Landlords lose and whiplash gets cracked in Osborne’s autumn budget

Backtracking on the contentious cuts to Working Tax Credits caught the headlines when Chancellor George Osborne delivered his Autumn Budget statement, alongside a boost to building and good news for first time buyers.

The Chancellor announced the allocation of £4 trillion of public spending over the next four years, with an £8 billion reduction in borrowing now being forecast and a predicted surplus of £10 billion by 2019-20.

In a package of measures designed to help with housing, Mr Osborne announced a doubling of the housing budget to £2bn a year, to fund 400,000 new affordable homes by the end of the decade, to both buy and rent. Help to Buy has been extended with restrictions removed on shared ownership schemes, so more people can get on the housing ladder.  There’s also a new Help to Buy equity loan scheme that will give London buyers 40% of the home value from early 2016, doubling the 20% offered under the current scheme.

But for second home owners and landlords looking to add buy to let properties to their portfolio, the Chancellor dealt another blow by announcing a massive 3% extra levy in land tax stamp duty on such purchases with effect from April 2016. The money raised will be used to fund investment in local communities. This follows on the heels of his last Budget when he announced that there would be a cut in tax relief on mortgage interest for landlords.  Tax relief is set to be gradually restricted to the basic rate, currently 20%, where landlords had previously been able to offset mortgage interest against top rates of tax.  The shift was to tackle what the Chancellor called an “unfair advantage” for landlords over homeowners.

Said Brendan O’Brien Managing Director of Breeze & Wyles Solicitors Limited:  “Landlords have been in the Chancellor’s sights for some time, with high levels of buy to let pushing up house prices and reducing affordability for first time buyers.  Buyers of second homes will also be caught by this new rate of stamp duty on their future purchases.  With the policies he set out today, it’s likely to reduce some heat in the housing market, once the new stamp duty level kicks in.”

He added: “The other sting in the tail for landlords and others making capital gains is the shift towards faster digital taxation processes.  Mr Osborne has ambitions to build one of the most digitally advanced tax systems in the world and one result of this will be faster collection of capital gains tax, which is payable on any gain made by a landlord or second home owner on a property when they sell up.”

The Chancellor also announced that people will no longer be able to get cash compensation for minor whiplash claims, in a crackdown designed to cut the number of fraudulent claims and likely to lead to reduced motor insurance premiums.   Instead, such injuries are expected to go to the small claims court with the upper claims limit increased from £1,000 to £5,000.

Underused courts will also be closed, saving £700m which will be used towards the introduction of new technology into the court service.

ENDS

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.

 


Checklist for new rules on s21 notices

On October 1st 2015 the Deregulation Act 2015 came into force which has major implications for Landlords serving s21 notices.

So what are the changes?

  • The new rules restrict a landlord from serving a s21 where the tenant has made a written complaint to the landlord about the condition of the premises or common parts of the building and the landlord has not responded or given an adequate response;

 

  •   There is no requirement for the s21 notice to specify the last day of a period of tenancy;

 

  •  A landlord cannot serve a s21 notice in the first four months of the agreement;

 

  •  Possession proceedings must be started within six months from the date of the s21 or if a s21 (4) notice giving more than two months notice, four months from the date specified in the notice.  A fresh notice must be given if proceedings have not been started within these time limits;

 

  • Introduces a new prescribed form of s21;

 

  •   Prevents service of a s21 unless the Landlord has provided the tenant with an Energy Performance Certificate or a Gas Safety Certificate;

 

  •  Prevents service of a s21 unless Landlord has provided the tenant with prescribed information and to satisfy this requirement the Landlord must give the tenant a copy of “DCLG Howe to Rent: The checklist for renting in England”;

 

  • The tenant also ahs the right to a rent apportionment of rent paid in advance in respect of a period falling after s21 notice brings the tenancy to and end.

The changes will only apply to Assured Shorthold Tenancies granted on or after 1 October 2015

The changes will not apply to a fixed term Assured Shorthold Tenancy granted prior to 1 October 2015 even if, after that date, the fixed term AST becomes a statutory periodic tenancy.

Note that from 1 October 2018, the new rules will apply to any tenancy irrespective of when it was created (except for the requirement for the landlord to provide prescribed information about the rights and responsibilities of the landlord and tenant under the tenancy).

It is advisable therefore, to provide the prescribed information, energy performance certificate and gas certificate at the start of a tenancy to make sure that these requirements have been satisfied.

You should immediately stop the practice of serving a s21 notice on the first day of a tenancy. Any notice served within the first four months of the tenancy will be invalid.

Landlords will also have to be more proactive in issuing possession proceedings if a tenant does not vacate the premises by the date set out in the s21 notice. If the landlord has not issued proceedings within six months of the date the notice is given or, if a s21(4) notice was served requiring more than two months to be given, within four months of that date, it will have lost the right to do so based on that notice and a fresh notice will have to be served.

If you have any questions on the new rules or indeed need further information please contact:

Rita Wright / Rita.Wright@breezeandwyles.co.uk / 01992 558411


Property prices help fuel family inheritance court battles

Rising property prices are helping to fuel increased numbers of inheritance disputes reaching the courts, with second marriages another major contributory factor.

Such challenges are no longer the preserve of the wealthy, although they continue to feature highly. Recent cases hitting the headlines have included the family fall-out following the death of the billionaire owner of Sotheby’s, Alfred Tauber, through to a court case over a £600,000 estate destined for good causes, where the will was unclear.

The trend towards higher numbers of inheritance disputes has been attributed to a number of factors.

As in the case of the billionaire Alfred Tauber, who died earlier this year, the rise in divorce and second marriages is behind a growing number of children and step-children, and first and second spouses, warring over estates.  For the second Mrs Tauber, a marriage lasting over 30 years was not enough to protect her from a lock-out of her apartment in London’s Mayfair, as the children of the property tycoon’s first marriage took action to remove valuable artworks from the flat.

And the rise in property prices has meant there is often more at stake, and families are more inclined to take the costly step of litigation and get the matters before the courts, if they feel they have been unfairly treated.

Earlier this year, estranged daughter Heather Ilott won a share of her late mother’s estate in a landmark ruling.  Her mother expressly excluded her daughter, choosing to leave her £500,000 estate to animal charities.  An eight-year court battle saw the daughter, who had run away from home to get married at 17, finally win a one-third share of the estate, on the grounds that her mother had not made adequate provision for her, as her circumstances were such that she would be in a position of poverty, reliant upon state benefits.

The ruling focused on the lack of connection between the late Mrs Jackson and the animal charities named, as she had not been a regular supporter or shown interest in such causes during her lifetime.  Said wills and trusts expert Patrice Lawrence :  “The implications of the ruling are that it may prove harder for parents to disinherit children in future, unless they have strong grounds for doing so, and strong links to the alternative beneficiaries.  It has long been the case that a spouse or financially-supported child could challenge the will if they were excluded, but this ruling, and the sum awarded to the daughter, suggests a shift in approach by the courts.”

Another factor contributing to the rise in inheritance disputes is the rise of online and ready-made wills, as well as clerical errors in word-processed documents, leading to challenges on the grounds of lack of clarity of intention.  The sort of difficulties that can arise were highlighted in the recent High Court ruling in the case of the late Mrs Harte, whose will was unclear as to the charities she intended to benefit from her estate and how exactly it was to be divided. The causes were identified by recognised registered charity numbers, but the names did not match up, and the way the estate should be divided and distributed was described in different ways, with different terms being used interchangeably adding to the confusion.

A similar case reached the Supreme Court recently, when Alfred and Maureen Rawlings inadvertently signed each other’s will, but the error didn’t come to light until after they had both died.   The wills were identical, so-called mirror wills, leaving all to each other and to the same beneficiaries if their spouse died before them, but with the respective names changed to suit.   When Mrs Rawlings died, as property and assets were owned jointly they simply transferred to Mr Rawlings as the survivor, so the problem did not come to light until he died.   The Supreme Court decided that the wills could be rectified to reflect the intentions of the couple, and should stand as though they had each signed the correct will.

The ruling broadened the idea of what constitutes ‘clerical error’ meaning more such errors may be able to be corrected in future and was a landmark in how the Courts will interpret wills, making a shift towards that applied in commercial contracts, by trying to identify the intention of the person who made the will.

International mobility is also playing a part in the complexity of managing estates, where people have lived abroad during their career, or in retirement, as they may have assets which could be subject to the jurisdiction of the country where they are located. If that’s not been addressed in estate planning, it can give rise to outcomes that were not anticipated, such as where a country’s laws may insist on property passing down to family members in a particular way.

She added:  “In many cases the problem lies in lack of planning.  The number of instances where an off-the-shelf, pre-packed will is appropriate are few and far between.  It’s always going to be worth checking with a specialist to make sure that what you plan is right for your own unique circumstances.  Also, importantly, there will be corroborative evidence of your intentions that will be recorded and held by the professional drawing up the will, which can provide vital evidence if a case should reach the courts.”

To make a claim under the Inheritance (Provision for Family and Dependants) Act 1975, a claim must be made within six months from the date of the grant of probate. For cohabitees, they need to show they were living with their partner throughout the two year period before they died, in the manner of a spouse or civil partner.

ENDS

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Harte, Re [2015] EWHC 2351 (Ch) (15 July 2015)  http://www.bailii.org/ew/cases/EWHC/Ch/2015/2351.html

Taubman news coverage

http://www.telegraph.co.uk/news/uknews/11863818/Widow-of-Sothebys-billionaire-locked-out-of-flat-by-stepchildren-in-inheritance-row.html

Ilott v Mitson Michael Peter Lane (Personal Representatives of Melita Jackson Deceased) the Blue Cross Animal Welfare Charity Royal Society for the Protection of Birds Royal Society for the Prevention of Cruelty To Animals [2015] EWCA Civ 797 (27 July 2015)

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2015/797.html&query=melita+and+jackson&method=Boolean

UK Supreme Court : Marley v Rawlings and Anor [2014] UKSC 2

http://www.bailii.org/uk/cases/UKSC/2014/2.html

 


Breeze and Wyles Continues to Support Hertford Contact Centre

Contact Centres play an integral part in assisting with contact between separated parents and their children and provide a safe and neutral environment where contact may take place. Contact Centres are used for a variety of reasons including alcohol and drug related problems, domestic violence and situations where the parents are just unable to reach an agreement as to how and when contact with their children can take place. The Centres will often assist with drop off arrangements and can arrange a ‘staggered’ drop off so the Centre staff are on hand to ensure the parents of the child do not necessarily have to see each other at the Centre which may be required in cases of domestic violence. The contact usually takes place at the Centre but occasionally parties will agree to the contact taking place outside of the Centre and the Centre is then used as a meeting point.

 

The Hertford Contact Centre was initially set up by Olive McCarthy, Director and Solicitor at Breeze and Wyles Solicitors Ltd and Locum Lawyer, Nikki Cable in 2008. Miss McCarthy and Ms Cable applied for a National Lottery grant which was awarded and used to set up the Centre. Breeze and Wyles Solicitors Ltd and its staff continue to support the Centre which has been registered with the National Association of Child Contact Centres. Referrals are usually made through a solicitor, the Court or a social worker.

 

The Centre offers non-resident parents the chance to arrange contact sessions with their children in sometimes volatile and difficult situations. Sessions are held on the 2nd and 4th Saturday of each month and the Centre boasts a range of toys and games for use by the families. There is also an outside garden for use and a small shop where snacks and drinks can be purchased.

 

At Breeze and Wyles we are continuing to support the work of Hertford Contact centre and are able to offer advice and assistance on children cases and contact issues following the breakdown of a relationship or on divorce.

 

Lisa Honey is a family solicitor at Breeze and Wyles specialising in family law and deals with matters covering a range of issues including divorce and financial settlements, separation following the breakdown of a relationship, children matters and declarations of trust. Lisa is also an honorary solicitor providing advice at the Citizens Advice Bureau in Cheshunt.