Clarke and Son News

The High Court has held that the tenants of a block of flats should have been offered first refusal of a lease of the airspace above the block under the Landlord and Tenant Act 1987 (LTA 1987). As such, the tenants were entitled to the lease, which had been granted to allow a developer to build additional flats on the roof of the block.

As well as considering the airspace above the block, the judgment also contains a useful analysis of whether the garages, yard, electricity sub-station and caretaker’s offices around the block of flats formed part of the block for the purposes of the LTA 1987.

Says Paul Cowdery, Partner, Clarke & Son LLP

Lawyers advising a landlord on the disposal of a property should consider carefully whether the disposal is within the scope of the LTA 1987, particularly when the disposal is of only part of the property.

Landlords who are granting leases of flats should take care over the rights granted in the lease. In this case, the fact that the garages were let on separate leases took them outside the scope of the LTA 1987. If the garages had been let in the same leases as the flats, they may well have fallen within the scope of the LTA 1987.

The Government has announced that it does not, for the time being at any rate, intend to proceed with reforms to the law that would have given cohabiting partners similar rights to married couples or civil partners on the breakdown of their relationship.

This unexpected announcement was made by Justice Minister Bridget Prentice and is all the more surprising given the inconsistency of rulings made by the courts in this problematic area.

The Law Commission had spent two years working on proposals to give protection to couples who live together. If introduced, these would have set out the respective rights of cohabitees as regards the financial arrangements on the termination of a relationship.

The number of people who are living together in a relationship but who are neither married nor civil partners continues to rise. Many of these people are probably completely unaware that they have few rights in the event of a break-up of their relationship and that such rights as they do have centre around any children of the relationship.

The problem stems from the fact that, contrary to popular belief, in law there is no such thing as a ‘common law spouse’,

says Bhupendra Sankhla, Partner at Clarke & Son

Couples who live together do not acquire legal rights and there are no set rules for how their assets should be divided if they split up. With over 2.5 million people currently living together informally, the courts are seeing a flood of disputes about who owns what when such relationships end.”

One common problem is where partners have lived together for a long time but the property they share continues to be held in the name of only one of the couple. If the couple then split up, this may give rise to a claim that the property should belong to both parties. The issues involved are often complex and such disputes can be very expensive to resolve in court. In some cases, people who have made a very substantial contribution to the financing and improvement of a shared home have been left with little or nothing for their efforts.

The review of the law in this area was intended to create more certainty in such cases, but the Government has chosen instead to wait to see what are the effects of planned reforms to the law in Scotland before any changes are made to the law in England and Wales.

 Meanwhile, the position of cohabitees is best protected by having a formal written agreement, which should be made with the benefit of independent legal advice on both sides.This is particularly important where the assets involved are substantial, so that in the event that the relationship founders, a drawn out and acrimonious dispute can be avoided.

A recent piece of research from Ipsos MORI into the HIP area trials has revealed that consumers are satisfied with home information packs and are using energy ratings to make their homes greener:

• 72% of sellers were satisfied with the HIP
• 79% agreed that it contained everything expected,
• 81% understood the documents, including their energy rating, from A-G, in the Energy Performance Certificate (EPC).

Nearly a third of buyers also plan to carry out recommendations in the EPC to improve the energy efficiency of their new home.

It was also reported that 58% of buyers would have liked to see the HIP earlier in the process, with agents often showing the packs too late, or not at all, to make a difference to the purchase with over half of the 40% of buyers who saw the HIP, seeing the report after they had made an offer on the property.

The Government has already taken action to raise awareness of HIPs and to remind agents of their responsibility to make sure it is readily available.

Source: 24Dash

Clarke & Son produce HIPs for home sellers in Basingstoke and North Hampshire and there is more information about Home Information Packs on our website.

Lessons for investors

The recent conviction of two accountants who masterminded a £100m scam yet again proves the old adage that ‘if it seems too good to be true, it probably is’.

The two men, Alan White and Shinder Gangar, were partners in the accounting firm of Dobb, White and Co., which had offices in Leicester and Nottingham. They preyed on the greed and naivety of clients who were promised massive returns of up to 160 per cent per annum on their investments and were told that celebrities such as Andrew Lloyd Webber and David Frost had invested in the scheme. As is normal in such cases, there were no investments at all, the ‘interest’ on the early investments being financed by the money invested by later victims of the scam.

Some clients had invested six-figure sums in the scheme. It is not yet known how much, if any, of their investments will be recovered. The conviction followed a three year investigation by the Serious Fraud Office.

Says Charles Marchant-White of Clarke & Son LLP solicitors,

“Anyone offering investment returns well above market rates, especially if they claim that these are risk-free, should be treated with extreme suspicion. Investment advice should never be taken from anyone not authorised to give it by the Financial Services Authority. It is straightforward to check out a firm’s credentials. Also, remember that anyone can call themselves an ‘accountant’ - even people with no qualifications at all.”

Schemes such as these are known as ‘Ponzi’ schemes, named after a famous case in the 1920s in which Charles Ponzi duped thousands of New England residents into investing in a postage stamp speculation scheme. They operate on the basis that the supposed interest on the early investments is paid by the fact that later investors come in and supply funds. In the end these schemes must collapse.

It is an offence to give investment advice for gain unless authorised to do so by the Financial Services Authority, which has a consumer protection website at www.moneymadeclear.fsa.gov.uk. As well as listing registered firms, it also provides a list of unauthorised firms currently known to be targeting UK investors. The Law Society is a designated professional body for the purposes of the Financial Services and Markets Act 2000.

The Institute of Chartered Accountants in England and Wales is currently pressing Parliament for the term ‘accountant’ to be a controlled term, making its use by unqualified people unlawful. The term ’solicitor’ is regulated in this way. However, Mr Gangar and Mr White were members of a recognised body of professional accountants at the time they worked their scam.