interests.

 

Mark Boon, partner at MBH, deals with company commercial matters and will be happy to discuss any issues affecting your business, partnership or limited company. Contact Mark to make an appointment 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 Mark Boon to discuss your commercial or other legal requirements in confidence at:

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

What is a ‘Lasting Power of Attorney’?

Q: I have been advised to sign a ‘Lasting Power of Attorney’ but I don’t know whether I need to. What is the document and how does it work?

Lasting Powers of Attorney (“LPAs”) are often completed and signed at the same time as your Will is drafted or updated.

LPAs are legal documents which allow you to appoint nominated people to act on your behalf, making decisions or dealing with your affairs, in the event that you are unable to do so yourself without assistance. You are known as the ‘donor’ in the document, and your nominated persons are ‘attorneys’. Many people choose to appoint friend or family members (often adult children), or occasionally a trusted professional such as a solicitor.

The LPA will be used in the event that you are unable to deal with affairs and make decisions yourself; for example, you may have an illness or accident. At this point, you are referred to as ‘lacking mental capacity’.

There are two types of LPA, and you may choose to complete either or both of these:

  • Health and Welfare

This LPA allows your nominated attorneys to make decisions about matters such as your daily routine (including washing, dressing and eating), your medical care, life-sustaining treatment and the process of moving into a care home. The Health & Welfare LPA can only be used when you are unable to make your own decisions.

  • Property and Financial Affairs

Dealing with money and property issues, under this LPA you appoint your attorney to manage a bank or building society account, pay bills, collect benefits or pension or deal with the sale of your home. The Property & Financial Affairs LPA can be used by your nominated attorneys as soon as it is registered, provided that you give your permission.

When should I make a Lasting Power of Attorney?

You must be over 18 and have full mental capacity at the time of signing your Lasting Power of Attorney. You should be able to make your own decisions, to be aware of the document’s effect and to sign it at the time you complete the document.

Who should my attorneys be?

You may choose one or more attorneys. If you choose to appoint more than one, you will need to decide whether they must make decisions jointly (so all decisions must be agreed by all attorneys) or whether they can act separately (attorneys can act together or on their own).

Attorneys must be over 18 and they must be able to make their own decisions (having ‘full mental capacity’). You should consider how well your attorneys look after their own affairs, how well you know them and whether you trust them to make decisions in your best interests. Attorneys must be willing to act on your behalf

How do I make sure that the Lasting Power of Attorney is properly completed?

We always recommend that you use a local solicitor to prepare both your Will and your LPA. They can advise as to the contents of each and ensure that they are satisfactorily signed, dated and safely stored.

LPAs need to be registered with the Office of the Public Guardian after they have been completed. The process takes around 8-10 weeks and the registration fee is £110 per LPA (there are some exemptions and reductions available if you are on a low income), with legal fees charged in addition to this; you can choose to notify people that you have put an LPA into place, and notifications will be distributed after you have applied for registration.

Can I change my LPA once it’s been registered?

Yes, provided that you still have full mental capacity to make your own decisions. You are able to make changes to your LPA by using a ‘Partial Deed of Revocation’, or to withdraw it completely by way of a ‘Deed of Revocation’.

Your LPA will come to an end automatically if your nominated attorney dies, loses their own mental capacity, divorces from you (if you have nominated your husband or wife) or if your attorney is removed by the Court of Protection. Bankrupt persons or those subject to a ‘Debt Relief Order’ cannot act as attorneys under a Property and Financial Affairs LPA.

 

McCarthy Bennett Holland’s Paul Aynsley can advise on your Will and Lasting Power of Attorney, ensuring that both are up-to-date and meet the needs of you and your family.

If you would like to discuss your future planning, contact McCarthy Bennett Holland to make an appointment with Paul 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 Paul Aynsley, partner at MBH Solicitors, to discuss your Wills, Trusts, Probate or other legal requirements in confidence at:

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

 

Dealing with directors’ disputes

It’s a fact of life that directors and shareholders of businesses won’t always get on; the close working partnerships that these roles require can put a great deal of strain on a relationship, particularly where livelihoods and income are concerned. But what are the most common causes of dispute and how can they be managed?

Grounds for disagreement

There are countless reasons why directors and shareholders may disagree, such as:

  • Financial reward; is one director receiving a greater share? If so, is that share justified or is it unfair?
  • Business strategy; is the direction the business is taking agreed by all parties or do some feel that change is necessary (or to be avoided)?
  • Behaviour of one party; for example, is one director not acting within the best interests of the company? Do they have sideline interests or investments which conflict with their role?
  • Unequal contributions; this may be financial or in terms of time spent working in the business, but if one or more parties feel that another is not pulling its weight in contribution, this can lead to discontent.
  • Share pricing; if and when shares are bought or sold, some directors and/or shareholders may feel that the pricing is incorrectly calculated.

Avoiding disputes

Key to any successful relationship is good communication. Directors should prepare themselves properly prior to board meetings and perhaps even discuss some trickier points beforehand to enable the meetings to be as productive as possible. During board meetings, ensure that proceedings run smoothly with time controlled and the agenda observed. Voting should be efficient and conducted at the right time once an issue has been discussed appropriately.

Non-executive directors can add a different dimension to a board; they may have particular business expertise which can assist in decision-making and, as they do not have a personal stake in the company, can offer advice which is unbiased and more practically-led.

Managing a disagreement

The first port of call for guidance should be the company’s own Articles of Association and/or any shareholders’ agreement which may have been prepared. Both documents should contain a procedure for managing conflict between directors and may allow, for example, for decisions to be passed by a majority.

In the absence of any other procedure, and in the interests of equality, directors generally have one vote each during a meeting. If there is an even split, the chair may be given the casting vote. There are some company decisions which also require the approval of shareholders, such as:

  • the appointment or removal of directors;
  • declaration of dividends;
  • proposed changes to Articles of Association or the company’s trading model;
  • any proposal to wind up the company; and
  • proposed property transactions

Termination

If, as a shareholder or director, you feel you want to terminate the relationship, there are a number of ways to deal with this depending on your role; you may be a director, employee or shareholder and you will need to ascertain this. Resignation can, and likely will, impact on your employment rights and you may also be required to sell your shares on departure.

If you are a shareholder, the clearest way to exit will be to sell your shares; the Articles and any shareholders’ agreement will deal with the process for this, including anyone who is to be offered the shares in preference to others. Directors are able to resign and the process is straightforward for this, although you are recommended to seek legal advice to ensure that you are excluded from any future liability in respect of decisions made during your directorship.

 

Mark Boon, partner at MBH, deals with company commercial matters and will be happy to discuss any issues affecting your business, partnership or limited company. Contact Mark to make an appointment 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 Mark Boon to discuss your commercial or other legal requirements in confidence at:

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

A hard lesson in honesty in family legal cases

It’s always important to be honest and disclose all relevant information and facts in any legal case. A recent decision in the Supreme Court demonstrates why, and how you can be seriously disadvantaged if you’re economical with the truth.

About the case

A couple, the Sharlands, married in 1993 and separated in 2010; they had three children together. The husband’s shareholding in his company was valued by experts, one acting for the wife and one for husband. Neither expert could agree on the value of the shares but the case proceeded on the basis that the company was not to be listed on the stock market.

The situation was different, however, and yet the husband allowed the case to proceed despite knowing that shares were to be offered to the public; he even gave evidence that this was the case.

The wife’s case relied on the husband’s false statements and the parties reached an agreement in respect of their financial matters. Just before the Court granted an Order to reflect the parties’ agreement, it became public knowledge that the husband had lied and that the company was in fact putting into place a public shares listing. The wife therefore asked the Court for a final hearing.

The Court’s decision

The Supreme Court found that the husband had been deliberately dishonest about the public share listing. They agreed to dismiss the parties’ agreement and the Court was to direct the former couple as to how to proceed.

Where financial matters between a couple going through a separation or divorce reach Court, both parties have a duty to disclose fully all relevant information. This duty is ongoing, which means that if a situation changes whilst the case is in progress, the parties must declare as such. If either party misleads the Court, this is dishonest and fraudulent.

The Court won’t dismiss an agreement like this routinely though. The Supreme Court in this case stated that:

“We will only [dismiss the agreement] where the absence of full and frank disclosure has led to the Court making an order substantially different from [that] which it would have made if [full] disclosure had taken place.’’

If the husband’s dishonesty had been trivial and would not have substantially altered the agreement reached, it is doubtful that the Court would have dismissed in the way it did.

An additional decision

Alongside the ‘Sharland’ case, the Court also heard the case of Mr & Mrs Gohil, a couple which had also separated. The ‘Gohil’ case decided that the Court could still make decisions in respect of a marriage, even after that marriage had dissolved. Couples are able to apply to Court to request that Orders are dismissed or to appeal against Orders which may have already been made.

How can the Court deal with dishonesty?

If a party in a Court case deliberately sets out to mislead the Court, this can be incredibly serious. It is a criminal offence, and the person may be imprisoned; for example, Jeffrey Archer and Jonathan Aitken have both been jailed for perjury.

Where it becomes apparent that a party has attempted to mislead the Court through, for example, forged documents, the Court will decide whether to continue or to dismiss the case in its entirety. However the Court behaves, it’s certainly not worth concealing vital information.

Our family and matrimonial specialist Gillian Lavelle is pleased to offer a free initial 30-minute appointment for all new cases.

To arrange your meeting, call 01942 206060 today.

 

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 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”

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

Sharing the care of children – a study of child care cases in the Courts

A recent study, supported by The Nuffield Foundation and carried out by experts from the Universities of Reading and Warwick, looked at decisions reached by the County Courts in England and Wales in child care cases. The purpose of the project was to analyse applications, to look at how the Courts reached their decisions and to identify the different types of arrangements agreed by parents following a separation. In this week’s column, we look at the issues raised and discussed by the study.

  • Do the Courts favour mothers or fathers?

Central to the project was to look at whether any gender bias was shown towards either parent in a child care case. Interestingly, and perhaps contrary to public opinion, the study found that no bias was shown in deciding where a child should live.

When making applications to Court for contact, mothers are often the primary care giver. However, the study found that the success rate for mother and father applicants is broadly the same so fathers should not be deterred from making an application on the assumption that they won’t be successful.

The Courts do not tend to transfer children from one main residence to another; their primary role is to protect and retain consistency for children. A Court will generally only transfer a child’s main residence to that of the other parent if there is a serious concern for the child’s welfare or where children’s services are involved.

  • Do we have to go to Court for a decision on child care?

The study found that the majority of cases which proceeded to Court were those where private negotiations between parents had broken down.

Cases will only go to Court if they cannot be settled through agreement between themselves, solicitors or mediation. Mediation is a more informal process which allows parents to talk, either face-to-face or through a trained mediator, and come to agreement about their children and other matters affecting their separation. Mediation is much cheaper and less stressful than going to Court and it is now compulsory to participate in mediation as part of any child and financial-related process. Court should always be only a last resort.

Going to Court doesn’t need to increase tensions between parents; generally, cases assessed as part of the Nuffield Foundation study were settled by consent and the Courts can help to resolve disputes sympathetically by introducing a gradual series of hearings to increase conversation and aid agreement.

  • Do the Courts encourage contact in domestic violence cases?

Where there is evidence of domestic violence in a relationship, the project found that the Courts still encouraged as much contact with both parents as possible. Contact with the non-resident parent could be gradually increased over time to allow both parties to build trust, eventually allowing the child to stay with the non-resident parent overnight.

Only in cases where there is a very real and serious risk to a child’s safety will a Court make a ‘no contact’ order. Logistics and practical concerns meant that, in the most part, equally-shared care tended not to be ordered. It is thought to be more stabilising and simpler for both parents and children to have a main residence and a non-resident parent with contact.

  • What about grandparents who want to care for their grandchildren?

In some cases, grandparents (or other carers) may wish to apply to Court for a child care order concerning their grandchildren. The Nuffield study report states that, ‘These types of cases have been overlooked in the Family Justice Review and recent legal reforms.’ Rather than being dealt with as a typical family law dispute case, these cases tend to be administered differently.

  • Is Legal Aid available?

Unfortunately, Legal Aid is only available now in a minority of cases and normally to protect vulnerable parties where there has been domestic abuse.

It is felt that there may be a risk to children where parents or other applicants are unable to benefit from Legal Aid, as parents or carers who cannot access the Court system may agree to arrangements which are not safe for the children or may not be able to reach any agreement at all, meaning that some parties could lose contact with children altogether. The report raises the concern that those who are particularly vulnerable, such as parents battling addiction or suffering from poor health, may be unable to receive a fair hearing.

McCarthy Bennett Holland offers FREE 30-minute, no-obligation, initial appointments for all family and matrimonial cases. To arrange yours, contact family & matrimonial specialist Gillian Lavelle 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 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”

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

Summer Budget 2015 round-up

The Chancellor recently presented the new government’s first Budget to Parliament. The first Conservative budget in 19 years, the emphasis was very much on deficit reduction and streamlining of the welfare system. Here, we look at some of the main points raised and how these may affect you and your business:

  • Employment

Importantly for many low-paid workers, the Chancellor has made the ‘living’ wage compulsory from April 2016, starting at £7.20 per hour for over 25s and rising to over £9 per hour by 2020.

3 million new apprenticeships are to be created by 2020 and firms who commit to the training of apprentices will be incentivised through the tax system.

Public sector pay is to increase by 1% per year for four years from 2016-17.

  • Personal & Business Taxation

Currently at £10,600, the Personal Allowance (the amount it is possible to earn before a person starts to pay Income Tax) will rise to £11,000 in 2016-17. The government’s intention is to increase the Personal Allowance to £12,500 by 2020, at which point legislation will be introduced to the effect that no Income Tax will be payable at all by anyone working 30 hours per week on the National Minimum Wage.

The 40% Income Tax band threshold is to increase from £42,385 to £43,000 in 2016.

Dividend Tax Credit, reducing the amount of tax paid on income from shares, is to be replaced by a £5,000 tax-free dividend allowance from April 2016. Tax rates on dividend income will then be increased, meaning that only those with significant dividend income should face a higher tax bill.

The main rate of Corporation Tax is to fall from 20% to 19% in 2017 and further to 18% in 2020. The Treasury estimates that over a million businesses should benefit from the reduction. In addition, the annual investment allowance, currently set temporarily at £200,000, will be made permanent at this level from January 2016. The annual investment allowance allows businesses to plan cash flow and spending on long-term investments, giving full tax relief in the year items are purchased.

The Employment Allowance will rise to £3,000 from April 2016, reducing employer National Insurance payments by £1,000. The Chancellor commented that this should allow businesses from next year to employ four people full-time on the National Living Wage and pay no National Insurance at all.

  • Inheritance Tax

From April 2017, individuals will be able to pass their home onto their children or grandchildren on death free of tax under a new ‘family home allowance’. Under the existing system, Inheritance Tax is charged at 40% on estates over the tax-free allowance of £325,000 per person. Unused allowances can be passed between spouses and civil partners; the family home allowance is to be added to this £325,000 threshold, resulting in a total tax-free allowance of up to £1million for surviving partners in 2020-21.

Large estates worth more than £2million will see the allowance gradually withdrawn.

  • Education

Free childcare provision is to increase from September 2017; currently, working families with 3 and 4 year olds receive 15 hours’ care each week but this will rise to 30 hours.

The 2016-17 academic year will see the introduction of ‘maintenance loan support’, replacing student grants. The amount available will increase to £8,200 and loans are to be repaid once the graduate earns more than £21,000 per annum.

  • Welfare reform

The Chancellor introduced a package of measures intended to make significant reductions to the country’s welfare bill. Amongst the steps announced included:

  • Tax credits, Local Housing Allowance and other ‘working-age’ benefits are to be frozen for four years from 2016-17, although this will not include statutory Maternity Allowance, maternity and paternity pay and sick pay;
  • The total amount a household can receive in benefits is to be capped at £20,000, and £23,000 in London;
  • Child Tax Credit will be capped at two children from April 2017. Therefore families with three or more children born after April 2017 will only receive credits for the first two children;
  • Universal Credit recipients aged 18-21 must apply for an apprenticeship, gain vocational on-the-job skills or go on a work placement six months after the start of their claim to continue to receive it;
  • Social housing rents are to be reduced by 1% per year for four years. Tenants on higher incomes will be required to pay rents which reflect open market values.
  • Other measures

Defence spending is to increase, with the Ministry of Defence budget rising by 0.5% above inflation each year to 2020-21. An additional £1.5bn per year should be available by 2020-21, allowing increased spending on military and intelligence.

The standard rate of Insurance Premium Tax is to increase to 9.5%; consumers may notice that the cost of household insurances such as home, contents and car increase accordingly.

Road tax will be reformed, introducing a flat rate of £140 for most new cars from 2017, save in their first year when tax remains linked to CO2 emissions. Electric cars pay no tax and more will be payable for more expensive vehicles. New cars and motorcycles will face their first MOT after four years rather than three.

More powers are to be devolved to Greater Manchester, including responsibility for fire services, land commission and collaboration on children’s services. Transport for the North is to be supported by £30m over three years and will receive more responsibility for policy.

How will you be affected by the Budget? We are interested to hear your views; connect with us on Twitter (@MBHSolicitors), Facebook or LinkedIn.

 

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 MBH Solicitors to discuss your legal requirements in confidence at:

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