Website Articles for March
Stories included
- Landlords will need written agreements for all tenancies
- Company directors disqualified following regulatory breaches
- Businesses facing ‘a blizzard of fresh red tape and taxes’
- High Court provides boost for creditors pursuing debts
- BA employee loses discrimination claim over wearing of a cross
- Wealthy divorcee must pay £5m to husband hit by the recession
- Parents should be careful when helping their children buy a home
- Date set for introducing new regulations relating to trusts
- Green paper offers new hope to ‘heroic’ grandparents
- ‘Insane delusions’ caused man to disinherit his relatives
Landlords will need written agreements for all tenancies
Landlords will have to provide written agreements for all tenancies under plans put forward by the Government.
Ministers say the agreements will “strengthen the hand of tenants” in the event of a dispute.
There will also be a new National Landlords Register which tenants can use to make basic checks when choosing accommodation. The register will provide information about how well landlords maintain their properties and deal with problems.
The register will also make it easier for councils to identify landlords and enforce regulations.
Tenants will be able to use a Government hotline to get free advice if they are experiencing difficulties with their landlord. This is expected to be available by the summer.
Tenancy rights will be extended to 150,000 people living in shared homes on a short term let basis. This will mainly help students and seasonal workers.
There will also be stricter regulation of managing and letting agents. Ministers hope this will help tackle rogue agents who damage the reputation of the private rented sector.
New legislation will be introduced to eliminate bad practices such as wrongful eviction and to raise general standards.
The measures have been put forward in a document entitled The Private Rented Sector: Professionalism and Quality: consultation responses and next steps. The intention is to ensure that tenants are given greater legal protection and more confidence about their rights.
Ministers now plan to work with landlord and tenant groups to finalise the proposals. The forthcoming General Election may change things, of course, but currently the Government intends to introduce legislation to create the National Landlords Register and implement the stricter regulations.
The proposed measures are part of a continuing effort to provide more control over the private rented sector. A number of other regulations have been introduced over the last few years including tenancy deposit protection schemes, licensing for houses in multiple occupation and energy performance certificates.
We shall keep clients informed of developments. Please contact us if you would like more information about landlord and tenant issues.
Company directors disqualified following regulatory breaches
Two financial advisers at a firm that went into administration after mis-selling investment products have been disqualified from acting as company directors.
The court heard they were responsible for regulatory breaches and keeping inadequate records.
The two men were directors of a regulated investment services company which sold structured capital at risk products know as SCARPS. The Financial Services Authority had investigated the company and the Financial Services Ombudsman had upheld four complaints against it.
The company then went into administration. Its liabilities were much greater than its assets and the Financial Services Compensation Scheme had to deal with thousands of substantial claims for compensation.
The High Court held that the advisers had under-rated the risk of the SCARPS they sold. While this by itself did not mean that they were so obviously incompetent that they should be disqualified, there were other reasons why they should be barred from acting as directors.
They had used direct marketing to sell SCARPS without any regard to the suitability of the product for the client. They had failed to comply with regulatory requirements that their marketing should be clear, fair and not misleading.
They did not properly explain to clients the risks involved or differentiate between fact and opinion. It meant consumers could not make an informed decision about whether or not to invest. Their record keeping had also been woefully inadequate.
The court held they were unfit to be directors and should be disqualified.
Please contact us if you would like more information about company law and compliance issues.
Businesses facing ‘a blizzard of fresh red tape and taxes’
New employment regulations will cost UK businesses £25.6bn over the next four years, according to research carried out by the British Chambers of Commerce (BCC).
The BCC refers to a “blizzard of fresh red tape and taxes” coming into effect between April this year and April 2014. Some of the more costly new laws include the Equality Bill which the BCC believes will have a one-off cost to business of £190m.
There is also the Agency Workers Directive which will create an annual recurring cost of £1.5bn from 2011, and the 2012 Pensions Reform which will create an annual cost of £4.8bn.
The BCC fears the cost of complying with the new regulations could deter companies from creating new jobs and so it’s calling on the Government to impose a three-year moratorium on the introduction of new employment laws. It believes this would help to promote economic recovery.
Whether the Government responds positively remains to be seen. In the meantime, employers will find they can keep costs to a minimum if they plan ahead. A little effort now to ensure policies are in place to deal with compliance issues can save thousands of pounds in the long term.
This is particularly so with the new Equality Bill which introduces new regulations on several issues including equal pay and dual discrimination.
Please contact us if you would like more information.
High Court provides boost for creditors pursuing debts
The High Court has ruled that creditors can still enforce debts even if the original loan or credit agreement is no longer available.
The case involved several major UK banks and their customers. It arose because under the Consumer Credit Act 1974, lenders must supply the borrower with a copy of the credit agreement within 12 days if asked to do so.
Some debtors have tried to use this requirement as a way of stopping debts being enforced when the creditor was unable to supply a copy of the original agreement.
Now Judge David Waksman has ruled that it is acceptable for the creditor to merely supply a reconstituted copy of the original loan agreement. Judge Waksman said: "The debtor has a legitimate interest in seeing a copy of the agreement he signed, not in the sense of proof of execution but as information."
However, he then went on to say: “The absence of a copy of a signed executed agreement is no evidence that such an agreement was not made.”
If the original loan agreement was not available it would be acceptable to provide a reconstituted version. This could be drawn up from other data held by the creditor but must include the name and address of the debtor as it was at the time when the agreement was made. "A creditor can satisfy its duty by providing a reconstituted version of the executed agreement which may be from sources other than the actual signed agreement itself.”
This did not mean that a creditor could simply invent a loan agreement retrospectively to comply with the law. "It must - of necessity - be based upon records held as to the debtor and the agreement he made.”
"That a creditor needs to take care when providing the copy is highlighted by the fact that it is implicit in its duty that it is an 'honest and accurate' copy."
Please contact us if you would like more information.
BA employee loses discrimination claim over wearing of a cross
A British Airways employee who was told she could not wear a cross over her uniform has lost her claim of indirect religious discrimination.
Nadia Eweida took her case to the Court of Appeal after losing at an employment tribunal and before the Employment Appeal Tribunal.
However, the Appeal Court judges held that Christianity did not require people to make a public display of their faith and therefore it was not discriminatory for an employer to have a dress code that prevented a cross being seen above the clothes.
The Appeal judges also held that indirect discrimination under the Employment Equality (Religion of Belief) Regulations 2003 required that a group of people should be disadvantaged. This was in contrast to other legislation such as the Disability Discrimination Act 1995 which provided for indirect discrimination against one person.
In this case, however, Ms Eweida was the only person claiming to have been disadvantaged. No one else was making a similar claim.
Her appeal was dismissed.
Please contact us if you would like more information about employment issues.
Wealthy divorcee must pay £5m to husband hit by the recession
A woman has been ordered to pay £5m to her former husband because his property and other assets have plummeted in value during the recession.
The couple are both American citizens but have lived in the UK since they were married nearly 20 years ago. Following the separation, she remained in the family home with the couple’s three children. The husband lived in a nearby house and was paying a substantial mortgage.
The wife was from a wealthy background and still had shares in her family’s business. The husband was a property developer and although he once had assets worth tens of millions of pounds, these had shrunk during the recession so there was now a net deficit.
If he were to liquidate the company he would face a large tax liability in the United States.
During the divorce proceedings, the judge valued the husband’s assets at zero, taking into account the latent tax liability. She divided the matrimonial assets equally and ordered the wife to make a lump sum payment of £5m. This was on the basis that the wife could continue living in the family home and the husband would retain the nearby mortgaged property.
The wife appealed against the lump sum order saying the judge had been wrong to make a snapshot valuation of the husband’s company at a time when property values were subject to dramatic fluctuations. She also submitted that the husband was determined to continue trading so the tax liability was not likely to become an issue in the foreseeable future.
However, she lost her case in the Court of Appeal which held that the original judge had exercised her discretion correctly to achieve fairness. The judge had considered the risks associated with the husband’s determination to continue trading and the outstanding mortgage on his home. She had taken all the important factors into account and reached an impressive judgment.
The wife’s appeal was therefore dismissed.
Please contact us if you would like more information about divorce proceedings or any aspect of matrimonial law.
Parents should be careful when helping their children buy a home
Parents are being urged to consider all the legal implications before handing over large sums of money to help their children buy a home.
The Law Society says families could be torn apart if things go wrong.
The current economic climate means 100% mortgages are no longer readily available. Most banks and building societies won’t lend unless the buyer can provide a large deposit – sometimes as high as 40%.
Such figures are beyond the reach of most first time buyers.
The Law Society says the strict mortgage regime means that an increasing number of young people are calling on the ‘bank of mum and dad’ to help them get on to the housing ladder.
However, problems can quickly emerge if there is no clear understanding of how and when a loan should be paid back.
The President of the Law Society, Robert Heslett, said: “If parents are helping their children, they should see a solicitor beforehand in order to draw up a loan agreement.
“It is very important that all parties involved are comfortable with the arrangement and that everyone knows where they stand with regards to paying back the money. While it’s unlikely your children will run off with your savings, handing over a large amount with no legal structure in place is a minefield. It could tear families apart if things went wrong.”
The Society stresses that parents should seek legal advice to protect their interests before handing over their life savings.
“A solicitor will also talk through all the options available, and provide alternatives, such as parents acting as loan guarantors or entering into a joint ownership agreement.
“Solicitors are trained experts and are highly experienced in navigating the maze of paper work and dealing with house purchases. Not only will a solicitor offer the best advice and service, they will help to avoid some unforeseen hazards that may occur down the line.”
Please contact us if you would like more information about helping your children on to the property ladder, or any aspect of buying and selling a home.
Date set for introducing new regulations relating to trusts
New regulations which could make it more attractive for some people to set up trusts will come into force on 6th April this year.
The Perpetuities and Accumulations Act 2009 will abolish the current 21-year limit during which private trusts can accumulate interest without having to distribute it to beneficiaries. It also simplifies the rules relating to perpetuities by introducing a single 125-year period for all new trusts.
The Act is based on recommendations put forward by the Law Commission which argued that there was no good reason for restricting a settler’s ability to direct or allow for the accumulation of income. In fact, such restrictions could create problems by obliging trustees to distribute income once the 21-year limit had been reached.
This meant money could be given to beneficiaries who were too young to receive it or incapable of dealing with it properly because of health or other issues.
Charitable trusts will be still be subject to the 21-year limit, however, to ensure that income is spent for the public benefit rather than be allowed to accumulate indefinitely.
Many experts believe the changes will make it more attractive to set up trusts because people can have more confidence that money will not be settled on beneficiaries when they are too young or if they are incapable of dealing with it for any other reason.
Please contact us if you would like more information about the changes or any aspect of setting up trusts.
Green paper offers new hope to ‘heroic’ grandparents
Family breakdowns mean that grandparents sometimes have to suffer the heartache of being denied contact with their grandchildren.
The have no automatic contact rights which means they can face a difficult battle if they are denied access by a son or daughter-in-law - or even in some cases by their own children.
Now, proposed new legislation outlined by the Government in ‘Support for All – the Families and Relationships Green Paper’ could help to improve the situation.
Ministers want to make it easier for grandparents – described as “unsung heroes” by Children’s minister Ed Balls - to seek contact with their grandchildren. As the law stands now, they have to get permission from a court before they can even start to make an application for contact.
The proposed new measures would remove that hurdle making the process easier.
Court action ought to be a last resort, of course. The first step should be to approach the parent who’s being obstructive and try to reach an agreement. This can difficult if they are feeling bitter after the break-up of a relationship but in time, most people will realise the value of their child having contact with the grandparents.
If that doesn’t work then mediation with the guidance of an independent mediator might help. However, both sides have to agree so it may not always be suitable.
Legal action may then become necessary, although there’s a good chance the problem could still be resolved before you get to court. Once the application is made, family advisory officers from the court agency CAFCASS may be appointed to examine welfare issues and prepare a report.
These reports are often strong enough to persuade the obstructive parent that contact would be good for their child. If not, the matter is likely to be decided by the court.
If the court decides in favour of contact with the grandparents then the parents will have to comply.
Legislation based on the Green Paper may still be a long way off but it should at least give grandparents confidence that the tide is turning in their favour and that their role in their grandchildren’s lives is highly valued. In the meantime, they can still ask for court permission to make an application for contact.
Please contact us if you would like more information about this or any matter relating to family law.
‘Insane delusions’ caused man to disinherit his relatives
A court has heard how a man was suffering from “insane delusions” when he revoked his will, disinheriting an old friend and some close family members.
When the man had been in good health he had made a will leaving most of his estate to a close relative and her daughter. He appointed an old friend to be the executor.
He often complained to friends and family that he did not like his adopted children and was leaving them nothing.
He then contracted a terminal illness and went to live in a nursing home. His beneficiaries were refused access to see him at this time except for on one occasion when his old friend paid a visit. However, the man developed the belief that his friend just wanted his property.
On another occasion, some of his close family members rushed into his room after being denied access to see him. The man then contacted his solicitor saying his friend and relatives were terrible people and he wanted them removed from his will. His wish was carried out and he later died.
This meant most of the estate would now pass to the man’s adopted children.
The disinherited family members applied for a declaration that the revocation of the will was invalid. They produced evidence from a medical expert that the man had lacked testamentary capacity in the two months before he died.
The adopted children accepted that the man’s sudden beliefs about his former beneficiaries were brought on by insane delusions but said that those delusions did not influence his decision to revoke the will.
However, the court held that the delusions had been influential. In the space of a few months, he had changed his views about those who had been closest to him for many years and he did so for reasons that were non-existent or based on delusions.
He clearly lacked testamentary capacity and the revocation of the will was of no legal effect. Probate was granted to the friend as the executor of the will.
Please contact us if you would like more information about wills and probate.
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