The Accidental Landlord

The Accidental Landlord
Stephen Eccles , our Litigation Partner, considers how a property owner can be caught by legislation relating to commercial property . ​ We have recently encountered a number of cases where a landlord has allowed a tenant into possession of commercial property in exchange for rent and has then been alleged to have created a 1954 Act Business Tenanc...
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Capital allowances Seminar - Monday 3 October

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You are invited to a seminar on Capital Allowances and Tax Planning for Landlords on Monday 3 October, in collaboration with The Bailey Group.
Pinney Talfourd are pleased to announce that Andrew Shepherd of The Bailey Group will be presenting a seminar at our Brentwood office in October. We would be delighted if you could join us.

Capital Allowances and Tax Planning for Landlords

An overview of how to make a successful claim for commercial property owners. How to mitigate the effect of proposed changes to buy-to-let Landlords tax relief. Andrew has worked with some of our clients already and has assisted them by finding huge tax savings.
 
Capital Allowances are a niche tax specialism and many general accountancy firms will not have the in-depth knowledge, expertise, or experience and frequently overlook a wide range of commercial property fixture and fitting detail that can be pooled to make an often sizeable legitimate claim for tax relief.
 
In addition to this niche service The Bailey Group are looking at new ways in which Landlords of residential property may hold their investment property to combat the proposed changes to mortgage interest relief.  Likewise, there are new but proven ways in which Landlords can arrange their affairs that reliably reduce income tax,  mitigate CGT and stamp duty, whilst at the same time significantly reducing inheritance tax, all insofar as the law and HMRC practice allow.
 

Monday 3rd October

Seminar and Q&As 5 - 6pm
Followed by drinks and networking 6 - 6.30pm

Pinney Talfourd, New North House, 78 Ongar Road, Brentwood, CM15 9BB

 

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Documenting a commercial tenancy

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How important is it to document a commercial tenancy? The simple answer to this question is "very!" Keeley Miller explains why.


All of the fundamental terms of a commercial tenancy are contained in the document itself, unlike residential tenancies which have a range of legislation to protect the rights and well being of the Tenant, commercial Tenants are deemed to be capable of looking after themselves and much less protection is implied for the Tenant.

Heads of Terms

All of the agreed terms should be documented right at the outset in the Heads of Terms, even if the parties are not using land agents or professional consultants to broker the deal. A lease can take several weeks to conclude and it is often necessary to refer back to heads of terms to remind the parties what was agreed at the negotiation stage.

The lease, once drafted and entered into, will deal with a range of issues such as how much rent is paid, when, to who, can the rent be increased, who insures, who repairs etc. The lease will also cover a range of more unusual circumstances such as what happens if the building burns down or there are issues with the condition of the building. If you ever ask a solicitor what happens if… in relation to a commercial lease the answer will invariably be, what does your lease say?

It is often the case that the parties are keen for the lease to be completed as soon as possible after heads of terms are agreed. I have completed a lease of part of an office building in one week but that was an exception and not the norm! It is imperative that Landlords do not allow eager Tenants into occupation until a lease has been completed, or if they do want to allow a Tenant into occupation early it is essential that they instruct their solicitor to prepare a Tenancy at Will or a Licence to Occupy which will bridge the gap between agreeing heads of terms and completing a formal lease.

Licence to Occupy

A Licence to Occupy is simply a permission granted by the Landlord to the eager Tenant and it records the extent of the Tenant's rights in relation to their use of the property. In the event the lease negotiations fail, the Landlord can simply withdraw their permission and bring the Tenants occupation to an end with the minimum of fuss.

If, in the same scenario, there was occupation by a Tenant without a written licence or a written Tenancy at Will, the Landlord may have real difficulty recovering the property quickly. Depending how the long the status quo is allowed to continue the Landlord may even inadvertently create a protected tenancy which allows the Tenant to stay in the property.

More information

It is in the interest of all parties to have the benefit of a considerate, negotiated and properly drafted agreement which removes all doubt in the event there is an issue in the future.

The Commercial Property team at Pinney Talfourd Solicitors can assist with all aspects of commercial leases. Please contact any member of my team on 01708 229 444 and we will be happy to help. Alternatively, click here to find out more about our commercial property services.
 

This article was written by Keeley MillerCommercial Property expert at Pinney Talfourd Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter.
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Landlords - at your tenant's service?

propertyspotlight
What should a landlord do if faced with a tenant not paying his or her service charges?

The landlord may well think that if the tenant is not prepared to pay then why should he or she receive the service? However, landlords are advised to think again if considering cutting off services to their tenants.

A recent High Court case, Winchester Park Ltd v Sehayak, decided that a landlord was not entitled to shut down a lift service in a building because the tenant had failed to pay his service charges.

The tenant was a leaseholder in a fairly upmarket block of flats. A dispute had arisen over the service charges and this had rumbled on for some time. The tenant was refusing to pay the service charges. The landlord thought it would be a great wheeze to “convince” the tenant to pay by shutting down the lifts which serviced the tenant’s flat. The landlord clearly believed that the prospect of climbing the stairs would be sufficient to persuade the tenant to pay.

However, the tenant had other ideas. So, eschewing the health benefits of the increased exercise he would receive from using the stairs, the tenant applied to Court for an injunction. The injunction was dealt with prior to the hearing because the landlord restored the service, but the Court still needed to decide whether the landlord was entitled to take that action in settling the issue of who paid the costs. The Court found against the landlord and determined that the landlord was wrong to stop providing the lift service.

The law in this area is complicated and even if your lease makes the provision of services conditional on payment of service charges by the tenant you may still be legally required to provide services even if the tenant doesn’t pay. It is important for landlords to seek legal advice before taking any step to cut off services to your tenant because you could end up with a significant costs order against you.


More information

The Dispute Resolution Team at Pinney Talfourd Solicitors in Essex can assist with all aspects of property litigation work. If you have any queries relating to a property litigation please contact any member of my team on 01708 229 444 and we will be happy to help. Alternatively, click here to find out more about our services.
 

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter.
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Brexit and the Property Market

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The EU referendum is fast approaching with the vote due to take place on 23rd June 2016. Julien Pritchard considers what potential effect the vote will have on the property market.
 
Unless you do actually live in a cave it is reasonably hard to avoid this topic at present with many arguments being put forward by both the remain and leave camps.

Before we get started please let me state categorically that this article is not a statement either in support or against the “Brexit”. I am afraid you will have to form your own opinions on that particular issue. However, I am willing to consider the potential effect of the vote on the property market.

The simple fact is that the property market in the UK likes one thing and that is stability. The reality is that whether we as a nation vote to remain or leave we are in a period of instability. Many large organisations have considered this issue in great detail. For example, a KPMG poll of 25 global real estate investors with assets under management of over $400bn has revealed that two thirds believe a Brexit would result in less inward investment into UK property and property companies.

The estate agency Savills has warned that the UK residential and commercial investment markets are “subdued”. The Royal Institution of Chartered Surveyors has voiced a similar opinion stating that the current vote could result in “a degree of uncertainty for buyers that may negatively affect some elements of the market”.

It is recognised that general elections tend to paralyse house sales and recent research from Hamptons International and Jefferies demonstrated that property transactions tend to slow ahead of a general election. There is no reason not to think that a vote on an issue as large as Brexit will have similar effect.

Whatever the outcome of the referendum we are entering a period of uncertainty and that cannot be good for the property market. If we do leave then that period of uncertainty may be extended, however, only time will ultimately tell what the long term implications are and whether any potential short term loss is offset by a future gain.


More information

The Commercial Property Team at Pinney Talfourd Solicitors in Essex can assist with all aspects of commercial property work including refinance, sales, purchases, lettings and licences for alteration, assignment etc. If you have any queries relating to a commercial property please contact any member of my team on 01708 229 444 and we will be happy to help. Alternatively, click here to find out more about our services.
 

This article was written by Julien Pritchard, Head of the Commercial Property Department at Pinney Talfourd Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter.
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2016 and the commercial property market

Julien-Pritchard
Head of Commercial Property, Julien Pritchard, provides a snapshot of what lies ahead for commercial property clients.


A look back at 2015

2015 was, by all accounts, a good year for commercial property with a good level of recovery in the rental market.

Unsurprisingly central London offices have led the upswing. However, several areas including Brighton, Bristol, Cambridge, Manchester, Leeds and Oxford have also seen a healthy increase in office rents. Industrial rents have also risen in many locations, fuelled in part by growing demand from online retailers and parcel couriers. Retail has not fared as well. Again London and popular tourist locations continue to perform but outside of those hotspots the retail world is still adjusting to a shift in consumer spending habits.

2016 looks positive for the commercial property market

There is a general feeling of optimism for the coming year. There is a consensus that UK GDP will grow by 2.25 to 2.5% through 2016 to 2017 and this can only be good for the markets. It is still far from simple to obtain finance on commercial development sites and with many sites being snapped up for residential development the supply of new commercial sites may decrease which should increase the demand/ rental costs for existing commercial units.

The mantra “location location location” is as true for commercial property as it is for the residential sector and the right space, in the right place with the right infrastructure and services should garner good returns for commercial property investors. Prudent landlords may well consider spending their hard earned money on refurbishing existing space to make it more attractive to tenants and securing a higher income per unit rather than investing in additional secondary or tertiary space.

Are you moving in 2016?

The Commercial Property Team at Pinney Talfourd Solicitors in Essex can assist with all aspects of commercial property work including refinance, sales, purchases, lettings and licences for alteration, assignment etc. If you have any queries relating to a commercial property please contact any member of my team on 01708 229 444 and we will be happy to help. Alternatively, click here to find out more about our services.
 


This article was written by Julien Pritchard, Head of the Commercial Property Department at Pinney Talfourd Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at January 2015.
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New Rules for Evicting Tenants

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For landlords in the private residential rental sector, having the right to regain control of your property when you need to is a vital power.

Section 21 of the Housing Act 1988 allows landlords to end an assured shorthold tenancy by serving notice, without having to show any fault on the part of the tenant.  Stephen Eccles, Head of Dispute Resolution law at Pinney Talfourd in Upminster, is our expert in landlord and tenant disputes. He outlines amendments to section 21 introduced from 1 October 2015 and warns of new traps for unwary landlords. 

WHAT ARE THE THE KEY CHANGES TO THE HOUSING ACT 1988?

The amendments to section 21 affect three key areas:

  • compliance;
  • the form of the notice; and
  • timing, specifically for serving the notice and starting possession proceedings.

There are also new rules requiring rent paid in advance to be repaid; and measures to stop landlords from evicting tenants who complain about the condition of the property. 


WHICH TENANCIES ARE AFFECTED?

Housing matters in Wales are now devolved, so these changes apply only to tenancies in England.  The new rules currently affect assured shorthold tenancies granted on or after 1 October 2015, but not ‘continuation’ tenancies that arise automatically if a tenant stays on after the initial fixed term ends.  Continuation tenancies will be affected from 1 October 2018.  Until then, landlords will need advice on what sort of assured shorthold tenancy they are dealing with before relying on section 21.   


COMPLIANCE

You cannot serve a section 21 notice unless you have given the tenant:

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