Clarke and Son News

On 20 February 2009, the Government published the final agreed design of the Homeowners Mortgage Support Scheme (the scheme).

The scheme aims to help homeowners remain in their homes for longer if they suffer a loss of income and temporarily cannot afford their mortgage repayments.

The establishment of the scheme was announced in December 2008. Since then, the Government has been working with lenders, trade associations and money advice agencies to finalise the scheme. The scheme design now sets out the key elements, including eligibility criteria, risk-sharing arrangements and duration.

The Government is now working with lenders to agree the final scheme documentation. It plans to make the scheme available to householders in April 2009, and will publish further details of the scheme when they are available.

If you would like help on any legal aspect of re-mortgaging or on buying or selling your home, please contact Paul Cowdery on Tel: 01256 320 555.

With effect from 1 April 2009, landlords and employers should check that anyone carrying out work on gas appliances or flues is registered under the new Gas Safe Register. CORGI registration will no longer carry any statutory force. There is no grace period.

In the commercial sector, failure to check that an installer is registered under the Gas Safe Scheme may mean a breach of the Building Regulations 2000 and Regulation 3 of the Gas Safety (Installation and Use) Regulations 1998.

In the residential sector, as well as a breach of the Building Regulations 2000, residential landlords (including those in the social housing sector) will breach Regulation 36 of the Gas Safety (Installation and Use) Regulations 1998 if their regular gas appliance checks are carried out by a person who is not registered on the Gas Safe Register.

This change in the regulatory regime will not only be of importance to Employers but also Landlords, Tenants as well as their agents, advisors and property managers.

If you would like advice on renting out a residential property, please contact Paul Cowdery on Tel: 01256 320 555.

If you would like advice on renting out commercial property, please contact Charles Marchant-White on Tel: 01256 320 555.

The European Court of Justice has ruled that employees on long-term sick leave are entitled to take all holiday they have accrued when they return to work. Furthermore, if workers were sacked or left a firm, they must receive holiday pay equivalent to the time they were unable to take while ill. This decision goes some way to settle years of dispute over whether holiday rights accrued are lost after prolonged illness.

 

The ruling specifically impacts UK employers due to UK membership of the EU and the implementation of the Working Time Directive in 1998. Under the European Working Time Directive, workers have a “right to a minimum period of paid annual leave”. However, “a worker does not lose his right to paid annual leave which he has been unable to exercise because of sickness. He must be compensated for his annual leave not taken,” the ruling said.

 

However, the ruling has been seen as a blow for many employers. In practice, the ruling means that somebody who was away from work for two years could then be entitled to a minimum of 40 days of leave (with the addition of public holidays).

 

Nicholas Bowers, employment partner at Clarke & Son LLP, made the following comments:

 

“The decision raises a multitude of issues for employers. For an employee who never returns from long-term sick leave, the employer would be forced to make a lump sum payment on cessation of employment. This invariably creates a sizeable problem in particular for a small employer and is exacerbated further by the financial strain placed on employers in the current economic situation. This is coupled with the practicality of re-integration of the employee back into the workforce after a lengthy period of absence”

 

Meanwhile the business group, the CBI, described the ruling as

 

“a real blow to firms trying to keep jobs alive during the recession”. “Businesses themselves also suffer when staff take sick leave, and we had hoped that a compromise could have been achieved over unused holiday time,”

 

said the CBI’s director of HR policy, Katja Hall.

“Instead, at a time when the economy is struggling, this judgment will ensure that staff are away from the workplace for longer, and it will create a headache for HR departments, who will have to review their policies and contracts.”

If you would like advice on employment issues, please contact Nicholas Bowers or Tel: 01256 320 555

On 3 February 2009, Andrew Dismore MP introduced the Home Repossession (Protection) Bill (HRP Bill) as a Private Members’ Bill. The HRP Bill seeks to amend the Law of Property 1925 to require lenders to first obtain a court order for possession before they can sell a defaulting borrower’s home. The HRP Bill will also give the courts the power, in appropriate circumstances, to delay the sale and to give the borrower more time to repay the arrears.

The HRP Bill was presented in response to the decision in Horsham Properties Group Ltd v Clark & Anor [2008] EWHC 2327 (Ch), which confirmed that a lender can sell a defaulting borrower’s home without a court order.

Following the Horsham case, the Council of Mortgage Lenders (CML) published a voluntary statement confirming that CML members will obtain a court order before seeking to sell, or appointing a receiver to sell, an occupied residential property when the borrower is in default.

Mr Dismore described it as

“shocking that … such a basic legal protection for home owners is not already part of our law”.

Mr Dismore told the House of Commons that this is a problem which is both immediate and urgent.The second reading of the HRP Bill will take place on 26 June 2009.

If you would like advice on any aspect of buying or selling your home, please contact Paul Cowdery or Tel: 01256 320 555