Archived News and Articles - 2008
April 2008
Families, Co-Habitation and Property Ownership . . . The Pitfalls
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.
For more information and assistance contact Tony Neocleous at our Uxbridge office or alternatively, Michelle Everest at Ruislip.
Annual Increase in Tribunal Awards
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.
E-Conveyancing on the Way
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
http://www.landregistry.gov.uk/e-conveyancing/.
Evasiveness Shows True Intentions
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.
Right to Buy – Common Sense Prevails in Definition of Premises
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.
Welcome News for People Injured Abroad
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.
Whose Fault is it Anyway?
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.
February/March 2008
The Truth about Home Information Packs (“HIPS”)
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:
- Uxbridge - Zoe Brind or Sarah Hatswell
- Greenford - Roz Allsop or Amandip Dhaliwal
- Ruislip - Anne Lee
24th January 2008.
Prices quoted are correct at this date.
A Promise is a Promise
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 Meacham, “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.”
Broken Homes – Split Houses
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.”
Child Custody – Expert Evidence Crucial
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.”
Family of Dead Motorcyclist Receives £110,000
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.
Age Discrimination Cases on Hold
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.
New HIPs Resolution Service
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.