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Legal Profession Comments on Applicability of Sharia Law

The Law Society of England and Wales has withdrawn a controversial Practice Note setting out official guidance for solicitors who have clients wishing to prepare a will that conforms with sharia law.  The Practice Note was published in March 2014 and was withdrawn only a few months later in November 2014 following protest from women’s rights and other secular groups. This provides a useful opportunity to consider the relevance of sharia law in England.What is sharia law?Sharia law is the Islamic system of law derived from the Holy Qu’ran and the teachings of the prophet Muhammed.  In those states where sharia law is recognised as the official law, it is applied and interpreted by Islamic judges and religious leaders.  Sharia law deals with many different facets of a person’s life, including the usual criminal, family, civil and property law, as well as “private” matters, such as prayer, hygiene and diet.The Practice Note The Law Society issued a practice note following numerous queries from practitioners as to how they should draft a will to take account of sharia law.  The practice note made it clear that a will could be drafted pursuant to sharia law, as long as it complied with the Wills Act 1837.  The practice note provided guidance for the drafting of a Sunni sharia will (as opposed to a Shia sharia interpretation of Islamic law).  How is a sharia will different from the traditional English will? Heirs are divided into “primary” (for example: fathers, wives, daughters, sisters) and “residual” (for example: sons and brothers). A testator can choose to give one third of his estate to parties who are not primary or residual heirs, such as charities.  The remaining two thirds is distributed among the primary and residual heirs; Non-muslims, adopted and illegitimate children cannot inherit; Any debts, including burial costs must be settled before the estate can be otherwise distributed.The ControversyA number of interest groups were concerned that the Law Society had produced a practice note that seemed to endorse a separate system of law from that of the law of England and Wales.  Further, sharia law is complex and differs between different states, as well as between Sunni and Shia.  Some would say that it is not for the Law Society to endorse a particular interpretation of the sharia law or to express an opinion about sharia law at all.Sharia law often has the effect of causing men to inherit substantially more than women.  Certain interest groups were unhappy that the Law Society was effectively endorsing a system of law the minimises the rights of women.  For a legal perspective, commentators have noted that the sharia succession rules are such that it is not possible to know exactly who will inherit, or how much they will inherit until the testator dies, which creates uncertainty.The withdrawal of the Law Society’s Practice Note does not affect your right to dispose of your assets in accordance with sharia law.  The most important thing is that your will complies with the Wills Act 1837.How is sharia law applied in England?Sharia law is not compulsorily applied in England.  However, it is possible to apply it in some circumstances: If both parties agree, the Muslim Arbitration Tribunal will apply sharia law (within the framework of the laws of England and Wales) to resolve a dispute without the need to attend a court.  The Tribunal’s decision is enforceable in higher courts pursuant to the Arbitration Act 1996. Islamic banks are permitted to offer sharia compliant mortgages (as charging interest does not comply with sharia law).  For example, a “Murabaha” plan, where the bank buys a property and immediately sells it to the “purchaser” for a profit.  The purchaser will make fixed payments to the bank on the higher “profit” price.If you would like to discuss how you might apply sharia law to your will or if you have any other questions about the application of sharia law in England and Wales, please contact San Chima (This email address is being protected from spambots. You need JavaScript enabled to view it.)
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Changes to Tier 1 (Investor) Visa Rules

Following a report from the Migration Advisory Committee earlier this year, a series of changes to the Tier 1 (Investor) regime came into force on 6 November 2014. Most significantly, the minimum required investment has increased from £1 million to £2 million. Further, the amendments contain several important changes to the rules regarding the nature of the investment, the requirement to ensure that the investment amount remains at the necessary level and the powers of caseworkers to investigate the origins of an investment. Any application lodged before 6 November 2014 will be processed using the previous regime.Investment AmountThe value of the investment required for entry to the UK using the Tier 1 Investor scheme has increased from £1 million to £2 million. This increase to the investment amount is thought to be long overdue, as the rules have not changed since 1994.ProportionPrior to these most recent changes, the investor could allocate 25% of the investment amount to assets based in the UK, such as a house or bank account. However, the investor must now invest all of the investment amount in active trading UK Companies or government bonds. An investor is no longer permitted to rely upon a loan in order to make up any part of the investment amount.ValueThe requirement that the investment must be “topped up” if it fell below the required threshold value has been removed. However, investors who sell part of their investment must replace the part that has been sold within “the reporting period”. As such, it would seem that the focus has shifted from the “value” of the investment to the “quantity” of the investment, although it is not entirely clear how this new provision might work in practice. It is hoped that further policy guidance will clarify the rules regarding partial sale of the investment. We will provide further comment about this in due course.The investment is intended to have the effect of fostering economic growth in the UK and it is hoped that the above changes will encourage investors to buy higher risk shares, rather than “safe” government bonds. The government intends to consult further regarding the type of investments that would best encourage economic growth within the UK.Additional PowersCaseworkers will have the power to investigate the source of an investor’s funds if they have reasonable grounds to suspect that the funds are not actually in the investor’s control, that the funds were unlawfully obtained (or would be considered so, had they been obtained in the UK), or that the party who is providing the funds is not of good character, such that approval of the application would not be in the public interest. As a result, an investor may need to provide more comprehensive evidence in relation to the history of the investment amount, in order to show how the funds were obtained.If you have any questions about the new Tier 1 (Investor) rules, please do not hesitate to contact San Chima to discuss how we can assist you with your application.
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Top 5 mistakes in leasing commercial property

Although experience as a residential tenant is something that many of us have, taking on a commercial lease can be somewhat different. Whilst the basic idea might be the same, there are different rights and responsibilities attributed to the tenant of a commercial property, which can make handling this type of lease quite difficult for anyone without experience. To ensure that you don’t waste time on unnecessary errors, here are the top five mistakes tenants make when leasing a commercial property:1. Not calculating the financial element properly. A commercial lease will usually have more financial demands than a residential one – including the requirement that the tenant pays for the insurance, as well as covering costs such as any service charges. Be smart and ask the landlord up front for a complete list of all the charges so that you know exactly how much is involved from the start.2. Not taking advice. Most professional organisations – such as the British Property Federation – emphasise the need for both landlords and tenants to take professional advice before entering into a new commercial lease. This will ensure that all parties completely understand the document they are signing, as well as making sure that there is nothing wrong with the essential documentation.3. Expect a rent review. Commercial landlords, like residential landlords, will want to periodically review the rent, however, many tenants make the mistake of assuming that rent will remain the same, particularly on a very long commercial lease. You can expect a rent review roughly every five years or so – if the lease is longer than five years – and any change in the rent should usually be based on what that rent would be worth on the open market.4. Seeing the landlord as the enemy. Cordial relations between a landlord and tenant can make all the difference to the overall experience. Common courtesies, such as keeping the landlord informed of any events that might hurt their interests, fulfilling proper notice periods in the lease, paying rent on time and raising any issues in a non-confrontational and reasonable manner are all key to making sure that the relationship continues to work on an ongoing basis – for both parties. Changes to the rent, insurance, building improvements or a planning application may all arise over the course of a tenancy and if these can be dealt with without conflict it makes everyone’s life easier.5. Assignment and subletting. Most leases will have provisions covering assignment and subletting, as these are the two ways in which a tenant can pass on its responsibilities to someone else. Assignment is where the rights under the lease are sold, given away or passed to another paid party, whilst subletting means a tenant remains a tenant but creates a sub version of the lease between themselves and a sub-tenant who will occupy the premises. In most cases, both subletting and assignment will require the landlord’s consent and some leases may prohibit subletting altogether. As a tenant it is important to check the lease for these provisions before you enter into any arrangements as you may be in breach of the lease if you don’t.Commercial tenancies are essential in business and it is not that difficult to avoid making any serious errors with yours. Bearing in mind the five situations listed above will ensure that you steer clear of making the most obvious mistakes.If you would like legal advice about any of these issues, or any other issues relating to commercial lease disputes, please contact San Chima at This email address is being protected from spambots. You need JavaScript enabled to view it.
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Top 5 considerations when drafting a partnership agreement

One of the most fundamental elements of a new venture is establishing the nature of the relationship between those who are involved, as well as their relationship to the business. This is why a partnership agreement is one of the most important documents in the startup process. Here are five key considerations to bear in mind when you are drafting or reviewing a partnership agreement.1. Avoid ambiguity. A lack of certainty is one of the main reasons that disputes can arise later down the line so ensuring that every aspect of an agreement is clear – and in writing – sets the business off on the right foot to begin with. A typed, signed, dated document that lays out all the key terms of agreement between the partners is essential if the relationship is to be clear and fruitful.2. State the capital contributions. To a certain extent the amount of cash that partners put into a business will have significant bearing on their relationship with that business – and to each other. So, it is important to clearly state the capital contributions i.e. how much each partner is investing to get the business off the ground. It’s also a good idea to set out where additional funds will come from in situations where the startup capital isn’t enough, as well as clarifying more complex relationships, for example if one partner is providing most of the funding whilst the other is doing most of the day to day work.3. Profits. This is a key issue for any business so a solid partnership agreement must cover how profits are to be dealt with. This should include when – and how – the partners can take money out of the business, whether a certain minimum must remain at all times, whether there are to be salaries paid and whether money already invested by one or other partners is to be repaid.4. Disputes and decision making. When beginning a business relationship most people tend to view that relationship in a positive light, assuming cooperation will come as standard and issues will be worked through. However, the reality is not always like that, which is why it is crucial to include both procedures for dispute resolution, and information on the steps that are to be taken to make decisions – the latter may well prevent the former being necessary. How will decisions be made, particularly where partners don’t agree but a conclusion must still be reached? And if events do lead to a dispute how should this be resolved – include here details of preferred avenues of mediation and alternative dispute resolution.5. Leaving the partnership. As with any relationship, no one wants to consider the end at the beginning. However, in business this is a necessary practical step. What is the exit strategy if the relationship begins to crumble? Is the partnership to be dissolved or continue with one less partner? Setting the exit strategy out right at the beginning lessens the potential for acrimony and disputes if things do fall apart at the end.A solid partnership agreement will underpin any business and is a crucial part of a good beginning. Incorporating these considerations will give any partnership agreement a sturdy basis.If you would like clarification on any of the issues raised above, please feel free to contact Salim Mansoor at This email address is being protected from spambots. You need JavaScript enabled to view it.
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Top 5 Tips For Landlords

Landlord and tenant should, in theory, be a fairly straightforward business relationship – the use of premises in return for monthly rent. However, there are numerous pitfalls that await landlords, particularly those who don’t have that much rental experience. Our landlord and tenant lawyers in East London have a great deal of experience in acting for a number of commercial landlords who have come to us for help to resolve disputes between them and their tenants. Here are five tips on how to avoid falling into the main pitfalls. 1. Take a professional approach from the start. Even if you are renting premises to someone you know, it is still a good idea to ensure that everything is clearly documented in writing. This will prevent disputes at a later stage and will ensure as far as possible the smooth running of the business relationship.  It is also recommended by the British Property Federation that professional advice is always taken when entering into a new relationship with a tenant – and that the tenant takes advice too – so that both parties know where they stand. 2. Make sure the tenant is in a position to pay the rent and costs before signing anything. Assessing a tenant’s ability to pay costs such as rent and service charges is an important part of the process and can prevent situations arising further down the line where there is unpaid rent or bills. Taking references is key here, from accountants, an old landlord, as well as any trade suppliers, and where the tenant is a limited company it’s a good idea to ask to see company accounts. A rent deposit of three to six months rent provides some coverage against loss if a tenant cannot pay, or damages the property and does not pay for the damage. However, if all the evidence points to the fact that the tenant may not be able to meet the costs then it may be preferable to find a different tenant. 3. Maintain the relationship. The British Property Federation puts great emphasis in its Code of Practice on the landlord and tenant dealing with eachother constructively, openly and honestly throughout the term. This includes promptly informing the other party if there are likely to be any difficulties fulfilling the lease and being considerate of actions that may have an impact on the other’s rights or business. 4. Insurance. It is usual for the tenant to pay the cost of insurance but either the tenant or the landlord can usually arrange the insurance (the lease should state who is responsible for this). Where a landlord is arranging the policy then terms should be competitive and if the tenant is a whole building tenant it is often also a good idea to allow them to influence the choice of policy if they want to. Whatever the situation, it is crucial that the terms of the chosen policy are made clear to the tenant from the start and where there is any material change to the terms this information also needs to be passed on. 5. Rent review. Most, if not all, commercial leases will contain a rent review clause that allows the rent to move – usually up. Changes to rent are a sensitive subject and it is generally preferable to link any increases in rental amounts to what is a market rent in order to ensure they are reasonable. Any rent review time limits, notice requirements, scheduled fixed increases, and the stated review periods should be noted and timetabled at the start of the lease to ensure steps are not missed that might invalidate a rent increase. Landlord and tenant relationships can be smooth sailing where attention is paid to the details. These five steps above will set you on the right road to ensuring that you fulfill your side of the contract and enjoy good ongoing tenant relationships. If you would like clarification on any of the issues raised above, please feel free to contact San Chima at This email address is being protected from spambots. You need JavaScript enabled to view it..  

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