Commercial Leases – Why You Must Have A Solicitor On Board

By Tim Bishop | Published: February 22, 2012

If you run your business from commercial premises, your lease is probably one of the most important legal documents you have. It should therefore go without saying that you need specialist legal advice to ensure there are no problems between you and your landlord. In practice, you are most likely to consult a commercial property solicitor over your commercial lease at the following times;

Lease renewal

Renewing a lease is usually a signal to renegotiate terms, either directly with your landlord or through the courts. This may not necessarily work in your favour, so you should definitely talk to a solicitor at this point. A solicitor will also help you to minimise the risk of suddenly finding yourself without premises when the lease expires. As a business tenant, you are usually entitled to renew for a further term, or even to remain in the premises after the expiry date (“holding over”). However, a lease extension may not be guaranteed, so you need a specialist commercial property lawyer to make sure you’re not losing out unnecessarily.

Termination of the lease

Of course, there are times when you actively want to vacate the premises at the end of the lease, perhaps to move somewhere bigger. You can also surrender your lease before the expiry date, usually by paying the landlord a premium. In fact, ending a lease can be quite a costly business. If the premises aren’t left in exactly the condition set out in the lease, your landlord could serve you with a “schedule of dilapidations” and a hefty repair bill. Again, you need an experienced property solicitor on board to make sure you’re fully aware of your obligations and that you don’t pay over the odds when you terminate your lease.

Defaulting on lease terms

Whether it’s by accident or design, failure to comply with the terms of your lease can have serious consequences. Defaulting on your lease gives your landlord the right to cancel the lease and to take back possession of the premises, through a court order or by physically locking you out of the building. This would obviously be disastrous for your business. Good property solicitors will help you to avoid defaulting on your lease terms in the first place, and, if worse comes to worst, will be able to fight your corner to ensure that the landlord follows the correct procedure and to advise you on what countermeasures you need to take.

Your commercial lease is too important to leave to chance. Investing in specialist legal advice now can save you a lot of money in the future.

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Tenants in common and joint tenancy – what’s the difference?

By Tim Bishop | Published: February 21, 2012

The whole conveyancing process can be quite confusing, and the terminology doesn’t help. When buying leasehold property, you will come across the terms joint tenancy and tenants in common – but what’s the difference?

If you purchase property as joint tenants, it means that you are both joint owners of the property and as such are equally entitled to it. So, for example, if one of you dies then your interest in the property will pass automatically to the surviving owner – regardless of what your will says. So, for example, if you own a property jointly with your partner and one of you die – the other becomes sole owner of that property.

In contrast, tenants in common own the property in specific shares e.g. equal shares [ie 50/50] or unequal shares e.g. 70/30. With tenants in common, if you die, then your interest in the property does not automatically pass to the survivor – instead, it will be classified as part of your estate and as such will pass under the terms of your will [unless you didn't have a will, in which case the property will be transferred according to the intestacy rules].

If you own property as tenants in common in unequal shares, it’s absolutely essential that you get a declaration of trust drafted up by a specialist conveyancing solicitor – documenting the differing shares in your property owned by you both. If you are tenants in common, then regardless of whether you own the property in equal or unequal shares, make sure you both get a will – so that if one of you passes on – you can control to whom your share of your property passes.

For free initial phone advice contact our Solicitors in Salisbury 01722 422300 or Andover 01264 364433

o Contact our wills and probate solicitors – if you’re considering getting a new or up dated will

o contact our conveyancing solicitors – if you own property as tenants in common and need a declaration of trust

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How your solicitor can help you negotiate a commercial lease

By Tim Bishop | Published: February 20, 2012

Once you have found new premises for your business, you will need to negotiate the terms of the commercial lease with your landlord. This lease is a legal contract and failure to abide by its terms of your lease could lead to court action. It is therefore highly advisable that you employ a commercial property solicitor from the outset so that they can:

1. prepare the Heads of Terms which summarise the terms for a new lease agreed between you and your landlord which is used in the preparation of the lease

2. review and make any necessary amendments to the lease to ensure it does not contain any detrimental terms – the first draft of the lease is generally prepared by the landlord’s own property lawyers and is consequently weighted in their favour

The main terms you need to agree which your solicitor can negotiate on your behalf are:

Duration of the lease - rarely longer than 10 or 15 years typically (but not always), with a tenant break option from the beginning of year five. Speak to your property solicitors before agreeing to either as you may be able to save substantially on property taxes.

Rent (occupancy charge) – find out the average rent for similar properties in the area or speak to your solicitor. Most landlords expect tenants to pay rent three months in advance but you can ask them if you can pay monthly in advance. You should also ask your landlord if the rent will be VAT-able and make sure that you can reclaim it. If you want to make changes to the premises most landlords will agree to a rent-free period to compensate for this cost. The landlord will also require security either as a rent deposit or a personal guarantee (if the lease will be in a company name).

Service Charge - covers the cost of maintaining and repairing shared areas of the building such as visitor areas, driveways, landscaping, kitchen facilities, etc. if the premises form part of a larger building such as a shop in a retail outlet or office in a block. Ask the landlord for the average year’s service charge and how this is calculated and the last three years’ sets of service charge accounts so you can agree a cap on the amount.

Repairs and improvements of the premises – ask the landlord to carry out any immediate repairs before you take on the lease but establish who is paying for them. You may also need a surveyor to check out the condition of the premises.

Mechanical systems – make a careful note of any expensive mechanical systems in the premises and pass this to your solicitor because most landlords will want to assign responsibility for repairs, maintenance and replacement to their tenants.

Other costs

These include annual insurance costs for the premises, local authority commercial rates, property taxes on the lease and utility charges (electricity, telephone, gas, water, etc.).

Commercial Property is a highly complex area of the law and there are many other terms of the lease including restrictions on transfers of the tenants’ interest in the lease, sub-letting, use, alterations, signage, etc. Contact one of our specialist commercial property lawyers today on Salisbury [01722] 422300 or Andover [01264] 36443 3to ensure professional legal advice is sought from the outset.

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Employment law consultations the government plans in 2012

By Tim Bishop | Published: February 17, 2012

Every year, aims to introduce more and more new employment law regulations, whether prompted by London or Brussels. 2012 looks likely to prove no exception. So what consultation on yet further changes to UK employment law is the government planning in 2012?

1. Consultation on ‘Modern Workplaces’

The government completed its ‘consultation on modern workplaces’ and some of the proposals that might follow include:

• A new system of flexible parental leave with an 18 week period of maternity leave for mothers, followed by a 34 week period of parental leave that can be shared between both parents.

• An extension of the right to request flexible working to all employees with 26 weeks’ service rather than just those with children.

• Changes to the Working Time Regulations as a result of European cases about the interaction of annual leave and sick leave.

2. Further consultations likely to take place

Other consultations that the government has indicated are likely to take place this year include:

• ‘protected conversations’ to allow employers and employees to have frank discussions about issues such as performance that cannot be referred to or used as evidence in any subsequent employment tribunal claim proceedings brought by the employee.

• Proposals aimed at reducing the complexity of compromise agreements therefore making it easier for parties to settle disputes.

• The introduction of fees to be paid in order to issue claims in the employment tribunal and then a further fee to be paid to list the claim for a hearing date.

• A ‘rapid resolution scheme’ in order to resolve straightforward claims quickly and cheaply.

• A possible reduction in the minimum 90 day collective redundancy consultation period in large scale redundancies.

• A possible simplification of the TUPE regulations.

For specialist employment law advice you can really trust, please call one of our employment solicitors on Salisbury [01722] 422300 or Andover [01264] 364433.

 

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Picking a solicitor – going local or searching online

By Tim Bishop | Published: February 16, 2012

According to a recent survey by Contact Law – a national “find a lawyer” service, the most common legal issue for which they received enquiries in 2011 related to employment law – which alone accounted for almost 20% of requests for help made to them. Family law and divorce were, apparently, the second most common reason for enquiries, accounting for 16% of calls. In contrast, a mere 2% of received calls were related to making a will.

This is interesting, and to some extent backs up my personal theory about where clients go – both to look for a solicitor and how near to home they want their solicitor to be. I suspect that for relatively straightforward legal advice like drafting a simple will, people will, in general, turn to their local solicitor. Most competent law firms up and down the country can cope with simple wills and most people have a solicitor relatively local to them – which means they don’t really need to go online and use a solicitor at a distance to them or look for their solicitor via the Contact Law referral service. However I believe that the more specialist the services people seek, the more likely it is that they will go online to find the right legal advice. So, for example, our Lease Extension, Intellectual Property Lawyer, Professional Negligence Claim, Disqualified Directors and Hip Replacement Recall sites all produce an increasing number of enquiries nationwide – because they are all very specialist services which, to a greater or lesser degree, your local solicitor, particularly if you live in a rural area or in a small town, may not be familiar with.

So my advice – for straightforward matters like straightforward wills and residential conveyancing – go local. Equally for more complex legal issues like help with a potential company directors disqualification or lease extension advice, seek out a genuine specialist online.

Posted in Conveyancing, Employment law, Family law, Intellectual Property, Lease Extension, Professional negligence claims, Wills | Comments closed

Our lease extension team expands

By Tim Bishop | Published: February 15, 2012

Those of you who regularly plough through this legal blog, will be familiar with the fact that we specialise in leasehold extension work. In fact, our lease extension work has grown so quick of late, that we have just taken on a brand-new member of our expert team – a specialist lease extension solicitor, Sam Davies, who cut her teeth in the Brighton area and does nothing apart from lease extensions, right to manage and lease enfranchisement work.

I firmly believe that although there are areas where the amount of work available to high street solicitors will probably decline (such as residential conveyancing). There are plenty of opportunities for forward thinking solicitors to develop specialist niches – especially in growth areas. We see lease extension as very much one of those growth areas – given the fact that there are hundreds of thousands of long lease flats in England and Wales and the fact that every one of them is going to need some help in extending their lease at some stage, allied to the fact that lenders are increasingly tightening their lending criteria (whereas prerecession the many mortgage lenders were happy to lend on leasehold flats with, say, 50 years remaining on the lease – now those criteria are being steadily tightened and it is not unusual to find a minimum term of 70 is required]. One of the biggest challenges to growing the work, however, is education –surprisingly few tenants, mortgage brokers or estate agents are aware of the lease extension rights enjoyed by holders of residential long leases.

The amount of leasehold extensions we carry out has doubled in the last two or three years and it is our intention to double that again within the next three years – and at the same time becoming recognised regional and national leaders in helping people with extending a lease. Sam’s appointment is a critical part of that.

For more information, call our experts on 01722 422300 or visit our specialist Lease Extension UK website

 

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Your right to manage Company

By Tim Bishop | Published: February 13, 2012

A right to manage company is the company that will be responsible for managing the property once you have completed the process of exercising your rights to manage your block. They are also sometimes referred to as RTM companies for short. They largely act as any other company would, which means that it will need to be registered with Companies House and you will be responsible for submitting yearly returns. You will also have to keep comprehensive accounts and records of everything the company does to make sure it stays accountable.

You will need to appoint a board of directors – generally drawn from your pool of qualifying tenants – who will be responsible for overseeing the day to day management of the company, so it will definitely help if you have some participating tenants who are willing to take on this commitment. You will also have to draw up articles of association before you can register your company: this, along with every aspect of right to manage company formation,  is something our specialist right to manage and lease extension solicitors will be able to assist with.

It is important that right to manage companies holds regular board meetings in order to make sure that the management of your property is being carried out to an adequate standard. The company will also need to decide how the property will be managed: will the tenants take care of the maintenance themselves or will an outside company be hired to take care of things? The tenants involved will have a responsibility to make sure the company stays solvent so you will also have to have a fundraising strategy (such as raising money from the tenants in return for maintenance services) to keep the company afloat.

To find out how exercising your right to manage leasehold property could save you and your fellow tenants a whole heap of cash every year, contact one of our Right to Manage Solicitors today – or alternatively visit our specialist Right To Manage Company website.

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5 key IT Law considerations

By Tim Bishop | Published: February 12, 2012

IT law provides the legal framework for matters relating to computer contracts, the use of computers in businesses, e-commerce and associated areas. It governs the dissemination of both digitalised information and software, including security and electronic commerce aspects and has been deemed by some as ‘paper laws for a paperless environment’.

IT has revolutionalised businesses and it is now crucial that all employers, not just the IT department, keep abreast of legal requirements including data protection and health and safety. Key factors that every business needs to know:

• It is a legal requirement for all emails to contain the full name, registered number and registered office of the company that sent it

• Every employer should implement a computer usage policy for their staff

• If a freelance contractor writes a computer program for you this does not legally entitle you to the copyright of the program

• It is a criminal offence to use more than the number of copies of a software program for which you are licensed in your business

• Staff using computers are entitled to a free pair of glasses and an annual eye test from their employer

Contact our team of specialist IT solicitors today. We can advise on these and other IT issues and provide you with expert legal advice and assistance. Call our Solicitors on Salisbury [01722]422300 .

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Compromise Agreements – What You Need To Know

By Tim Bishop | Published: February 11, 2012

Compromise agreements have become increasingly prevalent in recent years, having been introduced into employment legislation back  in 1993. If you haven’t signed one yourself, you’re quite likely to know someone who has, even if they don’t talk about it (most agreements include a confidentiality clause). But what are they exactly, and how do they work?

Looked at from one perspective, a UK compromise agreement is a way for an employer to manage an employee out of the company without the expense, negative publicity and uncertainty of defending an employment tribunal claim. However, as the name suggests, the essence of the agreement is compromise, finding some common ground and working out a solution that meets both parties’ needs. The employee is allowed to leave with dignity and a clear employment record, and the employer knows exactly how much they have to pay out as a financial settlement.

Compromise agreements are legally binding contracts, setting out the exact conditions for a termination of employment. They are usually negotiated between both parties’ employment solicitors, and will take account of such things as statutory requirements, any conduct issues at work, and the terms of the existing employment contract. They are also legally enforceable, which means that neither party can go back on the agreement without risking penalties. For example, if the agreement states that all parties should keep details of the agreement confidential, then the employee could forfeit their financial settlement if they breach that confidentiality. If the breach is on the employer’s side, then they may find that the employee is entitled to make an employment tribunal compensation claim after all.

In order to be valid, the terms of the contract must be in writing, and the employee must have received independent professional advice from a lawyer or suitably qualified trade union representative before signing. A compromise agreement can work to everyone’s advantage, provided both sides are willing to negotiate and provided the best legal advice has been sought from specialist compromise agreement solicitors right at the beginning.

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Recruitment And The Law: How It Affects Small Businesses

By Tim Bishop | Published: February 10, 2012

Most small businesses hope to take on staff, sooner or later. Being in a position to recruit is a positive sign of growth. You’re no longer a “small” business – you’re an employer, bringing on staff who will become valuable assets to your business and help you to grow still further. On the downside, recruiting staff can become a legal nightmare for the unprepared and unwary – employment tribunal compensation for, for example, a discrimination or unfair dismissal claim can prove very expensive indeed.

So how does employment law affect small businesses hoping to take on staff? The first thing you need to consider is what type of staff you’re looking to recruit. This very much depends on what you want them for. If you’ve just landed a major contract or ongoing business, then you’ll need permanent staff. If you’re looking to meet seasonal demand, or need to provide cover for a position during holiday or maternity leave, then you’ll probably be looking for fixed-term contract or temporary workers. These different types of employee each have their own special legal requirements which it is your responsibility to meet.

Permanent workers need to be employed under a contract. This is open-ended, in the sense that it has no end-date, and can only be terminated by one or other of the parties serving notice. The contract is a written statement of all the terms and conditions of the post, and applies to both full-time and part-time positions.

Fixed-term employees, as the name implies, are brought on for a fixed length of time, or to work on a specific project. Their contract will naturally have an end-date (although they may be re-employed on a different contract, of course). Temporary workers tend to be employed by the agency who supplies them, but are still covered by employment law whilst they are in your charge.

Small businesses are most likely to need to legal help when it comes to drafting contracts and to understand the law governing terms and conditions. However, it’s important to remember that you have legal responsibilities right from the beginning of the recruitment process. For example, you need to make sure that your advertising and interviewing policies meet with equality and anti-discrimination legislation – or risk an eventually very expensive employment tribunal claim. As always, it’s vital that you don’t leave anything to chance, and seek professional legal advice from specialist employment solicitors if you’re in the slightest doubt.

For free initial phone advice about any aspect of employment law – call our team of employment lawyers today on [01722] 422300.

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