BackArchived News and Articles - 2008
- Families, Co-Habitation and Property Ownership . . . The Pitfalls
- Annual Increase in Tribunal Awards
- E-Conveyancing on the Way
- Evasiveness Shows True Intentions
- Right to Buy - Common Sense Prevails in Definition of Premises
- Welcome News for People Injured Abroad
- Whose Fault is it Anyway?
- HIPS available to you from £275
- A Promise is a Promise
- Broken Homes – Split Houses
- Child Custody – Expert Evidence Crucial
- Family of Dead Motorcyclist Receives £110,000
- In brief - Age Discrimination Cases on Hold
- New HIPs Resolution Service
- Tips on property purchase
- Good news for victim of hit and run driver
- Protecting business interests
- When a promise is not a promise
- Renewing your business premises lease – why do you need us?
- Pre-nuptials – worth their weight in gold?
- Boy Injured on Bouncy Castle – Judgment Overturned
- Boy Injured on Bouncy Castle to Receive Sizeable Settlement
- Company Accounts – New Disclosure Requirements
- Employee Liable for Employer's Losses
- Foreign Marriage Not Recognised
- Guidance on Letters of Intent
- HIP Temporary Provisions Extended
Despite the credit crunch and falling prices, people are still acquiring houses, whether because of changing circumstances such as divorce, death or marriage, or to take advantage of what some believe is a competitive market. If you are a client or potential client, looking to take the plunge, how can you capitalise on your investment and avoid common and often expensive pit-falls? Nasty surprises that you discover after you moved, such as, for example, a cleverly concealed damp problem or noisy neighbours do not make for a happy housewarming. Here are some things that you should perhaps consider it at a very early stage.
- 1Location is the first thing to consider. Preliminary checks can be made to determine whether the property is on a flood plain or on blighted land. Other obvious indications of potential risks, such as police incident signs and the state of neighbours’ cars can be an important indicator of what goes on in the street or in that area. If you are buying a flat, you should look at the estate and the common parts to see how the building is being kept. Badly maintained common areas can often be symptomatic of a badly managed building very often caused by lax management or by service charge arrears being allowed to accelerate.
- Problems can be caused by properties that are above or next to commercial premises. These issues can be a turn off for buyers particularly in a weak market.
- Being close to an airport or airfield or close to overhead pylons can also be a negative point for potential buyers.
- If the property you are viewing is occupied but the Seller is not showing you around personally, then you should ask the Agent why. Very often a Seller will ask an Agent to carry out viewings if they do not want to answer difficult questions. By dealing with matters remotely they can avoid difficult questions and be economical with the truth. A fresh paint job should also ring alarm bells.
- There is a trend for buyers to shy away from ground floor or lower ground floor flats because they are associated with lack of light, security and potentially with damp issues.
- Period conversions which have had a lot alterations may also be a problem as often works are done without proper planning consent or building regulation approvals. Similarly loft and roof conversions can have similar problems. Look for uneven door frames, uneven roofs and cracked walls.
- Try to imagine what your dream home will be like at different times of the year. A cosy cottage lit by low lamps on a wintry evening may seem idyllic but how much natural light will there be on summer days. Older properties with quirky layouts may need additional work.
- If a property has grade II listing you should be aware of just how restricted this can be. It may not be just a case of not being able to change windows but can go as far as dictating the colour that the window can be painted, the type of skirting boards that can be used and even the style of door and window furniture. Conservation areas are also restrictive and often under estimated. Out buildings may need costly restoration and certainly may not be able to be knocked down, and all trees are protected.
- Leases can be another problem area. Short lease properties are hard to sell and the length of the lease should be reflected in the price of the property. If the lease needs extending then written confirmation of the cost of extending the lease should be obtained from the Landlord.
- Even buying a new build property it is worth getting an architect or surveyor on board at an early stage to check the quality of the building work undertaken. Do not be fooled by the way that a show home has been dressed. Often builders will utilise smaller than average furniture and sometimes interior doors may be left off to make the property look bigger than it actually is. Look for NHBC accreditation.
Bird and Lovibond can assist you at an early stage to carry out checks and searches should you have any additional concerns in relation to your property purchase. Please contact us at an early stage to discuss any issues as this may save disappointment and wasted costs.
Please see our Conveyancing Services page for more information.
Uninsured drivers are a menace, but worse still are drivers who are involved in an accident but cannot be traced.
In 1946, the Motor Insurance Bureau (MIB) was established as a private company limited by guarantee for the purpose of entering into agreements with the Government to compensate the victims of negligent uninsured and untraced motorists. Every insurer underwriting compulsory motor insurance is obliged, by virtue of the Road Traffic Act 1988, to be a member of the MIB and to contribute to its funding.
In a recent case, a claim was made by a man who was struck by an unidentified hit and run driver in 1991, when he was three years old. In 1999, his parents became aware that a claim for compensation could be made to the MIB and submitted one on his behalf. The claim was rejected because under the Untraced Drivers' Agreement (UDA) in operation at that time, the time limit for claims to the MIB for injuries caused by untraced drivers was three years.
When he was 16 years of age, the victim's parents began proceedings against the MIB, claiming that European law required that the limitations applying to the MIB fund should be no less favourable than those applying generally and, in a ‘normal’ action, the time limit is suspended during the minority of a claimant – in other words, it starts to run only on the 18th birthday of the claimant.
The judge ruled for the claimant and the MIB appealed to the Court of Appeal, which referred the issue to the European Court of Justice (ECJ).
The ECJ considered the position and ruled that the protection given had to be equivalent to that available where the driver is uninsured. The claim would have been admissible at any time prior to the victim's 21st birthday had the driver been insured or uninsured but identified. The UDA clearly gave less favourable treatment to people injured by a driver who could not be traced.
Accordingly, the claimant was able to proceed with his claim to the MIB.
Many people are unaware of the existence of the MIB fund and that claims can be pursued against untraced or uninsured drivers. For further information contact Gary Bennett, David Trood, Michelle Everest or Amandip Dhaliwal.
When an employee leaves to go to work for another organisation, their employer may wish to have in place safeguards to protect sensitive information relating to the business, to prevent it from falling into the hands of a competitor.
One possible way of doing this is through a post-termination restrictive covenant, but this will only be enforceable if the ex-employer can show that it is reasonably necessary to protect his legitimate business interests, which include trade secrets or confidential information and customer information. A restrictive covenant that goes beyond what is reasonably necessary to protect these interests will not be enforceable. However, a restrictive covenant that is widely drafted may be reasonable in the case of senior employees, depending on the individual circumstances involved.
In addition, all employees have a duty to serve their employer with honesty and fidelity. Company directors owe a fiduciary duty to act in the best interests of the company, as do employees who hold a senior position within the organisation. Employees who become shareholders may also be bound by the terms of any shareholder agreement entered into.
In Kynixa Ltd. v Hynes and others, Mr Hynes, Ms Preston and Ms Smith had held key roles working for Kynixa, a specialist provider of rehabilitation and case management services for people who have suffered an injury. Over a period of time, all three resigned and went to work for a competitor company, without informing Kynixa of their intentions or the identity of their new employer.
The High Court found that all three ex-employees had breached their duty of fidelity by positively misleading Kynixa as to their true intentions. In addition, Mr Hynes and Ms Preston were found to be in breach of their fiduciary duties because they had not informed Kynixa of their negotiations with a competitor. The two also held shares in the company and were found to be in breach of restrictive covenants, contained in the shareholders’ agreement, which ran for one year from the date when they ceased to be connected with Kynixa. Mr Hynes and Ms Preston argued that this was too long a period to be enforceable but the Court judged that although the post-termination covenants were very wide, in the circumstances they were reasonable to protect the legitimate interests of the business and were therefore enforceable. Kynixa operated within a small, fiercely competitive market and the disclosure of trade secrets to a competitor could be particularly damaging to its business. Furthermore, Mr Hynes and Ms Preston had a choice as to whether or not to enter into the shareholder agreement and they had both chosen to do so for (potentially) substantial gain.
As a result of this ruling, substantial damages will be payable to Kynixa by the three ex-employees.
We can advise you when drafting post-termination restrictive covenant clauses to ensure that they are tailored to cover the particular circumstances relating to the individual employee concerned. Contact David Trood for advice.
Nowadays, it is becoming less and less common for business to be transacted ‘on a handshake’ and a recent case highlights the dangers of failing to get formal documentation in place to confirm the terms of an agreement.
The case involved a property developer, who made an oral agreement with the management of a company that owned a block of flats to the effect that he would buy the block once he had obtained planning permission on the property. The details of the agreement were that if planning permission were achieved, the company would sell the property to the developer (or a company nominated by him) for £12 million and then the developer would develop and sell the property. The owner was also to be entitled to 50 per cent of the sale proceeds exceeding £24 million.
The developer spent a considerable amount of time and money on obtaining the requisite planning permission only to find that the owner of the flats then refused to enter into a contract for sale on the agreed terms.
The developer sought a lien (a charge) over the property to secure his interest, basing his case on the argument that the agreement had created proprietary estoppel against the property owner.
The doctrine of proprietary estoppel is that it is inequitable for the legal title holder of a property to deny a right to anyone who has acted to his or her detriment, having relied on an assurance from the owner of the legal title that he or she will acquire rights in or over the property.
The developer therefore argued that estoppel applied because he had acted to his detriment by spending the time and money necessary to obtain the planning permission and had done so on the basis of the assurance from the owner that the property would be sold to him on the terms agreed.
The case was appealed to the House of Lords. The Law Lords concluded that where the agreement was ‘subject to contract’, estoppel could not ordinarily arise because the prospective purchaser’s expectation of acquiring an interest in the property was subject to a contingency that was under the control of the other party and was therefore speculative. The other salient point is that oral agreements over land are not binding and the developer was aware of that.
In spite of the fact that the property owner’s behaviour was unconscionable, the case could not be made out. The question arose, therefore, of what compensation was appropriate for the developer.
The Lords considered the fair recompense for the developer would be the extent of unjust enrichment received by the property company, which was the value of the services it had received from the developer without having to pay for them.
The developer therefore stands to receive only a fair value for his efforts in obtaining the planning permission for the owner. Failing to put the appropriate documentation in place means that the developer will miss out on the considerable profit he was expecting. This case is yet another demonstration of the importance of putting binding contracts in place when arrangements such as this are made.
So your Lease is running out and you want to renew it – sounds simple, but are there pitfalls?
Consider the following for example:
- Does your current lease definitely give you the legal right to renew? If not, you could find yourself out of the premises desperately looking for somewhere else to go at a higher rent.
- Did you know that if you do have the legal right to renew, you may be able to just stay in the premises paying the same rent until the Landlord does something about it. Sounds good – but what if market rents are falling – will it be better to take action to get the rent reduced?
- You would actually like to have the comfort of a new fixed term Lease but the Landlord has done nothing. What you need to do is serve a legal Notice on the Landlord – but how do you do this and on what terms?
- The Landlord has sent you a Notice under Section 25 of the Landlord & Tenant Act 1954 terminating your current Lease but offering terms for a renewal. Did you know that if you did not sign a new Lease before the end of the Notice period you must either get a legal time extension or make an application to Court otherwise you will lose your legal rights of renewal and so may lose your premises and, possibly, your business?
- The Landlord has sent you a Notice under Section 25 of the Landlord & Tenant Act 1954 terminating your current Lease but this time is telling you they will not renew your Lease. Can they do this and if so, would you get any compensation?
- You are renewing your Lease and the Landlord is offering terms as to the length and new rent and maybe other matters with which you are not entirely happy – do you have to accept what the Landlord offers? What sort of notice to quit do you have to give if you decide not to renew?
We can advise you on all these and other related issues to your Lease renewal (such as break clauses or dilapidations) and your business so as to ensure that you get a good deal and above all do not lose your premises.
Contact: Simon Nash at our Uxbridge office.
The recent McCartney Case and indeed the slightly less high profile case involving Mr and Mrs Miller did highlight the moving attitudes of the Court in respect of situations involving short marriages.
Previously the advice I would give would centre around the concept of short marriages (defined loosely as three to four years or under) where the couple will simply be put back in a position, as if they had never met, i.e. the focus is on the joint assets accrued during the marriage. The case of Miller and, to a lesser extent, McCartney effectively rode a legal coach and horses through that unofficial principle of advice.
The extent of Mrs Miller's financial settlement in what was a short and childless marriage was a surprise to both legal commentators and indeed general public opinion.
These issues lend themselves to the question that I am asked most when out socialising, which is "are pre-nuptial agreements valid in English Law?"
The lay opinion seems to be that they are not worth the paper they are written on. Whilst it is right to say that they have no validity as an absolute binding document, it is right to say that judicial opinion expressed previously, has indicated that a pre-nuptial agreement will be looked at by a Judge and given the weight that is felt appropriate in the overall circumstances involved. Whilst this may sound to some like a judicial fudge, it is a significant departure from the previously expressed judicial opinion on such matters.
Indeed, cases such as Miller will inevitably mean that we are naturally moving closer towards the potential enforcement of such agreement.
Therefore, I have certainly noted a rise in the number of parties who wish to enter into a pre-nuptial style agreement, regardless of the fact that they are not one hundred percent binding in Law.
However, an important point to note is that if there is a significant change in the parties circumstances, i.e. the birth of a child post preparation of the Agreement, then the validity of the agreement would diminish to something approaching nil. Therefore, these agreements are perhaps better reserved for couples who are older and perhaps venturing into marriage for the second time, where there is a large differential between the financial assets owned by the parties.
Also I have noted couples wishing to enter into Civil Partnerships seeking to address assets through a pre-nuptial style arrangement.
Therefore, there is no doubt that, whilst generally the completion of the pre-nuptial is not on many couples Wedding List of "things to do", inevitably they will become more of a consideration in years to come.
For further advice and assistance on pre-nuptial style arrangements contact me, Tony Neocleous at our Uxbridge office.
The Court of Appeal has overturned the High Court’s ruling that a boy who suffered brain damage after he was kicked in the head while playing on a bouncy castle should be awarded compensation that could have amounted to £1 million.
Sam Harris, who was 11 years old at the time of the accident, had been playing on a bouncy castle set up in a field behind the home of Catherine and Timothy Perry. The Perrys had hired a bouncy castle and a bungee run for their triplets' birthday party. Sam, who was passing with his father, asked Catherine Perry if he could join in.
Whilst on the bouncy castle Sam was kicked in the head by a 15-year-old boy doing a somersault. Sam's skull was fractured and he suffered a very serious and traumatic brain injury. As a result, he now has severe behavioural problems and requires round the clock care.
In May, the High Court found the Perrys liable for damages. In its view, the accident had been caused because they had not provided adequate supervision for the children playing on the bouncy castle and the bungee run. The Court found that there should have been someone there to prevent the older boy from using the bouncy castle at the same time as the younger children and to ensure that dangerous play was prevented. The hire contract for the castle also stipulated that it should be under constant supervision whilst in use. At the time of the accident, Mrs Perry had her back turned away from the castle while attending to a child on the bungee run.
The Perrys appealed against the High Court’s decision, arguing that they had acted no differently from parents up and down the country.
The Court of Appeal judged that Mrs Perry could not be blamed for what was a ‘freak and tragic accident’. Lord Chief Justice Lord Phillips said, “The manner in which she was supervising activities on the bouncy castle and the bungee run accorded with the demands of reasonable care for the children using them.” He added, “It is quite impractical for parents to keep children under constant surveillance or even supervision and it would not be in the public interest for the law to impose a duty upon them to do so.”
The Court judged that Mrs Perry had acted reasonably in thinking that she could supervise both play activities at the same time and the injury sustained by Sam, whilst severe, could not reasonably have been foreseen.
As a result of this ruling, Sam will not receive compensation for his injury. However, it is thought likely that his parents will apply to take his case to the House of Lords, despite the Court of Appeal having refused their request for permission to appeal.
A boy who suffered brain damage after he was kicked in the head while playing on a bouncy castle has been awarded compensation that could amount to £1 million, a ruling that will cause parents to stop and think.
Sam Harris, who was 11 years old at the time of the accident, had been playing on a bouncy castle set up in a field behind the home of Catherine and Timothy Perry. The Perrys had hired the bouncy castle for their triplets' birthday party. Sam, who was passing with his father, asked Catherine Perry if he could join in.
Whilst on the bouncy castle Sam was kicked in the head by a 15-year-old boy doing a somersault. Sam's skull was fractured and he suffered a very serious and traumatic brain injury. As a result, he now has severe behavioural problems and requires round the clock care.
In court the judge decided that the accident had been caused because the Perrys had not supervised properly the children playing on the bouncy castle. There should have been someone there to prevent the older boy from using it at the same time as the younger children and to ensure that dangerous play was prevented. The hire contract for the castle also stipulated that it should be under constant supervision whilst in use. At the time of the accident, however, Mrs Perry had her back turned away from the castle while attending to another child.
The judge dismissed the defence's claim that Sam's father should have provided better supervision.
The total compensation payable could be as much as £1 million.
The Perrys have been given permission to appeal against the decision although the judge rated their chances of succeeding as ‘poor’.
The Companies Act 2006 has led to a number of changes in accounting requirements for companies, chief amongst which are the removal of the need to hold an annual general meeting and the change in the filing deadline for private companies to nine months after their financial year end. Public companies must file their accounts with the Registrar of Companies within six months of the year end and listed companies within four months.
Companies which do not hold annual general meetings must send out to members annual accounts, or summary financial statements if appropriate, by the time these are due to be filed with the Registrar.
Other important changes are the removal of the option not to prepare group accounts for medium-sized groups and a new requirement that medium-sized companies must disclose their turnover. There is, however, no need for an analysis of turnover.
Employees who breach their duty of good faith to their employer can be held to account for any resultant losses to the employer, even if the employee has not benefited personally from the breach.
A recent High Court case involved an insurance broker who backdated insurance cover notes, which allowed claims to be made by the firm’s clients who would otherwise have been uninsured. Following an investigation by the insurance company involved, the firm that employed the broker accepted that backdated cover notes had been issued and reached a settlement with the insurer, which involved paying them compensation.
The firm dismissed the broker and sued him for its losses, which were the payment made to the insurance company plus the increase in the cost of its professional indemnity insurance and other costs which had arisen by virtue of the broker’s breach of his duty of good faith.
The Court accepted that the accusations made against the broker were very serious and that the more serious these were, the higher the standard of proof had to be, especially in the absence of any evidence of any personal gain resulting from the backdating of the cover notes.
Despite the broker’s excellent past track record, the judge ruled that the evidence was compelling that he had backdated the cover notes and that this had caused each of the losses for which his ex-employer claimed. Accordingly, he was liable for the losses.
If you find yourself in a similar position, contact David Trood for advice.
A marriage carried out under foreign law will not be recognised as valid in England and Wales if it could not have been validly contracted under English law.
This was the conclusion of the court after a Bangladeshi couple sought an order that the marriage of their son, in a Bangladeshi ceremony, was a valid marriage under English law. Their son could not marry here as he is autistic and lacks the intellectual capacity necessary to be a party to a valid marriage.
The ceremony was conducted over the telephone, he being in England at the time and his bride in Bangladesh.
The judge concluded that the ceremony was void under English law and the man’s parents appealed.
The Court of Appeal considered that the rules governing domiciliaries of two countries applied but those rules could not help validate the marriage under English law. Nor could public policy considerations be ignored – not every marriage contracted validly abroad was entitled to be recognised as valid by the English court. Indeed, the actions of the man’s parents were potentially, if not actually, abusive to him and the court had the duty to protect him from that abuse.
Letters of intent are widely used in the building trade, because it is normal for both developer and contractor to wish to make progress on a building project without having to wait until the formal contractual arrangements have been fully agreed. However, letters of intent are fraught with possible pitfalls and have led to a procession of cases coming before the courts. The best way to ensure their successful use is to take advice to ensure the drafting of any documentation is as tight as possible.
Following yet another recent case dealing with a dispute (this time involving more than £1 million) over work done under letters of intent, the court has issued guidance over their use.
The recommendations are that any letter should:
- state clearly whether it is intended to be binding or non-binding;
- state what the rights of the respective parties are in the event that a formal agreement is not subsequently reached. In particular, care should be taken to ensure that the method of dealing with any dispute and the effects of termination are clearly set out;
- set out whether it is intended to constitute a contract under the Construction Act (and if it is not so intended, care should be taken that the wording does not unintentionally create such a contract); and
- set out any financial, time or other limits which apply to the work done by the contractor under the letter of intent.
We can assist you in making sure that your letters of intent create only the rights and obligations that you intend.
Contact Simon Nash for advice on any commercial property matter.
The Government has announced that it is extending the temporary provisions for first day marketing whereby a property can be put on the market without a Home Information Pack (HIP) provided one has been commissioned and paid for and is expected to be in place within 28 days.
Originally, the dispensation was to end for properties marketed after 31 May 2008 but the date has now been postponed to 31 December 2008.
The temporary dispensation that applies to leasehold properties, whereby the only compulsory document in the HIP is a copy of the lease, will also continue until the end of the year. This change has been made because the Government has instituted a new consultation process following industry complaints about the additional costs and delays being experienced when obtaining the documents necessary for inclusion in a HIP for a leasehold property. It is expected that the rules relating to the contents of HIPs for leaseholds may well change significantly between now and 31 December.
If you are buying, selling or letting a property, we can assist you to make sure the necessary legal work is carried out promptly, professionally and economically.
The advent of the civil partnership and the legal protection now provided to those who are the subject of such arrangement is in many ways a step in the right direction. It of course puts couples who have entered into a civil partnership on the same level as married couples as relates to the way the law protects their interest in assets accrued during their relationship on breakdown. The determination of issues involving civil partners on the breakdown of their relationship has left the arena of property law and entered the area of family law which in itself is more concerned with a fair settlement than brutal principles of property law.
However, what this highlights even further is the lack of protection given to co-habitees in heterosexual relationships and indeed property arrangements where families own property in joint names for a specific purpose. An example of this relates to the right to buy purchases of council properties in the 1980’s and 1990’s where large discounts were offered and it was fairly common place for parents to buy a property where they were previously the council tenants and required the assistance of a sibling or child to purchase the property to ultimately make the mortgage payments necessary and therefore the property actually being purchased in three names rather than the proposed two. In my experience of the breakdown of such relationships it is very rare that there is in place a trust deed or other document confirming what the actual common intention was at the time of the purchase of the property concerning future ownership.
Furthermore, as relates to the co-habitees especially in circumstances where one co-habitee is placing a far greater sum by way of deposit at the time of a purchase of a jointly owned property there is rarely the relevant document in place to protect future entitlement.
In both these types of arrangements and the law as it stands it is imperative that all and every step be taken at the time of purchase to protect and reflect future entitlement. A few hundred pounds spent on the appropriate document at the time of purchase can save many thousands of pounds in legal fees of contested litigation at a later date.
The advice of a solicitor skilled in such property law issues is important at an early stage and this is clearly an area where parties seeking advice and assistance prior to the breakdown of a relationship rather than post breakdown can benefit substantially.
The Employment Rights (Increase of Limits) Order 2007, which details the annual inflation-linked increase in limits on the amounts which can be awarded by employment tribunals, was made on 18 December 2007 and applies where the appropriate date falls on or after 1 February 2008.
The main increases in compensation limits are:
- the maximum compensatory award for unfair dismissal has increased from £60,600 to £63,000;
- the maximum amount for a week’s pay (for calculating basic award or redundancy payment) has increased from £310 to £330; and
- the limit on the amount of guarantee payment payable to an employee in respect of any day has increased from £19.60 to £20.40.
As there is no statutory cap on the amount a tribunal can award in discrimination cases, the Order does not cover them.
The full list of the increases can be found in the Schedule to the Order at http://www.opsi.gov.uk/si/si2007/uksi_20073570_en_2.
The general tribunal system in the UK is being reformed, under the Tribunals, Courts and Enforcement Act 2007. Since 1 December 2007, tribunal chairmen have been called ‘employment judges’ as this more accurately reflects the nature of their role.
Plans to update the conveyancing process in England and Wales have been ongoing since 1998, when preliminary proposals were set out in a report, compiled by the Law Commission and the Land Registry, entitled Land Registration for the Twenty-First Century. Consultation on how best to go about re-engineering the system has been extensive. The aim is to develop an electronic system of conveyancing that makes buying and selling easier for all those involved in the process.
The Land Registry’s e-conveyancing project, developed by IBM, is expected to go live some time this summer following the introduction of a public key infrastructure (PKI) system that uses cryptography to guarantee the authenticity of property transaction documents. The system is designed to allow authorised users to exchange information quickly, securely and reliably with each other and with the Land Registry. Documents will be encrypted and signed with a digital certificate. Documents will only be able to be produced or read by those in possession of a cryptographic token, username and password. Once up and running, the system should allow property and mortgage registrations to be completed instantly, funds to be transferred immediately, securely and reliably and it will enable accurate and up-to-date information on the progress of all linked conveyancing transactions to be accessed online.
For further information on the e-conveyancing system, see
There have been several cases before the courts in recent years which arose because a house or property was purchased in the name of one of an unmarried couple and then when the couple split up, the ‘non-owner’ claimed that they were entitled to an equitable share in the property concerned.
In general, where it can be demonstrated that a couple’s intention was to hold the property jointly, the courts will accept such claims. However, a recent case shows that not having the right sort of evidence of the intention can lead to what seems, on the face of it, to be a very unfair result.
Sharon James lived with Peter Thomas, who was an agricultural contractor. She worked in his business, but received no payment. All the income from the business went into an account in Mr Thomas’s name and all the couple’s expenses were paid from this account, including the mortgage on the cottage they shared. The property had been purchased by Mr Thomas before he and Ms James started living together. Ms James had carried out improvements to the cottage which had enhanced its value. A piece of adjoining land was also acquired in Mr Thomas’s sole name, payment for this being made in kind by work done by the couple.
The business was reconstituted as a partnership in 1999 and the bank account was made a joint account in 2002.
In 2004, after 15 years together, the couple separated and shortly after that the partnership was dissolved. Ms James claimed that she had a beneficial interest in the cottage, arguing that Mr Thomas had said she would be ‘well provided for’. Interestingly, the court heard evidence that when the subject of formal joint ownership of the property was raised, Mr Thomas had been evasive. This was taken to mean that he had no intention of parting with an equitable share in the property. The court also considered that Mr Thomas’s comment that Ms James would be well provided for was a general statement of a beneficial outcome, rather than a commitment to share ownership.
The court ruled that her claim failed, leaving her with only a share in the partnership assets on the dissolution of the business.
Cohabiting couples are often unaware that they do not have the same legal rights as married couples or civil partners and this case is proof of the wisdom of unmarried couples setting out in clear terms what their financial arrangements are to be. This is easily done by creating a ‘living together agreement’. Contact us if you need advice on protecting your financial position in the event of a break-up of your relationship.
The right of a tenant to buy his or her property (under the Leasehold Reform, Housing and Urban Development Act 1993) is now well known. The right, however, does not apply in all cases and one of the exceptions is that a landlord may refuse to sell a property if it is the landlord’s intention to redevelop the premises.
Recently, a tenant’s application to buy his flat, which was one of a block of 50 in a nine-storey building, was refused by the landlord on the grounds that he intended to redevelop the premises, in this case by making the flat into a ‘duplex’ including the flat below.
The relevant section of the Act allows the landlord to resist an application if the landlord intends to ‘redevelop any premises in which the tenant’s flat is contained’, but only in cases in which the construction works are carried out on a ‘substantial part of any premises in which the tenant’s flat is contained’.
At issue was what was actually meant by the phrase ‘any premises in which the flat is contained’. In the view of the landlord, it meant any definable part of the building which could be shown on a plan. The tenant, however, argued that ‘premises’ meant a recognisable part or area which contains the flat in question. In essence, this argument is that if a space is one which a visitor would recognise as constituting premises, then that space or area counts as premises for the purposes of the Act. If, on the other hand, a visitor would not recognise the ‘separateness’ of that space or area, it is not premises. The House of Lords agreed that this must be the test, since it could not have been the intention of Parliament to allow landlords to define what constitutes premises, in such circumstances, according to their own wishes.
In the case in point, the Lords considered that a visitor to the block of flats would consider the block as a whole to be the premises, not the tenant’s flat plus the flat below it. In this case, therefore, the landlord’s claim failed, since the premises as a whole were not subject to redevelopment plans.
Being injured in a road traffic accident whilst on holiday is a very unpleasant occurrence. Until recently, this has been made worse in many cases by the difficulties which can arise in seeking legal redress against the insurer of the responsible person.
Recently, the European Court of Justice has issued a ruling that will come as a relief to people who find themselves in this situation. The Court decided that a person who is injured abroad can bring a claim against the responsible person’s insurer in their home country – subject to certain conditions. The main condition is that the claimant and insurer must be domiciled in the European Economic Area. The right does not extend to claims against individuals, but would also apply to an injury sustained in the UK where the person who caused the injury is insured abroad.
The right to make a claim in the UK courts in such circumstances will make the whole process quicker and less expensive, which is to be welcomed.
If you are injured through the fault of someone else whilst on holiday abroad, contact us for advice.
One of the main problems with working out who is to blame when an accident occurs on a public road is that the legislation which governs roads requires the relevant authority to ‘maintain’ the highway, but not to take steps to make it safe to use as a road. For example, if there is a reverse camber or blind spot and the authority does nothing, then very probably it will not be regarded as having any legal responsibility for an accident resulting from the defect in the road, even if it fails to erect a warning sign.
On the other hand, if for example the authority allows the road to be covered with water or ice, it may well be liable if an accident occurs as a result. However, if the authority can demonstrate that it has taken reasonable steps to deal with the problem – e.g. by salting the roads in a proper and organised way in conditions likely to lead to the formation of ice – it can defend a claim made against it by a person injured as a result of skidding on the ice.
For any claim to be successful, the claimant must show that the road was in a condition which made it dangerous for traffic and that the danger was due to a failure to maintain the road. That in turn will depend on whether the failure is a transient failure or a longer-term failure indicative of a breach of the authority’s duty. If the latter, the authority will be liable unless it can demonstrate that it took reasonable care to ensure that the road was ‘reasonably passable for ordinary traffic without danger caused by its physical condition’. In practice, this will turn on the degree to which the authority can demonstrate that it operated well-considered and effective policies on road maintenance.
The message for road users is that it is their responsibility to assess the inherent risk in the road and behave accordingly. Only if an accident can be shown to be caused by the failure of the authority to discharge its duty to maintain the road will the authority be liable. The fact that the road may not be safe in the first instance is not the issue.
The vast majority of Home Owners who want to sell their property now need to obtain a HIP. However, there remains much confusion surrounding the HIP and Zoe Brind solicitor and consultant at Bird & Lovibond cuts through the controversy and offers this guide on HIPs.
- What are HIPS?
- A HIP is a collection of key documents required by law to be available to prospective buyers before a property can be advertised for sale. These documents are: an Energy Performance Certificate (EPC) which is prepared by an energy assessor who will attend the seller’s house and carry out an energy ‘survey’, local and water Authority searches, copy of the Sellers legal title, an Index of the HIP documents, a Sale Statement giving brief details of the property being sold and for leasehold properties only a copy of the lease and some management information.
- Why were HIPS introduced?
- The original idea was to speed up the buying and selling process on the assumption that providing this key information before, instead of after, a buyer made an offer on a property would reduce the number of failed transactions. Additionally, the provision of an EPC is a part of the drive to make everyone more energy efficient. However, HIPS have caused much controversy and many see them as hindering, not helping, the housing market. Some sellers feel that this is just another cost added to an already expensive process.
- What are the penalties for not providing a HIP?
- Whatever is thought of them, HIPS are now compulsory. The penalty for not providing a HIP is £200, which can be repeated and even result in a banning order.
- Which properties are exempt from requiring a HIP?
- These include non-residential properties, seasonal and holiday accommodation, mixed sales (eg. Shop with flat over). However, a HIP is only required if you are publicly marketing your property. If you have agreed to sell privately without public advertisement of any kind then a HIP is not required. Also, under temporary rules, properties that were on the market prior to the initial commencement dates of HIPS - 1 August 2007 (4 bed properties), 10 September 2007 (3 bed properties) and 14 December 2007 (1 and 2 bed properties) do not currently need a HIP.
- What is the Cost of the HIP?
- Perhaps surprisingly, this varies considerably between the different providers. To prepare a HIP the provider will as a minimum have to pay for the EPC, the Local and Water Authorites’ searches and the Land Registry title documents which cost around £250. So allowing for the HIP provider to make a charge for assembling the HIP we find the average cost currently seems to be in the region of £350-400.
The cost of the HIP is paid by the seller. Some HIP providers offer deferred payments (usually at an increased price) but this gives the seller the option to pay for the HIP after the property sale has completed but normally though up to a maximum of 10 months later even if there is no sale.
So why do costs vary? Many Solicitors such as Bird & Lovibond can supply a HIP direct themselves. Estate agents can arrange through solicitors but quite often use companies who seek to enhance their profit by linking in other related services.
Bearing in mind the minimum cost of HIP production, sellers should beware what may look like a deceptively good offer of a “free” or low cost HIP. It is very rare to receive something for nothing and in order to benefit from these offers you may have to use “tied in” services of the estate agent or HIP provider such as conveyancing. There can be positive disadvantages. The cost may be much more expensive than going direct to local solicitors so you may end up paying more for the HIP and conveyancing overall. You may also be tied in to a conveyancing firm which will not be local, depriving you of the easy convenience of meeting your solicitor face to face.
So ensure that you get a full breakdown of all the costs and other related issues involved before committing yourselves.
- Who owns the HIP?
- Usually you would expect the property seller who has paid. However, do check as under particular schemes some HIP providers or agents retain ownership so you will not be able to take the HIP to a new estate agent if you want to change.
Bird & Lovibond HIPS
We can prepare a HIP for any seller or agent at the inclusive cost of £275 for freehold or £295 (plus any landlord and managing agents fees) for leasehold properties. The HIP is provided electronically and one hard copy will be made available to the seller. This is the cost price of the HIP. Our Conveyancing costs are competitive and will not be increased to cover the cost of providing the HIP.
If you require any further information (including free estimate) in relation to HIPS and our Conveyancing services please contact:
24th January 2008.
Prices quoted are correct at this date.
A woman who was widowed mere hours after getting married has been ordered by the Court of Appeal to honour a promise her husband had made to his ex-wife.
Kathleen Soulsby married her husband Owen in 2000 at the London hospital where he was being treated for leukaemia. He had divorced his ex-wife, Elizabeth, in 1986 and they had agreed a settlement under which he was to pay her £12,000 a year plus maintenance for their children. In 1993, he agreed to give her £100,000 on his death in exchange for being relieved of the obligation to pay further maintenance payments. His will was altered to give effect to the agreement.
Under UK law, however, marriage invalidates any previous will and Kathleen argued that the bequest was therefore invalid.
The Court of Appeal considered that the agreement between Owen and Elizabeth was enforceable. She had ceased to receive maintenance in 1993 and had not pursued him for the payments. She had therefore complied with her part of the bargain and his estate was bound to honour his side of it.
Says Niamh Minihane, “It is often forgotten that marriage or civil partnership invalidates an earlier will. It may not be very romantic, but it is practical to make sure that after the ceremony a new will is executed as soon as is practicable.”
A recent House of Lords case has emphasised that when there is a break-up of a relationship and there is joint legal ownership of the house, the division of the value of the house will depend on what the couple’s intentions were. All of the relevant circumstances need to be taken into account. In the case in point, the fact that the couple maintained separate financial arrangements was germane to the decision.
But what is the case when the owners of the house are not a couple, for example where the property is owned jointly between family members of different generations? In one such case, a woman died and the property she lived in was owned jointly by her and her son. There had been no declaration of what proportion of the house each owned. Each had contributed equally to the household expenses and mortgage until the mother and son had quarrelled, at which time he moved out and the mother then met all of the mortgage payments herself. The son claimed a beneficial interest in the property and this was contested by the woman’s other beneficiaries.
The judge hearing the case considered that the purpose of buying the property was to provide a home for the mother, who could not obtain a mortgage on her own. Mother and son had kept their finances separate and the solicitor who acted for them on the purchase considered that there was no intention that the property should be beneficially jointly owned. Furthermore, the judge considered that the mother would not have wished to deprive her other children of a share in her property.
The court therefore ruled that the son had no beneficial interest in the property.
In another case, a divorced couple bought a property with a view to being reconciled. The property was put into the husband’s sole name. When the relationship failed again, he left and his ex-wife remained living in the house. The court ruled that because the husband had given his ex-wife assurances that she could remain in the property as long as she wished, it could not be sold by her ex-husband without her consent.
Says Tony Neocleous, “Houses are usually the major asset of a family. It is therefore advisable to make sure that any details regarding the ownership of, and people’s rights to, the family home are put down clearly in proper form when the property is acquired. This may save a great deal of expensive argument later.”
A judge who in her verdict in a child care case failed to give adequate reasons for departing from the clear evidence of experts recently found her decision overturned by the Court of Appeal.
The case dealt with the residency arrangements for four children whose parents were getting divorced. The mother of the children had a long history of addiction to amphetamines. At the custody hearing, evidence was given to the court that she had tested negative for use of amphetamines at the time of the hearing, but there was evidence of earlier use. The mother claimed that she had ceased to use drugs altogether.
A psychologist, a psychiatrist and a social worker submitted reports suggesting that a residence order should be made giving custody of the children to their father.
Surprisingly, the judge ordered that the children should reside with their mother on weekdays during the school term-time. The father appealed against the decision.
The Court of Appeal was of the view that the judge had placed a disproportionate amount of weight on the mother’s evidence and had not given a good reason for taking a decision which differed so sharply from the opinion of the experts. The Court ruled that the residence arrangements should be referred back to another judge to determine.
Says Michelle Everest, “It is not often that judges ignore clear expert evidence in such cases and, when they do, it is incumbent on them to give sufficient reasons for so doing. It is very important to use an expert who is good at presenting evidence clearly. We ensure that clients relying on experts for evidence use those who are well-qualified and experienced.”
The family of a motorcyclist who died as a result of an accident caused by diesel spilt on the road has won £110,000 in compensation from the Motor Insurers’ Bureau (MIB), an organisation set up for the purpose of compensating the victims of negligent uninsured and untraced motorists. It is believed to be the first claim of its kind in the UK.
Richard Cooper, 58, was travelling to a motorcycle rally when he hit a fuel slick on a B-road in Lincolnshire. He lost control of his motorbike and hit an oncoming transit van. He later died in hospital from his injuries.
To make a direct claim for compensation in such circumstances it is necessary to track down the person or company responsible for the spillage. However, this is not always possible. In this case, there was no way for Mr Cooper's family to find out who was responsible for the spilt diesel, so they submitted a claim to the MIB.
Figures from the Department for Transport show that motorcyclists are twice as likely to have a serious or fatal accident as a result of spilt fuel than they are because of ice on the roads.
It is not widely known that it is possible to receive compensation when the person responsible for an accident is uninsured or cannot be traced. For further information on the MIB, see http://www.mib.org.uk/Default.htm.
Following a Practice Directive handed down by the President of the Employment Tribunals, all age discrimination cases in England and Wales that relate to dismissal on the grounds of retirement arising under Regulation 30 of the Employment (Equality) Age Regulations 2006 (which provides for lawful retirement at or over age 65) are being stayed pending the ruling of the European Court of Justice on a challenge to the legality of UK retirement law made by the Heyday organisation. Heyday wants the legislation amended to give workers over 65 the same protection from discrimination as younger workers. The judgment is not expected until at least 2009.
The rules governing Home Information Packs (HIPs) require that estate agents in England and Wales who market homes for sale with HIPs must belong to an approved redress scheme for HIP-related complaints. The schemes allow consumers to pursue compensation claims against agents where a complaint is justified. The administrators of approved redress schemes are required to pass information regarding misconduct of estate agents to Trading Standards Officers and to the Office of Fair Trading (OFT). The OFT has the right to ban persons it deems to be unfit from acting as estate agents.
Two schemes already in operation have now been joined by another, known as the Property Adjudication for Consumers (PACS) scheme, which commenced on 1 December 2007. PACS differs from the existing schemes as it is run by an independent dispute resolution provider rather than an ‘industry ombudsman’. This may give an extra level of comfort to some complainants.
Properties on the Market Prior to HIPs
Currently, any property that was already on the market on the date that HIPs were introduced (1 August 2007 for properties with four or more bedrooms and 10 September 2007 for those with three or more bedrooms) does not require a HIP. At some stage, a date will be set when all qualifying properties on the market will need a HIP, regardless of when they were first marketed. However, the Government has yet to decide when this will be.