On 14th December 2011 the Law Commission published their report on matters of ‘intestacy’. Intestacy is where a person does not leave a valid will upon their death. The report entitled ‘Intestacy and Family Provision Claims on Death’ addresses problems left on a person’s death where they have not left a will, and the changing nature of the traditional family unit. The current position has been criticised as unfair to unmarried couples, and this report outlines recommendations that address these.

The ideal position would be that upon death, a will clearly outlines how a deceased’s assets are to be distributed (probate). However this is not always the case. Problems with the will may make it invalid, or the will may not cover certain property if, for example, it was acquired after the will was drafted. Where a will is not left, the law must step in to decide how to distribute a person’s assets between survivors.

The report examines the law as it currently stands and concludes that much of it is outdated and confusing. In accordance with the aims of the Law Commission, their proposals are intended to simplify, codify and clarify the law in this area.

Their report makes a number of recommendations, including:

1. Where a deceased is survived by a spouse solely, their spouse should inherit the deceased’s property.
2. Where a deceased is survived by a spouse and others, their spouse should receive half of the value of the estate outright.
3. Previously, a child of the deceased could only make a claim under family provisions if the deceased was married or in a civil partnership. The Law Commission has recommended this limitation be removed, allowing the deceased’s child to make a claim whether or not their parents was married or in a civil partnership.
4. Where a couple live together without getting married or forming a civil partnership, the survivor under the current rules does not inherit any part of the estate. As the idea of a traditional family unit has changed, the law needs to reflect the changing nature of society. The Law Commission recommends that in certain circumstances a cohabiting partner should be entitled to inherit property. They recommend that cohabiting partners who have been together for five years should benefit, or two years if they have a child.

These changes to the law bring it into line with public conceptions and other commonwealth jurisdictions. It also provides greater security to the approximately 2 million cohabiting couples within the UK.

Although these reforms have been published in a report by the Law Commission they do not have to be accepted by parliament and become law. Two draft bills have been published to implement these reforms, but until these are passed the current rules still apply.

The safest option to protect your survivors upon death is to have a will. If you have any questions over the contents of this article or your will please contact our probate department on 020 7790 2000 or email Richard Dale directly at rdale@adamslaw.co.uk.

~ Richard Padley

The UKBA are now publishing the names of company owners, and the details of their companies, in instances where there has been illegal working found.

Reports will be quarterly. Here is the first one for our area, it’s short but it shows the gravity of what is to come for business owners…

UKBA Report

– Jill Gray

» Read more…

One common misconception about residential purchases is that the obligation to disclose full information about the property lies with the seller. However this is not the case. It is the buyer’s obligation to undertake the appropriate searches into the property to ensure that they know what they are buying.

From a structural perspective, if having brought the property you discover that the walls were not correctly built or that there are problems with the foundations, any loss in the value of the property or reinstatement amounts cannot be reclaimed from the seller. To lawyers, this type of loss amounts to ‘pure economic loss’ which has been ruled as not reclaimable. If you are purchasing a property with the assistance of a mortgage, lenders will undertake structural searches on the property to ensure that their interest in the property is protected. For many this will be satisfactory, however should you wish to undertake further independent searches, local surveyors’ details can be found on the internet.

However the structural soundness of the property is not the only search that should be undertaken on a property. The most common searches undertaken are outlined below. The outcomes of these searches may go as far as changing your decision to purchase the property.

A chancel search looks at whether the property is in an area that is subject to old chancel laws. These allow the local church to reclaim amounts spent on the upkeep of the church from property owners in the local area. Although it is rare for the church to demand such sums, it is not unheard of. If you find that the property is within an area where this may happen, insurance can be taken out to cover this risk.

A drainage search may also be undertaken. This search uncovers whether the property is at risk from flooding and also considers drainage and sewer works around the area.

The environmental search considers the suitability of the ground and the local environment. This uncovers whether the land that the property is built on is at risk of contamination. It may be that the property has been built on land that was previously used for industry. This may potentially risk contamination of the land from released chemicals. Whether this is the position will be uncovered in this search.

A plan search provides information about the local area. This includes, as well as other information, distance from schools and crime rates. Although not essential to the conveyancing process, the information contained in this report should be of interest to any future resident.

Arguably the most important search is the local authority search. This search outlines the relationship between the property and the local authority. As well as outlining which local authority the property falls under, the search outlines the planning history of the property and applications for planning permission. It is important that the correct planning applications have been approved and your solicitor will make enquiries of the seller’s solicitor should anything be missing. It is important that you inform your solicitor if you believe any work has been done on the property so that they can check the appropriate authorisations have been achieved.

If you have any questions about conveyancing please contact our conveyancing partner Ruhel Alom on 020 7790 2000 or email him directly on ralom@adamslaw.co.uk

  ~ Richard Padley

As economic circumstances continue to deteriorate, it may become tempting for employers to hire the cheapest labour possible without considering any other factors. However it is imperative that an employer knows whether the person they are proposing to employ has the legal right to work in the UK. Failing to make these checks can have very serious consequences for you as an employer as well as the employee.

For the employee the consequences of working illegal are obvious. The UKBA is likely to arrest the individual and take steps to remove them from the country.

For the employer, the Immigration, Asylum and Nationality Act 2006 introduced civil and criminal consequences for using illegal workers. Section 15 of the Act provides civil penalties for employing an illegal worker. The fine for employing an illegal migrant can be up to £10,000 per worker. In determining the level of fine the UKBA will consider what checks have been undertaken by the employer and whether warnings have previously been given.

Additionally, it is also a criminal offence to knowingly employ illegal workers under section 21 of the same Act. This offence will be used where the matter is more serious, such as where illegal workers are used for personal gain. Upon conviction an employer may face a custodial sentence, an unlimited fine, or both. 

An employer can avoid a civil penalty by undertaking the relevant checks on an employee’s eligibility to work before the commencement of their employment. You will be required to see original documents proving an entitlement to work. Additionally, if a person has a time limit on their stay in the UK you will also be required to carry out repeat checks on the employee(s) (at least yearly) to establish they have a continued right to work. 

The UKBA has provided extensive guidance on preventing illegal migrants from working. This can be found here.

If you have any concerns on this matter or have any questions about immigration, please contact Jill Gray on 020 7790 2000 or email her directly at jill@adamslaw.co.uk   

 ~ Richard Padley

A restrictive covenant is a restriction on a property not to act in a certain way in respect of the land. Common examples of restrictive covenants include:

• not causing a nuisance to your neighbours,
• not carry out any development work, or
• not to use the land for business or trade.

Before the use of planning regulations and legislation to restrict how property was used/maintained, restrictive covenants were the primary function of controlling land owners and developers. Even today, restrictive covenants are an important and effective way of managing land use.

Planning needs change over time, but a restrictive covenant can often impede such development. Fortunately, section 84 of the Law of Property Act 1925 allows for challenges to be made to restrictive covenants.

The nature of restrictive covenants means that their effect passes with the land, rather than being a private agreement between individual landowners. Consequently even if the land is sold, the restrictive covenant continues to be in force. Unfortunately sometimes the restrictive covenant becomes detrimental and prevents socially desirable developments.

Section 84 allows for the Lands Tribunal to modify or discharge a restrictive covenant. An order of this kind can be made in four circumstances:

1. Where the restrictive covenant becomes obsolete;
2. Where the continued enforcement of the covenant would be obstructive to some public or private use of the land, and that the covenant confers no practical benefit or is contrary to the public interest and any loss is adequately compensated financially;
3. With consent of all persons entitled to the benefit of the restrictive covenant;
4. The discharge or modification to the restrictive covenant would confer no injury on the person entitled to the benefit.

In coming to a decision on whether to modify or discharge a restrictive covenant the Lands Tribunal will consider not only the views of those set to burden from the covenant, but also the Local Authority development plan. This allows the tribunal to gain a view of the broad context and direction of local planning policy, and whether the modification or discharge of the restriction would be in line with this policy direction.

If you have any questions about restrictive covenants or their effect please contact Ruhel Alom on 020 7790 2000 or email him directly on ralom@adamslaw.co.uk

~ Richard Padley

If you are unfortunate enough to have been involved in an accident and are thinking of discussing this with a solicitor, it is important that you do not wait around. The reason for this is the effect that the Limitation Act 1980 may have on your claim. All lawyers should be aware of this piece of legislation, as a failure to act within its requirements can often be the basis of a professional negligence claim. Unfortunately if the Limitation Act becomes an issue, it is very often (but not always) too late to do anything about it.

The Limitation Act provides deadlines for when claims can be brought. The reason for this is to prevent claims being brought for matters that occurred many years ago. As well as providing fairness for parties on the end of a potential claim that occurred many years ago, it takes into account the fact that evidence may have deteriorated and, as a result, it may not be possible to adequately present a defence.

In the case of personal injury matters, the limitation period is 3 years. If a case is brought outside the three year period this does not amount to a defence, but instead is a matter of jurisdiction. A court has no jurisdiction to hear a claim that is brought outside of the time limitation period. However, for limitation to become an issue, it must be raised by the parties.

The point of contention is often the date at which the limitation period begins. Very often this will simply be the date of the accident (the ‘accrual of the cause of action’) that is the subject of the claim. However it can be more complicated than this, and a broad range of case law has developed around this subject. The limitation period begins when three things are present. These are:

1. The Claimant is aware that the potential for a claim exists, i.e. an accident has occurred; and
2. The Claimant sustains an injury. This may not be the same time as the accident occurred, as some injuries do not manifest until years later (such as mesothelioma); and
3. The Claimant is aware that the accident is attributable to the Respondent and their conduct.

When these factors are present the limitation period begins. The limitation period stops when the claim form is issued.

Personal Injury cases are somewhat unusual insofar as in PI matters, the court has discretion to disapply the limitation period under section 33 Limitation Act 1980 if proceedings are issued out of time. In deciding whether to disapply the limitation provisions, the court must consider all the circumstances of the case as well as a list of set factors such as at what point the defendant was notified of the claim and if that in itself has prejudiced the defendant’s ability to defend the claim, the length and reasons for the delay, the effect of the delay on any evidence and the conduct of the parties, among others.

If you have suffered an accident and want to take legal advice in respect of this, contact our litigation team on 020 7790 2000 or email Jonathan directly at jfinebaum@adamslaw.co.uk     

~ Richard Padley

Changes in Britain’s housing market and economy have made it more difficult than ever to purchase a property. People are now renting for longer, with the average age of the first time buyer rising. Landlords may seek to take advantage of this, by renting out individual rooms as opposed to a property as a whole. This may have financial benefits, but they should be aware of planning laws and regulations that they are required to follow if they should choose this course of action.

The Town and Country Planning (Use Classes) (Amendment) (England) Order 2010 introduced a requirement to apply for planning permission to change the use between Class 3 and Class 4 properties. A standard dwelling house consists of a ‘Class 3’ use property. However, where a property houses between 3 and 6 unrelated residents it is no longer classified as a standard dwelling house, but instead a small house of multiple occupancy (‘HMO’). This does not fall under Class 3 use, but instead Class 4 use. Consequently an application to the local authority would be required to change the planning use from Class 3 to Class 4. No application is required to change from Class 4 to Class 3.

HMOs are considered potentially damaging to the “community feel” of a local area. With HMOs often being occupied by short-term tenants with little stake in the local community, it is considered undesirable to have large numbers of HMOs in a particular area.

2010’s new coalition government led to a change of direction and policy and a review of the legislation. A ministerial announcement stated that local authorities would have discretion whether to implement the order to deal with local need. This government’s concern was the order might reduce the amount of rented accommodation available in an increasingly difficult market.

It is important that if you are thinking of changing occupancy to your properties you contact your Local Authority to clarify whether you are required to submit a change of use planning application. If you have any questions about this please contact Ruhel Alom on 020 7790 2000 or email him directly on ralom@adamslaw.co.uk.

~ Richard Padley

Joint bank accounts are an ever-popular means of holding money between a number of people, where the money is to be used for a common purpose. Typically a joint bank account will be taken out by two people in a relationship for paying bills, rent, mortgage etc. Money will generally be paid into the account from a number of sources. Yet this is not always the case. Money may be paid in solely by one party, or the contribution of one may be greater than the contribution of the other. In these circumstances, things can begin to get complicated upon the death of one of the account holders.

This was the case in Re Northall (Deceased) [2010] EWHC 1448 (Ch), a High Court decision passed down in 2010. Mrs Northall opened a joint bank account with her son, Christopher. Into this account were paid the proceeds of the sale of Mrs Northall’s house. The house was owned by her and not her son and therefore the proceeds entirely belonged to Mrs Northall. Further payments were made into the account, and withdrawals were made by Mrs Northall’s son – in the proceedings that later arose a small amount of the withdrawals were found to have been made on her instruction. Upon her death the outstanding balance in the account was transferred from the joint account and into her son’s sole account.

Mrs Northall’s son argued that he was entitled to the funds under the rule of survivorship. This default rule provides that where property is jointly owned, upon the death of one owner the remaining amount transfers automatically to the surviving owner.

The court held that where one person puts money into joint names there is a presumption that the legal ownership remains with the person providing the funds. Consequently, unlike the rule of survivorship, the property in a joint account is not jointly owned. In this case as the source of the funds came solely from Mrs Northall, the presumption was that legal ownership remained with Mrs Northall, despite the funds been deposited into a joint account. This presumption could be overturned if there is clear evidence that the account holder providing the funds intended that the other account holder was to obtain a legal interest in the property.

What we can draw from this is the need for those who hold money in, or are to open, a joint account to have considered what is to happen to the money contributed to the joint account on the death of one of the account holder’s; and that the decision they then reach is recorded – whether that be in their bank records, or on file with the solicitors who hold their Will, or otherwise. Holding a joint account is a convenient way to manage joint finances and to simplify the transfer of funds to a chosen beneficiary on death. However, the reasons for holding the joint account and what is to happen on death do need to be considered and recorded in some way with a view to avoiding the prospect of unnecessary argument, litigation, costs and the distress that can be caused.

If you have any questions about the contents of this article please contact our probate department on 020 7790 2000, or contact Richard Dale directly on rdale@adamslaw.co.uk.

~ Richard Padley

Right of first refusal under Part 1 Landlord and Tenant Act 1987  – sale of freehold title to leaseholders

To quote a popular children’s film: “ogres are like onions – they have layers”. It’s not just ogres that have layers, but also the legal hierarchy of ownership of property. Common terms that any property owner will come across are freeholder and leaseholder. The freeholder is the ultimate owner that holds the property forever. The leaseholder is the legal owner below the freeholder in the hierarchy and owns the property under a lease (a legal title granted by the freeholder) for a specific period of time. Under a single freehold title there can be several leaseholders, most commonly when a building is converted into several flats. However if the freeholder choose to sell their freehold title, it is not as simple as just putting the freehold property on the market and accepting whichever offer they choose. This blog outlines what considerations a freeholder should have in mind should they choose to sell their legal title, and what steps they should ensure they have taken.

The Landlord and Tenant Act 1987 provides leaseholders with the right to first refusal in the event that the freeholder decides to sell their title. This means that if the freeholder chooses to sell, they must first offer the leaseholders the opportunity to purchase the property. Failing to do so amounts to a criminal offence.

The freeholder is required to serve a notice on at least 90% of the leaseholders, outlining their intention to sell the freehold title. The exact contents of the notice varies depending on how they intend to sell the freehold, e.g. on the open market, by auction. The notice should contain the price at which the freeholder is seeking to sell their title. It is the freeholder’s right to set the price at which they intend to sell, but after offering at a set price the freeholder cannot sell at a lower price within 12 months (unless they have reissued the notice). There is no right to challenge the price set at the Leasehold Valuation Tribunal.

The offer must stay open for at least two months, and this should be included in the notice. If the leaseholders wish to purchase the freehold title they should write a formal acceptance notification to the freeholder. It is important that this is received by the freeholder within the offer period, otherwise the freeholder can offer the sale of the legal title on the open market.

Failure to offer a right of first refusal to the leaseholders can lead to a criminal prosecution with the potential for a fine of up to £5,000. Failure to do so will also allow the leaseholder the right to purchase the freehold title from the new freeholder at the price they brought it off the previous freeholder.

If you have been made an offer of first refusal or are looking to sell your freehold title and need advice on what obligations you owe, contact our conveyancing Partner Ruhel Alom on 020 7790 2000 or email him directly on ralom@adamslaw.co.uk.

~ Richard Padley