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Landlords now required to check tenants’ immigration status

Last year the Immigration Act 2014 became law. Part of the legislation requires the owners of residential property to regularly check the immigration status of prospective tenants of the property, along with other occupiers. A failure to abide by this legislative requirement may result in a fine of up to £3,000.Under the legislation, a person may not occupy property pursuant to a residential tenancy agreement if they (i) are not a British citizen, (ii) are not a national of an EEA State, (iii) are not a national of Switzerland or (iv) do not have any right to rent in respect of the property. Further, a tenant has no right to rent a residential property if they require leave to remain in the UK and do not have such leave.All of this requires a landlord to check an existing tenant or a prospective tenant’s immigration paperwork/ documentation in order to assess whether he or she has the right to rent the property. Where there is uncertainty about whether there is such a right, a landlord will be able to make web or telephone queries. The relevant government department has said that they expect a turnaround time of 48 hours for emails sent to them.A landlord will have to review a tenant or prospective tenant’s documentation to determine whether they have a right to rent. Where it is not clear whether such right exists, landlords will be able to submit either a website or phone line enquiry. The email service will have a turnaround time of no longer than 48 hours. After this period, the landlord has the ability to let the property to the intended tenant. In essence this is much the same as existing employee checking type services.The main purpose of the legislation is to deter illegal migrants from obtaining occupation of private rented residential accommodation and encourage the observance of immigration laws. In economic and societal terms, lawmakers have in mind British communities affected detrimentally by unlawful building structures and overcrowding. The Home Office has also mooted that landlords may also enjoy the benefit from less loss of rental income because of the higher standards required.On the other hand, it is evident that there will be an additional administrative and bureaucratic burden on residential landlords. Some commentators have queried why responsibility for compliance with immigration legislation should sit with property owners. At an economic level, it may cause landlords to prefer a British tenant over a non-British one. One could argue that it would be very tempting for the landlord to prefer the former where the potential administrative burden associated with the latter’s immigration status is the only point of difference. Conversely, it may lead to migrants proposing that they pay a higher rent to address this. In both cases, there is potential for unfairness, and potentially even unlawful discrimination.Either way, the legislation has been passed and it is likely to be implemented some time in 2015, most likely after the General Election.If you have any questions about any of these issues, please contact Head of Immigration, Sanjeev Bakhshi at This email address is being protected from spambots. You need JavaScript enabled to view it..
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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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