July 2010 News Articles
Government scraps plans to tighten regulations on private rented sector
The new Government has scrapped plans to impose tighter regulations on the private rented sector.
The previous Labour administration had intended to implement the proposals put forward in the Rugg review. That would have involved setting up a National Register of Landlords, making written tenancy agreements compulsory and introducing stricter regulation of letting and managing agents.
However, the new Housing Minister Grant Shapps believes that the current regulatory system is sufficient and strikes the right balance between the rights and responsibilities of landlords and tenants.
Mr Shapps said that rather than introduce new regulations, councils should make sure they use the powers they already have to crack down on the minority of rogue landlords who cause most of the problems.
Local authorities can already force landlords to remove hazards from their properties. If landlords resist, they can prohibit the use of the affected part of the property. They can also choose to make the improvements themselves and pass the cost on to the landlord.
Mr Shapps said: "With the vast majority of England's three million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords.”
Please contact us if you would like more information about landlord and tenant issues.
More than £62bn now owed in overdue invoices
More than £62bn is now owed in overdue invoices in the UK, according to new research by NatWest and Royal Bank of Scotland.
The survey shows that 71% of SMEs in the UK have suffered because of late payments. Larger companies may have a higher value of invoices paid late but in terms of proportion of turnover, it is the smaller firms that are worst affected.
Approximately 1 in 5 businesses with an annual turnover of between £250,000 and £500,000 has suffered compared with just 1 in 15 larger companies.
Peter Ibbetson, Chairman of Small Business, NatWest and RBS, said: "The reality for most small businesses is that they are too busy to spend time chasing payment and managing debtors.”
A total of 235,000 SMEs say that the time they have spent chasing debts has had an adverse effect on their business yet less than half have take action to deal with the problem.
This is unfortunate because some simple steps can often lead to early settlement. For example, a solicitor’s letter will often be enough to secure payment because people realise you are serious and they don’t want to run the risk of court action.
Firms should also be aware that they are entitled to levy statutory late payment fees and impose punitive interest charges. Taken together, this can earn more than enough to pay any legal fees involved and turn credit control into a profit making operation.
Please contact us for more information and advice on how you can ensure prompt settlement of overdue invoices.
Businessmen win £427,500 damages from valuers
A group of businessmen have been awarded damages of £427,500 after some finance projects were incorrectly assessed by valuers at a professional services firm.
The businessmen had set up a company to bid for private finance initiative projects involving healthcare facilities. A total of 11 projects were eventually undertaken and the businessmen engaged the valuers to assess the new company’s shares based on those projects.
Based on the valuers’ figures, the businessmen then sold their shares to a bank for £5.5m. However, just 11 months later, the bank sold the same shares for £40m.
The businessmen tried to recover the difference in the two prices from the valuers on the basis that they had been negligent when they valued the shares. The valuers submitted that their assessments had been undertaken with all the proper care and skill required and, in any case, a clause in their contract limited liability to £1m.
The court held that the valuers had carried out most of the work correctly but had then made a mistake when setting the discount percentage. A reasonably competent valuer ought to have valued the portfolio at £8.8m.
The judge held that the clause limiting liability was valid and set the damages payable at £427,500.
Please contact us if you would like more information about professional negligence or any of the issues raised in this article.
Mistake over consultation costs property company £270,000
The need for businesses to comply exactly with relevant regulations was illustrated in a recent case in which a property company was left with a bill for £270,000 after failing to consult properly with its leaseholders.
The company had wanted to carry out major works at a block of flats and notified leaseholders of its plans, as required by law.
A consultation period then began in which the leaseholders exercised their rights to see the various estimates being considered, put forward their observations and suggest alternative contractors.
During this period, the leaseholders began to express concern that they were not satisfied with the company’s preferred choice of contractor and the reasonableness of the proposed charges. While they were still discussing the specifications of the works to be carried out, they were informed that the contract would be awarded to the firm that had put in the lowest bid.
The case went before the Leasehold Valuation Tribunal (LVT) which concluded that as the leaseholders were told the contract had already been awarded, this meant that “the consultation period was for all practical purposes curtailed”.
This made the lessees feel that “further representations were futile”. The Tribunal held that certain aspects of the Consultation Regulations had not been complied with and it also declined to dispense with the need for compliance. This meant that the liability of each lessee was limited to just £250 each and so the company would have to pay the remaining £270,000 necessary to carry out the work.
It appealed to the Upper Tribunal (Lands Chamber) but that has now upheld the decision of the LVT.
Lord Justice Carnwath said: “We are unable to say that LVT has erred in principle, or that its decision was clearly wrong. The financial consequence may be thought disproportionately damaging to the landlord, and disproportionately advantageous to the lessees, but, as we have said, that is the effect of the legislation.”
Please contact us if you would like more information about the issues raised in this article.
Council wrong to refuse planning permission for housing development
The High court has ruled that a local authority was wrong to refuse outline planning permission for a housing development on a greenfield site.
The court heard that the authority had identified the site as being suitable for development but still decided to refuse planning permission. This was because it believed that there was a sufficient supply of nearby brownfield sites available. It submitted that developing greenfield sites in preference to brownfield sites would have a detrimental effect on the regeneration of urban areas.
The developer appealed to the planning inspector who overturned the authority’s decision and gave several reasons for doing so. He said there weren’t enough homes to meet the anticipated future demand in the area. The authority had already identified the site as suitable for development and had failed to show that there was an adequate supply of brownfield sites.
The inspector concluded that in this particular case, the site was too small to have any significant effect on the regeneration of urban areas. It was therefore appropriate to grant outline permission, subject to conditions.
The authority appealed to the High Court but that has now upheld the inspector’s decision.
Please contact us if you would like more information about development issues.
Workers get more help to make employers pay tribunal awards
Workers can now benefit from a scheme to ensure they receive payments awarded by employment tribunals.
The Employment Tribunal Fast Track scheme was introduced after research by the Ministry of Justice, published in May 2009, showed that 39% of people granted awards had not been paid and only 53% had been paid in full.
Now employees can call on the services of High Court Enforcement Officers if employers fail to pay. The officers can deal with court processes for them and move quickly to enforcement.
The only cost to the employee is the £50 court fee needed to issue a writ to seize assets to cover the amount owed. This fee would then be added to the debt owed by the employer.
Employers who fail to pay tribunal awards have been placed on a database since April last year. More than 500 firms and individuals have been added to the database which can be searched by the public and credit reference agencies.
Housing market experts want to reform home buying process
Some of the main professional organisations involved in the buying and selling of homes have been discussing ways to provide a better service to the consumer.
The Building Societies Association (BSA) chaired a meeting which included solicitors, estate agents, surveyors and consumer bodies to develop strategies to improve the system.
Most professionals welcomed the Government’s decision to abolish HIPs but said more still needs to be done. Paul Broadhead, Head of Mortgage Policy at the BSA, said: “The new Government has acted swiftly since coming to office suspending HIPs within its first few weeks. Work must continue to ensure customers receive better value and an improved experience. A key component in reforming the process remains providing the right information to the right person at the right time."
Christopher Hamer, the Property Ombudsman, said: "It is clear that a lack of consumer understanding and poor information on a wide range of issues from roles, terms of business and the process overall place consumers in a weak position."
The Law Society says that it has always supported the idea of buyers receiving information up front about a property they wish to buy but HIPs had not properly addressed the issue. It said: “Concern about the additional cost to sellers and lack of benefit to consumers has prompted the Law Society to propose a complete and comprehensive set of documents, prepared by a solicitor, who has the benefit of specialist legal training and professional responsibility.
“The Society is recommending that the information be provided in a standard format to bring proper value to consumers and improvements in the process whilst at the same time reducing cost.”
The president Robert Heslett added: "The professional integrity and legal skills which solicitors have traditionally brought to the housing market are probably more important now than they have ever been.
“The marked increase in property fraud, including registration fraud and mortgage fraud, means that the role of the solicitors as the gatekeeper in the process assumes a greater importance.
“This role falls to solicitors as the most highly regulated professionals in the process. Solicitors can help consumers understand the residential conveyancing process, the role of the solicitor and others in the buying and selling market and to make informed choices."
We shall keep clients informed of developments. In the meantime, please contact us if you would more information about buying and selling a home.
Court ruling could help many grandparent carers
The high number of family breakdowns means that thousands of grandparents now play a major role in looking after children.
Many find they become the primary carer for their grandchildren – sometimes with no or only limited financial help. Now in a landmark case, a 64-year-old grandmother has won a legal battle with her local authority because it had refused to pay her the same rate as a foster carer for looking after her granddaughter.
The woman, who cannot be named for legal reasons, has looked after the girl since 2005 when the council told her the only other alternative was to take the girl into care as her parents were unable to cope. The council then decided to treat the case as if it were a private, family arrangement and refused to pay her the full carer’s rate.
The High Court rejected that view and ruled that the payment should rise from £63 weekly to £146 in line with the average rate for foster parents with no family connections.
The case clearly has widespread implications for other local authorities and potentially thousands of grandparents all over the country so the council has been given permission to appeal. It means there may be further developments, but the High Court decision shows that the law can come down on the side of grandparents who find themselves looking after children at a time in their lives when they were expecting to take things easy.
Some people may say that grandparents have a duty to look after their grandchildren if necessary, but it’s also true that bringing up a child is expensive.
It can be especially difficult as a person gets older and their earning capacity decreases as they approach retirement.
Whatever one’s view, the ruling highlights the increasing value being placed on the role of grandparents as society changes and families become less stable.
Please contact us if you would like more information about this or any aspect of family law.
Woman leaves £250,000 to taxi driver in her will
An 86-year-old woman has left all of her £250,000 estate to a taxi driver who took her shopping and drove her to and from the doctors.
Mary Watson was one of Don Pratt’s regular customers for more than 20 years. They often chatted and Mr Pratt used to carry her shopping into her home in Newquay.
She told Mr Pratt that if she lived longer than her husband then she would remember him in her will. Mrs Watson moved to Northampton ten years ago but kept in touch with Mr Pratt until about two years before she died.
He says he didn’t really believe her when she said she would leave him something but then he got a phone call out of the blue from her solicitor. "I couldn't believe it when we found out she had left us everything.
"I'm not sure how her family feel about it, but the solicitor was clear that she wanted me to have what she left."
Mr Pratt has now been able to sell his taxi business and retire.
Few people will want to leave everything to their taxi driver but everyone can have control over who inherits their estate. If you want to ensure your money goes to the people who matter to you then it is vital that you make a will.
If you die intestate, that is without having made a will, then your estate will be divided in a way decided by the law. However, if you do make a will then you can specify exactly who gets what from your estate. That way you can ensure that the people who matter to you are properly provided for – whether it’s your spouse, your children, your favourite charity … or even your taxi driver.
Please contact us if you would like more information about wills and probate.
Homeowners lose boundary dispute because of adverse possession
A woman and her son have lost a boundary dispute with their neighbour because of the legal concept of adverse possession.
This is the principle whereby people can sometimes claim ownership of land if they have had exclusive possession of it for a certain period.
The case involved a disagreement over a strip of land just 35cms wide which separated two terraced houses numbered 38 and 39. The woman and her son, the Huntleys, took legal action after their neighbour decided to erect a fence on the disputed area.
They claimed that this would make it very difficult for them to open the doors of their car. The legal proceedings centred on the exact location of the original boundary.
The Huntleys, who lived at number 38, submitted that it followed a straight line, known as the “red line” on the map used in the trial. The neighbour, who lived at 39, submitted that it followed the “green line” which was more in his favour.
The Court of Appeal held that whatever the original boundary might have been, it was clear that number 39 had been in exclusive possession of the disputed strip from 1935 onwards. It meant that by 1950 at the latest, any title that the owners of number 38 might have claimed had been extinguished by adverse possession.
Giving judgment, Lord Justice Rimer said “the consequence of the prior adverse possession was that the green line marked the present boundary between the properties”.
It is not uncommon for neighbour disputes to lead to court action but it is usually better for disagreements to be resolved amicably.
Clarification of the legal position may help resolve the problem right at the outset. If there is still a disagreement then a solicitor may be able to help arrange mediation so that a settlement can be reached that is fair to both sides.
This approach is usually far less stressful than going to court and it may help you to maintain a good working relationship with your neighbour. This is very important as you may have to live alongside each other for many years to come.
Please contact us if you would like more information about the issues raised in this article.
Most workers not aware of employment and redundancy rights
Most UK workers are not aware of their employment and redundancy rights, according to new research by Which.
The consumer organisation carried out a survey involving 4,000 people and found that more than half were worried about being made redundant or having their pay reduced. However, 9 out of 10 were unable to answer key questions about redundancy procedures and payments and other important employment rights.
With so many companies still laying people off it is important that everyone should be aware of their rights to ensure they are treated fairly.
If redundancies are to be made then your employer should consult with you individually or, if there are to be a large number of redundancies, with your staff or union representatives as soon as possible. This should be at least 30 days before the first redundancy if there are between 20 and 99 jobs to go and at least 90 days in advance if the number is over 100.
You should be provided with written details about such things as the reasons for the redundancies, the numbers and categories of people involved and how the employees affected will be selected. The company can decide how the selection process will work but it must be fair and based on evidence rather than who the employer likes or dislikes.
If you are selected then your employer should consult with you individually and explain why. He must also consider whether there are any alternatives to redundancy. If the employer fails to do this then the redundancy may be considered unfair.
If you feel you have been selected unfairly you can appeal and if necessary take your case to an employment tribunal.
You will be entitled to statutory redundancy pay if you have worked continuously for your employer for two years or more. The entitlement varies from half a week’s pay for each year of service to one and a half week’s pay depending on your age. The statutory maximum weekly pay has just risen to £380 but your firm may have an in-house agreement providing better terms.
You are also entitled to work your full notice period or be paid in lieu if your employer wants you to leave earlier.
Your firm may want to enter into compromise agreements with redundant staff. The agreements set out the terms and conditions relating to the termination of employment and once signed will prevent the employee bringing tribunal claims in future, except for personal injuries or pension issues.
The firm may provide an enhanced redundancy package to encourage you to sign. Because you will be waiving the right to bring an employment claim in future, you must receive independent legal advice before entering into a compromise agreement to ensure you know and understand all the implications.
This advice should be provided by a law firm that is experienced in employment matters and is not acting for the company making the redundancies.
The costs are often paid for by the employer of the redundant workers as it provides a cost effective way to reach a settlement.
Compromise agreements can be beneficial to both sides as long as you are fully aware of what you are doing.
Please contact us if you would like more information about redundancy arrangements or any aspect of employment law.