The current outbreak has caused substantial problems for businesses in terms of how they carry on trading. Depending upon the sector in which they operate there have been a variety of announcements regarding Government support. For example, the Government has announced cash grants for the retail, hospitality and leisure sector. Under this scheme there are cash grants of up to £25,000 per property.

Under the Small Business Grant Fund (SBGF) all businesses in England in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief (RRR) in the business rates system will be eligible for a payment of £10,000.

For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

Properties covered include properties being used primarily as shops, restaurants, cafes, drinking establishments, cinemas, live music venues, for assembly and leisure and as hotels, guest and boarding premises and self-catering accommodation.

The Government has also announced that there will be an ‘Expanded Retail Discount’ business rates scheme which will provide a 100% discount for the year 2020/21 for eligible properties. Businesses need to take no action and Local Authorities will send a revised bill but if you consider yourself eligible for this relief, and have not heard from your Local Authority, you should contact them. This scheme applies to the majority of properties that have had to close as a result of the current outbreak.

Coronavirus Act 2020, Section 82

This act has some components that will be of interest to tenants.

(1) A right of re-entry or forfeiture, under a relevant business tenancy, for non-payment of rent may not be enforced, by action or otherwise, during the relevant period.

(2) During the relevant period, no conduct by or on behalf of a landlord, other than giving an express waiver in writing, is to be regarded as waiving a right of re-entry or forfeiture, under a relevant business tenancy, for non-payment of rent.

In effect the government has announced that commercial tenants who are unable to make rent payments as a result of the coronavirus outbreak will be protected from eviction. This protection will cover England, Wales and Northern Ireland and last until 30th June, with an option for the government to extend this period if needed.

Suspension clauses in leases and lease renewals

Some commercial leases allow tenants the option to seek a suspension of rent payments. Not all leases are the same and the clauses dealing with any suspension and the circumstances surrounding these vary.

For other businesses their current lease may be coming to an end, or indeed business owners may feel that they have to seek a change to the existing agreement.

Many landlords will be willing to reconsider the terms of a lease or be helpful in agreeing new provisions in any new lease. Business owners however, need to take considerable care when agreeing to revised or new terms in a commercial lease and they should always seek legal advice.

Any business owners looking to vary or renew their lease can benefit from support from one of property specialists for an initial fixed fee discussion of £250.

For more information contact Hiromi Kuda. E: info@rrpassociates.co.uk

or T:084586 08775

The post Commercial Leases and COVID-19 appeared first on RRP Associates.

Those that rent will know that on top of monthly rent other costs can be incurred when entering into a new tenancy agreement. Lettings Agents, until recently, could charge additional fees for carrying out credit references and inventory checks as well as administrative costs. Depending on the location of the property the fees could range from a few hundred pounds to a several thousand pounds.

In response to the growth of the rental market the Government has, in what may be a potential blow to Landlords, passed the Tenant Fees Act 2019. From 1st June 2019 Letting Agents will only be allowed to charge, for additional fees, for a limited amount of items to include:-

1.       Refundable Deposit – this can be between 5-6 weeks rent depending on the value of the annual rent;

2.       Refundable Holding Deposit – this  reserves property and ‘takes it off the market’ and is capped at one week’s rent; and/or

3.       Utilities and Council Tax – if included as an amount paid in the tenancy agreement.

This is not an exhaustive list and Letting Agents may also charge for a tenant’s request to change or terminate the tenancy agreement early.

The new legislation, which applies to assured shorthold tenancies, licences and student lettings will undoubtedly helps renters by removing some of the excessive up front costs associated with renting.  Before this the only major change to benefit Tenants was the introduction of the Deposit Protection Scheme in 2007 which requires the Landlord or Letting Agent to hold the tenant’s deposit in a protected scheme for the duration of the tenancy. The scheme governs the way in which the deposit is held and released at the end of the term, removing the power of the Landlord to withhold the deposit unreasonably.

The Act is welcomed but will it address the imbalance between the Tenant and the Landlord? The changes, on the face of it, protect private tenants from unexpected and unfair fees. However, with Letting Agents set to lose a proportion of their income they may decide that in order to cover those losses they need to charge Landlords more. In turn, Landlords may be forced to increase rents.

Gemma Gurney, a paralegal in the Commercial Property Team at RRP Associates LLP says “whilst the Act shows the Government’s desire to provide tenants with a further layer of protection, we cannot ignore the fact that these additional fees now have to be borne by the Landlords, who may in turn increase the monthly rent on the property to make up the shortfall”.

If you are a Tenant or Landlord and need advice on the new legislation or any other tenancy related matter please contact Gemma on 01582 870898.

The post The Tenant Fees Act 2019 appeared first on RRP Associates.

A solicitor that can accommodate you outside of 9-5, Monday – Friday?

Our London Office will be open on Saturday mornings from 10am-12pm for personal attendances or prearranged appointments so if you need to pop something in to us please feel free to come over.

Our office is situated on the Churchill Place, London, E14 5EU.

Please note that only our London Office will be open on a Saturday morning

The post SATURDAY MORNINGS ARE COMING TO ARBAAZS appeared first on RRP Associates.

Bidding

Clearly when bidding at auction you need to have come prepared knowing how far your finances will stretch thus setting a budget is pivotal to having a successful auction bid, do not be tempted to over- bid. Often eager bidders will jump in early-on in the bidding process, which actually means they are increasing the price often against themselves.  Tactically, it is much better to wait until you feel all bids, in the room and on the internet/phone, have been put in before making a last minute bid – but only if the price is right for you, this tactic does not guarantee you will be successful but stands a much better chance of getting the property within your budget.

There are two main types of auctions:-

Traditional Auctions

These are the most common type of auction, once you have placed a bid, and the gavel has gone down, you have exchanged contracts making the 10% deposit payable and fixing the completion date, usually 28 days from the date of the auction. If for any reason you later decide not proceed to completion, you will be in breach of contract, and will lose the deposit and potentially open yourself up to being sued for any of the seller’s directly attributable losses. There can be many reasons for withdrawing, it could be you do not have sufficient funds in place in time for completion or perhaps you have not taken early legal advice prior to the auction and have missed vital characteristics about the property which impact its value. We would always advise it is sensible to instruct a reputable solicitor experienced in dealing with auctions to check the auction legal pack and that you should get your finances in-line prior to going to the auction.

Modern Auctions/Online Auctions

These auctions are becoming more common as they are convenient and there is less risk of out bidding yourself or failing to get vital legal advice. The Property is advertised for sale with a legal pack containing all of the important legal paperwork, you bid usually online for the Property, and if successful you would pay a non refundable reservation fee.  These fees can be substantial and are usually around 1% of the purchase price. This type of auction gives the buyer more time to complete as following the auction you will have 28 days to exchange contracts (when the sale becomes legally binding), and

usually a further 28 days until completion. If following the auction you decide to withdraw before the contracts are exchanged, you will lose your reservation fee but will not be held liable for a breach of contract and therefore will not be liable for any other losses incurred by the Seller.

Similarly, in this case it is prudent to retain a lawyer to review the legal pack prior to departing with any money even if it is the reservation fee as opposed to the full 10% deposit.  A review of the pack will tell you if there are any adverse issues which could impact your future development plans for the Property or even its value.

Problem Properties

Not all properties but some are specifically placed at auction due to the fact that there are restrictions on the title; for example agricultural occupancy only. An overage restriction could be placed on the title whereby if you were successful in obtaining planning permission to develop any part of the land a high percentage of the increase in value could be payable to the seller. There are many elements in the legal title which could affect how you can use the land and it is therefore important to ensure you have the right legal advice before bidding and securing a property or a piece of land.

Selling at Auction

If you are looking to sell at auction you will usually be required to submit a legal pack prior to the auction. This will include documents such as the legal title and the contract; some sellers will also include searches. If you sell at auction and wish to include searches it is important the contract is amended to include a provision to claim a reimbursement of the cost of the searches from the purchaser, without such a provision these costs cannot be reimbursed. We are experienced in preparing auction legal packs and will be happy to provide you with a quotation for undertaking such work. We have long-running established relationships with many auctioneers and thus once instructed by you  we can correspond directly with the auctioneer with speed and efficiency.

Our Senior Legal Assistant Anna Slavic comments:

‘I have been at an Auction where the guide price for a small piece of land was set for around £20,000, the actual land sold for £121,000. Though this is not always the case, some properties will not sell at all. The disadvantage to the seller here is that the lowest bid and the fact the property did not sell will be general knowledge therefore could affect negotiations going forward.

Having attended many auctions it is apparent that not everyone does their homework prior to attending and bidding. Indeed on a few occasions purchasers have requested my assistance after they have successfully bid and; as the gavel has gone down, actually purchased the property or land. My advice would be to always obtain the legal pack prior to bidding and have it reviewed by a Solicitor/Conveyancer. It is better to obtain advice beforehand rather than ending up with a property/land that is not of use to you. It is imperative you know what you are potentially purchasing.

Both myself and our team at RRP Associates will be more than pleased to assist with any queries you may have with regard to auction sales and/or purchases and we shall be more than pleased to attend the auction with you should you require’.

If you have any queries in respect of the above, please do not hesitate to contact our Senior Legal Assistant Anna Slavic on 0845-RRP -0000 or via email at legal@rrpassociates.co.uk or our Partner of Residential Property 'Shionda Williams on 0845-RRP -0000 or via email at legal@rrpassociates.co.uk. Alternatively come and visit us at one of our offices!

The post To Auction or not to Auction? appeared first on RRP Associates.

A Ban on Tenants’ Fees

The Tenants Fee Bill is currently going through Parliament and is likely to become law in the spring subject to any major political upheavals.

If the bill becomes law then it will remove letting agents’ charges to tenants. They will only be required to pay their rent and deposit when they sign up to a new tenancy. These changes mean that additional fees such as carrying out inventory and reference checks will no longer be allowed, although landlords will still be able to charge for replacing lost keys by tenants or for late payment of rent. The letting agents my still wish to charge for these services but these costs will have to be paid by the landlord. This could obviously lead to higher rents in order for the landlords to recoup some of these costs.

A Cap of Tenants’ Deposits

The Act is likely also to put a cap on how much tenants should have to pay for damage deposits at the start of the tenancy. Up until now there has been no cap on these deposits. The Government has proposed a maximum cap of five weeks rent for properties where the annual rent is less than £50,000. If the rent is more than £50,000 the deposit would be a maximum of six weeks rent.

Three Year Tenancies

The Government is also in consultation at the moment to consider introducing a three year tenancy term, with a six month break clause which means you could serve notice after six months. The aim is to give greater security to families who are in the rental market. However, there are concerns that should they introduce such a measure it could put off potential property investors as it give them less flexibility with their investment portfolio. This could be one step too far for the Government who may decide not to proceed with such a strategy.

“It’s interesting times for landlords going into the New Year. Clearly the Government is trying to protect the interests of tenants in view of the housing crisis but the measures proposed could very well have the opposite effect by reducing the rental market by putting off potential landlords and even pushing up rents. We will obviously have to watch this space.” James Thornton Partner.

If you have any queries in respect of the above, please do not hesitate to contact James Thornton of RRP Associates LLP on 0845-RRP -0000 or via email at legal@rrpassociates.co.uk

The post What could 2019 have in store for Residential Landlord and Tenants? appeared first on RRP Associates.

There appears to be a definite shift towards (i) shorter leases, (ii) more frequent break clauses, and/or (iii) increased alienation provisions allowing for assignment, subletting or occupation sharing. These provide businesses the flexibility to react quicker to any change in their business or sector. Savvy landlords are responding to the shift in trend in order to keep up with competition in the rental market, as most workspaces are even completely moving away from the traditional ‘fully repairing and insuring leases’, and opting for alternatives such as ‘serviced’ buildings and offices.

A way out of your Commercial Lease

There may be many instances which could lead to your need or desire to come out of your existing lease early. Perhaps your business would benefit from a fresh start in a more advantageous location, or you have outgrown your premises and there is a practical and physical need to move into bigger premises, or perhaps your business has found itself in a downward struggle and you can no longer afford your rental payments. Whatever your reason, the ability to come out of your lease early will much depend on the terms of your lease, your relationship with your landlord and the rental market at the given time.

‘Holding Over’ after the end of a fixed term

Often landlords are content with allowing tenants to continue occupation of the premises even after the end of a fixed term lease, without formally renewing the lease. If you find yourself in this situation, you are known to be ‘holding over’ the lease under Section 24 of the Landlord and Tenant Act 1954 (the Act). In order to end the lease during any ‘holding over’ period, you will have to follow a separate procedure contained within Section 26 of the Act.

It is important to consider the options available to you when you are looking to end your lease early, and the route to be taken to ensure you avoid a costly blunder. Please contact our Commercial Property Solicitor, Miss Elham Badizadegan on 0845-RRP -0000 or via email to legal@rrpassociates.co.uk

The post Trend towards flexible leases for businesses appeared first on RRP Associates.

1.    How long have you worked for RRP Associates?

I have worked as a Consultant with RRP Associates since 1st November 2010.

2.    What area of law do you specialise in?

My work mainly consists of Commercial Property including property development. I also do some private client work including Wills, Trusts, administration of estates and estate and tax planning.

3.   What are your hobbies?

Mainly sport including watching rugby, cricket and golf. I also sing in a Pop and Rock choir. I enjoy spending time with my family and grandchildren.

At this time of year I am also busy with our Christmas Tree business.

4.    Tell me about your Christmas Trees.

We grow and sell Christmas trees on our family farm in North Cheshire.

5.    What types of trees and which one is the best for Christmas ?

We grow Nordmann Fir, Norway Spruce, Fraser Fir, Blue Spruce and Serbian Spruce. At the moment we have approximately 25,000 Christmas trees growing. The best trees for Christmas are non-needle drop varieties which are the Nordmann Fir and the Fraser Fir. The best tree for hanging decorations on is the Nordmann Fir as this tree has longer and more open branches. The Fraser Fir is more dense and has a lovely Christmas tree scent.

6.    Where can you still get a Tree from John?

If you are local to North Cheshire we are open right up to the 22nd December. I would advise if you are buying a Christmas tree that you try to buy from a local grower registered with the British Christmas Tree Growers Association as their trees are likely to be fresher than trees sold at other outlets.

Merry Christmas everyone from our resident Christmas Tree grower.

If you would like a bit information about John’s Christmas Trees you can find more information on www.grappenhallchristmastrees.co.uk

The post 60 Second interview with John at our Birmingham office. appeared first on RRP Associates.

If you are running your business from commercial premises subject to a contractual tenancy, it might be worthwhile checking whether your lease says anything about the Security of Tenure provisions to ascertain whether you can renew your lease and continue to run your business from the premises on the expiry of your existing lease term.

Businesses are often forced to move premises at the end of their lease term, which can have a knock on affect on your business and revenue if location is an important factor for you, or you have built up substantial goodwill in the premises. This is more so if the need to move comes unexpectedly. Therefore, it is always worthwhile knowing exactly what your lease says.

Moreover, having knowledge of your rights and the terms of your lease can benefit you not only if you ever encounter a dispute with your landlord, but also if you are ever speaking with any investors or banks with regards to funding.

The Landlord and Tenancy Act 1954 (‘the 1954 Act’)

The 1954 Act was passed to protect commercial tenants, and gives rights in respect of their occupation of commercial premises at the end of their contractual term. The protection provided by this Act means that a tenancy will not come to an end at the expiry of a fixed term, and as an existing tenant, you will have a statutory right to renewal. In essence, it gives commercial tenants an automatic right to renew their lease, and a right to apply to the court for the grant of a new lease in circumstances where the landlord refuses to renew their lease.

Is your Lease excluded from the Security of Tenure?

A landlord who does not wish to give their prospective tenants this automatic right to renewal will have to expressly state this in the lease, and serve appropriate warning notices separately, before a tenant enters into the lease. This is often referred to as ‘contracting out’ or the lease being ‘excluded’ from the Act/Security of Tenure. If you had not been served with such a notice before entering into the lease, then your lease does most likely benefit from the provisions under the 1954 Act.

What happens if your lease is ‘excluded’?

At the end of your contractual term, should you wish to remain in the premises, you will have to negotiate and agree new terms with your landlord, whom will have the right to refuse.

For further advice on the above, or if you have any other queries in respect of your commercial premises, please do get in touch with me by calling 0745 127 0008 or email me on legal@rrpassociates.co.uk and I will be happy to help.

The post Security of Tenure appeared first on RRP Associates.

Hiromi Kuda, Partner and Head of Commercial Property at award winning and leading regional Law firm RRP Associates comments “The low interest rates allowed businesses to fall into a false sense of security as lenders were happy to carry on servicing heavy debts. By the end of September this year we saw a 27% increase in the number of companies in trouble, the equivalent of 448,000 companies. It is inevitable that the increase will see thousands more businesses fail and rising insolvency rates will be a trend to continue”

The Telegraph reported that the total figure includes 250,000 so-called ‘zombie’ businesses with negative net worth, kept alive by low interest rates and a flexible labour market but ultimately unable to invest in growth.

Adil continues “Many companies’ in particular professional and financial services companies have struggled with increased costs because of the rising minimum wage, fuel costs and increased import costs due to the weak pound.  The interest rate increase will see the cost to borrowing boosted and push those struggling firms into insolvency. The impact of the increased rate means the borrowing costs for those on tracker or standard variable-rate mortgages and those who depend upon credit will immediately be impacted and certainly before Christmas. The increase in the rate should help bolster the weakened pound but the impact could cut off economic growth when activity is already weakened due to the uncertainty of Brexit.”

“For property we can expect to see many home-owners opting for fixed rate mortgages on 5 year terms, certainty will be a prerequisite for many home-owners whilst investors may look ever more favourably to interest only mortgages.”

Despite stricter regulation, reductions to tax relief and a significant Stamp Duty tax hike when buying buy-to-let property, residential landlords have kept rent levels modest. Regions have seen little increases as many landlords have been able to absorb costs due to low mortgage interest rates. It is likely now, that landlords will opt for shorter tenancies and will welcome the opportunity to increase rents. The impact of increasing rents will have its own consequences.

If your business needs to make Commercial changes and you need legal advice. Please contact Adil or one of the Commercial Team on 0745 127 0008 or email info@rrpassociates.co.uk 

The post Bank of England Raises Interest Rates – What impact could it have on Homeowners and Businesses appeared first on RRP Associates.

Hiromi Kuda, a property legal specialist at the award winning and leading regional law firm RRP Associates says “For landlords who want to buy a rental property, or someone wanting to purchase a second home, they only have until April 1^st to avoid the soaring cost of stamp duty.

“Property investment still tends to offer much better value as a long term saving option rather than risking shares or poor returns in ISAs and savings accounts. Only fairly recently people were given access to their pension pots and while some may have been enjoying themselves and ‘spending the ‘children’s inheritance’, most are investing for their own and their families future and this is where a property purchase looks rock solid.

“While it’s true that you can never guarantee that property prices will continue to rise, and certainly I am sure they will never again be as much as they have been over the past 10-20 years, especially in London and the South East, with such a national shortage of new houses being built I would predict that the value of your home will not decrease and is likely to prove a very wise buy.”

Adil continues “Although lenders vary in their criteria for loaning money to potential landlords, the market remains buoyant and I think it is likely to continue to do so for a long time to come, despite the stamp duty increase.”

The last Stamp Duty changes were in 2014, when the threshold was dependent on the price of the property, which fell into these different bands:

Band                                                   Rate
Up to £125,000                                   0%
£125,001 to £25,000                         2%
£250,001 to £925,000                      5%
£925,001 to £1,500,000                  10%
£1,500,001 +                                      12%

From April 2016 there will be a new Buy to Let/second home rate as well as the standard rate:

Band                                      Standard Rate             Buy to Let/second home rate                                   £0-£125,000                                0%                                                        3%
£125,001 to £250,000                2%                                                        5%
£250,001 to £925,000                5%                                                        8%
925,001 to £1,500,000              10%                                                      13%
£1,500,001 +                               12%                                                      15%

The new proposal will affect anyone owning a second property that isn’t their main residence and buying another, or replacing the one they don’t live in.

This means if you already own a portfolio of buy-to-let properties, or have a second home, but plan to buy yourself a new home to live in and sell your old one then you will not have to pay the extra stamp duty.

Key points to note are:-

• Higher rates will not apply to your main residence,
• The higher rates will only apply to additional properties purchased in England, Wales and Northern Ireland on or after April 1 2016,
• Will not apply to those buying 6 or more buy to let properties in one transaction,
• Only residential properties are affected so that excludes commercial or mixed use premises,
• The 3% charge will not be payable by someone whose only property is a Buy to Let, such as where they live with their family or friends,
• The government will treat married couples and civil partners living together as one unit. This means any homes already owned by either partner will be considered in the stamp duty calculation when they buy  another property and so the higher rates will apply.  If the original property is sold within 18 months of the purchase they may be able to claim a refund.

In some cases for people who are buying and selling, if their sale is delayed it means they will probably complete on their purchase before the sale goes through.  The Stamp Duty on the purchase will be payable at the Buy to Let rate, but provided the sale completes within 18 months of the purchase, HMRC will refund the additional Stamp Duty paid.

Another proposal is to reduce the 30 day period within which to submit the return for Stamp Duty to 14 days Buy to Let investors.

Final details of the calculations are expected on 16 March 2016 when the next budget will be announced.

The post Is The Buy To Let Boom About To Go Bust? appeared first on RRP Associates.