Insight Article Archives

Too poor for retirement?

Posted on November 15, 2018 - 3:19 pm by Penny Dewar

On attending a very informative presentation given recently by Rathbones, one of the UK’s leading providers of investment management services, our Head of Private Client, James McMullan, was struck by the disconnect between what the government tells us about the state of the country’s finances and the reality of the situation.

Rathbones have produced an article and a detailed report referring to various official sources, all pointing to the fact that our children, the so-called “Millennials”, will be the first generation to be poorer than their parent’s generation. However, the situation is much worse than this, and the report is worth reading in full.

It is clear that the State is gradually withdrawing its responsibility for, and reducing its contribution to, the welfare of its citizens as they enter their retirement years. This makes it more important than ever that we get good and timely advice about our finances and arrange our affairs in the most tax-efficient manner possible. This starts with a well-considered tax-efficient will and structuring lifetime estate planning provisions to maximise the allowances and reliefs available under the Inheritance Tax legislation.

It is vitally important to review your financial plans and arrangements regularly (we would suggest once a year) to ensure that these are on course. Keeping in close contact with your solicitor, accountant, or financial advisor is an important part of this process. Given the challenges facing our children’s generation, families cannot afford to ignore long-term financial planning. When apathy prevails, the taxman is happy! Don’t let the Revenue take 40% of your family’s wealth when timely planning can save thousands of pounds and make our children’s lives a little bit easier.

If you have concerns over your retirement and how to put estate planning measures in place, contact James McMullan today.

Note: This article does not constitute legal advice; it provides information of general interest about current legal issues.

Landlords must check they hit the spot with deposits

Posted on October 25, 2018 - 2:00 pm by Penny Dewar

According to figures from insurers, the number of claims relating to deposits peaked at 25% of all professional indemnity claims made by estate and letting agents in the first quarter of this year, up from just 3% last year. The claims most often relate to a landlord lodging a deposit late or failing to provide the correct information to the tenant about the terms and the deposit scheme used.

Under the Housing Act 2004, any deposit must be held by the landlord pursuant to an Assured Shorthold Tenancy Agreement (AST) in a registered deposit protection scheme and within 30 days, the tenant must be given specific details of the deposit protection scheme used and details about how the scheme works.

If a court rules that a landlord has failed in their duty, it can impose fines of up to three times the value of the deposit and the return of the deposit in addition to a fine, which must be paid within 14 days of the court order.

Property litigation expert Laura St-Gallay explains:

“It’s the landlord who will find themselves subject to the county court order. They may be able to bring a claim against the letting agent, if there is one involved, who in turn will claim on their professional indemnity insurance. It’s a costly business and bad in reputational terms for all concerned.”

She added:

“The legislation has been in place for a long time, but we see both agents and landlords getting it wrong still. Where landlords have a big property portfolio, they are more likely to have the right processes in place. For small-scale landlords or the accidental ones who may have ended up renting out their home while working elsewhere, it’s worth adopting some of the practices of the big boys as it’s no defence to say you didn’t know or had left it to your agent.

That includes taking some time to understand the law as it affects you as a landlord and having checklists for each stage of the tenancy. Then you need to ensure they are used each time, whether you are doing it yourself or checking that your agency has acted properly on your behalf. In the worst-case scenario, if you haven’t used a deposit scheme when you should have, the court can rule that a tenant does not have to leave the property when the tenancy ends.”

In addition to ensuring that the deposit is properly protected within the relevant time scales and that the Prescribed Information is provided to the tenant, landlords must now ensure that tenants are provided with a copy of the current “How to Rent” Guide, the current Energy Performance Certificate (EPC) and, before the tenancy commences, a Gas Safety Certificate.

This becomes even more important given that non-compliance can hinder the service and use of the Section 21 possession notice procedure. This can result in delays in recovering possession of the property and returning the deposit, putting landlords in an unprotected and weak position.

If you wish to discuss the steps to be taken before entering into any AST, call Laura St-Gallay, who can advise and ensure you enter into a fully compliant AST, or alternatively, if you need advice on how to recover possession of your property, Laura can also assist.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

The hidden disability: when mental health affects employee wellbeing

Posted on October 15, 2018 - 1:42 pm by Penny Dewar

The taboo of talking about mental health has started to shift following several high-profile campaigns. Still, many employers are keeping quiet and avoiding conversations with staff, even though they have legal responsibilities, and it’s been shown to improve the bottom line.

According to the Health & Safety Executive, over 11 million working days are lost each year because of stress in the workplace. Research among workers by MIND, the mental health charity, found that a continuing culture of fear and silence around the topic was adding up to a big cost to employers, with over 20% reporting they had called in sick to avoid workplace stress, and 30% saying they did not feel they would be able to speak openly with their line manager about the issue.

Such figures highlight the need for companies to have strategies focused on mental health as part of employee wellbeing, tackle stress-related absences, and avoid potential complaints or even litigation from staff.

Employers have a legal duty to protect employees from stress at work by undertaking a risk assessment and acting on it. Where an employee suffers from a mental health condition that has a long-term effect on day-to-day activity, this may be classed as a disability, requiring the employer to take positive action under the Equality Act 2010. The Equality Act makes it unlawful for an employer to treat a disabled person less favourably because of their disability without a justifiable reason.

Employment lawyer Karen Cole:

“Best practice is for employers to have clearly stated policies that are reflected in the company’s culture, so that a manager who notices a change in personality, evidence of low mood or periods of increased absence, will feel equipped to enquire if any workplace support is needed. It needs to happen in a supportive environment where the employee feels comfortable in opening up and asking for help, if needed.

It’s important to avoid an atmosphere where an employee feels that raising the issue of mental health may affect their future prospects, or that they will feel stigmatised by asking for help. Unwillingness to talk can make for a difficult position for employers.”

Such difficulties have been highlighted in disability discrimination claims which have reached the Court of Appeal. One case involved a former employee of Newport City Council, who had been off work on three separate occasions for stress-related illness and depression. Finally, the Council asked an occupational health advisor for an opinion on whether the employee was fit for work. The opinion given was that he was not a candidate for ill-health retirement and that he was not disabled for discrimination purposes. When he was subsequently dismissed following allegations of bullying, he brought a claim of disability discrimination. The Council said that it relied upon the opinion of an occupational health expert. Still, the Court of Appeal said that an employer must make a factual judgement and cannot “simply rubber stamp the adviser’s opinion”.

This need to look more carefully was reflected in another case involving an employee who had been resistant to discussing her health issues and would not allow contact with her GP. Here the Court of Appeal found in favour of her employer, Liberata UK Ltd, because the company did all it could “reasonably be expected to have done” – it did not rely solely upon occupational health advice but reviewed it in the light of its own experience and impressions of the employee and undertook its own further investigations.

Karen added:

“In creating and maintaining a culture of wellbeing, an employer should start from a perspective of how best to provide everyone with responsible support and protection from unfair or discriminatory treatment and should reflect that in processes and practice. If anyone has issues that impact on how they may perform a particular function – whether related to physical or mental health – then it’s important to look at how to introduce reasonable adjustments to enable them to fulfil the role.”

If you have any queries regarding mental health in the workplace, call Karen Cole today!

Note: This article is not legal advice; it provides information of general interest about current legal issues.

ACAS guidance on employment references

Posted on September 28, 2018 - 3:13 pm by Penny Dewar

Does an employer need to provide an employment reference?

An employer can provide an employment reference and decide on the amount of information they provide within the reference. Special circumstances may mean an employer is obliged to provide a reference. For example, when an agreed reference forms part of the terms of a settlement agreement or employers that are regulated by the Financial Conduct Authority or the Prudential Regulation Authority.

What must a reference include?

The reference can include basic facts such as job descriptions, answers to questions that the potential employer has asked, and any details about the applicant’s skills and abilities or strengths and weaknesses concerning the suitability of an applicant for the new role they have applied for.

Can a bad reference be given?

The reference must be ‘accurate’ and ‘fair’ and must not contain any ‘misleading’ or ‘inaccurate’ information.

What issues can arise with giving references?

Applicants can request a copy of the reference sent to the new employer if they wish.

It is usually best practice and safest for employers to have a policy about what references will cover. That way, employees know what to expect. It is generally safest to limit references to factual issues, such as the job applicant’s employment dates and job description. If an employer provides a reference for some individuals but not others, it could face allegations of discrimination, victimisation, or breach of trust and confidence. Employers also need to be mindful that there is no obligation within a contract with the employee to provide a reference.

Employers should record on an individual’s file whether or not the employee wishes the employer to provide a reference.

Suppose there is ever any doubt over whether or not an individual has given consent for an employer to give a reference. In that case, the employer should contact them to check whether they should provide the reference.

If a reference included information about an individual’s health, the employer would need the individual’s consent before disclosing that information.

For further advice on references or any other employment issue, speak to solicitor Karen Cole today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Employee data subject access requests

Posted on September 28, 2018 - 2:32 pm by Penny Dewar

Under the Act, a “data subject” can make a data subject access request (a DSAR), and a “data controller” has a duty to comply, subject to some exceptions.

Although responding to a DSAR can be time-consuming and expensive, the obligations of transparency under the Act mean that you must be willing to explain how you are handling the request and to confirm this to the employee within the required time limit. If you do not, the employee may feel aggrieved and believe that you have failed to comply with the Act’s requirements, leaving you vulnerable to a potential complaint being made to the ICO or a court order to comply with the DSAR.

It is, therefore, important to respond to a DSAR in an appropriate manner.

What to do if you receive data subject access requests from employees

You should make an initial assessment to consider:

whether or not you store or process data concerning the employee;
whether you intend to respond;
the scope of the request; and
the proposed approach to finding the data and dealing with the response.

In general, regardless of any suspicions about the employee’s motivation, you should approach compliance in a positive and helpful way:

you must facilitate the exercise of the DSAR;
the request must be handled fairly and transparently;
information must be provided in a concise, transparent, intelligible and easily accessible form, using clear and plain language.

In the employment forum, DSARs are frequently made in the context of an ongoing dispute or a tribunal or court claim. An employee may be genuinely motivated by a wish to find out what data is being processed and to ensure that it is accurate. However, the employee may also see the trouble and expense to which you may be put by dealing with a DSAR as offering useful leverage in a dispute and in achieving a settlement.

Your response

Your response should be in writing or, if appropriate, by electronic means. If the request was made originally by electronic means, information should be provided “in a commonly used” electronic form unless otherwise requested by the employee. At the employee’s request, the information may be provided orally as long as you are certain of the identity of the individual making the request. However, oral requests are rare.

Except in perhaps very straightforward cases, it would be sensible to take legal advice before either substantively responding to a DSAR or indicating a refusal to deal with such a request.

Are there any exceptions to the DSAR?

Under the Act, there is no obligation to comply with a DSAR in relation to the following:

Legal

Personal data in respect of which a claim of legal professional privilege could be maintained in legal proceedings. This applies only to documents which carry legal professional privilege for the purposes of English law.

Reference

A reference given (or to be given) in confidence for employment, training or educational purposes. The exemption covers the personal data within the reference, whether processed by the reference giver or the recipient.

Management

Personal data is processed for the purposes of management forecasting or management planning in relation to a business or other activity to the extent that complying with a DSAR would prejudice the conduct of the business or activity. For example, it is likely to prejudice the conduct of a business if information on a staff redundancy programme is disclosed before it is announced to the rest of the workforce.

Records of Intent

Personal data consisting of records of intentions in relation to negotiations between the employer and employee to the extent that compliance with the DSAR would be likely to prejudice the negotiations.

Other

Other exceptions relate to regulatory functions, judicial appointments and proceedings, the honours system, criminal investigations, tax collections and various corporate finance services.

What happens if you do not respond to a DSAR?

Other than in exceptional cases, you will be under a duty to take action on a request by responding. There are, however, some circumstances in which you may decide not to take action. Examples might be where:

the person to whom the DSAR was addressed is not the data controller (perhaps because it is acting as a data processor or someone else is the controller);
the request is unfounded or excessive; and/or
you can demonstrate that the request infringes the EU doctrine of abuse of rights.

If so, you must tell the employee without delay and, at the latest, within one month of receipt of the request. You must give reasons for not taking action. You must tell the employee of the possibility of complaining to the supervisory authority and taking legal proceedings.

Except in clear circumstances and in which you are confident you can justify a decision not to take action on a request (as might be the case if you are not the controller), you should engage with the employee and seek to limit the request.

For more information on data subject access requests, speak to employment lawyer Karen Cole today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Islamic Wills in England and Wales

Posted on September 7, 2018 - 6:41 pm by Penny Dewar

The European Convention on Human Rights gives everyone in the UK a right to freedom of thought, conscience and religion. This includes the freedom for an individual to live and die following their faith. This, coupled with English law’s principle of testamentary freedom, allows everyone over the age of 18, with mental capacity, to create a will.

Accordingly, a Muslim over 18 years old with full mental capacity has the right to dispose of his or her assets in accordance with Sharia law, subject to compliance with English law.

How to create an Islamic will

The legal requirements set out in section 9 of the Wills Act 1837 must be complied with for a will to be valid. In brief, a will must be:

in writing;
signed with the intention to give effect to the will; and
signed in the presence of two or more witnesses.

As with any will, care should be taken in selecting any executor(s). Sharia law recommends choosing Muslim men who have knowledge of Sharia law as their knowledge will assist them in making decisions during the estate administration. For example, investing monies in a trust fund in accordance with Islamic finance rules. Further, the will should declare the testator’s intention to follow Sharia law. This will be useful should the will be challenged.

Documenting any funeral wishes within your will, including any preferred burial site, is also useful. Many Islamic wills directly object to having an autopsy, although that will likely be a matter for English law and the relevant authorities.

Sharia law sets out strict rules determining how an individual’s assets are administered upon death. These have been prescribed in the Quran and are vastly different to English law.

Failing to create a will, Islamic or otherwise, will result in the deceased’s personal assets being distributed in accordance with the Intestacy Rules.

For a simple guide to the Intestacy Rules, see our flowchart below(a larger copy of which can be found here):

Infochart The Intestacy Rules 2023 Update

For a larger copy of the above image, click here.

These distribution rules are vastly different from those set out in the Quran. Beneficiaries under the Intestacy Rules may elect to distribute the estate in accordance with Sharia law. However, it may not be in their interest to do so, and the lack of a will can lead to family disputes.

Sharia law and estate planning

In England and Wales, estates over £325,000 are subject to a 40% Inheritance Tax, subject to any other available reliefs and exemptions. Sharia law is not the most tax-efficient way to distribute an estate as it does not fully utilise reliefs and exemptions available such as the residential nil rate band (also known as the “additional threshold”) or a spouse’s exemption.

Lifetime estate planning can assist in reducing the Inheritance Tax payable under Sharia law distribution.

Before creating an Islamic will speak to our wills, tax and trusts specialist, James McMullan, to ensure you create a valid will, attempt to minimise your Inheritance Tax liability and avoid potential claims against your estate under the Inheritance Act.

You should review your will every 18 to 24 months and whenever a life-changing event occurs, such as a birth, death, marriage*, divorce or an increase in wealth.

* It is important to note that a marriage revokes a will in its entirety, but a divorce does not, although a gift in a will to a spouse who is later divorced by the testator will be treated as if the spouse had pre-deceased.

Note: This is not legal advice; it provides information of general interest about current legal issues.

Tracking your digital worth for the next generation

Posted on August 17, 2018 - 5:02 pm by Penny Dewar

In research undertaken by accountants PWC, the value of our digital assets was estimated at £25bn, yet in a YouGov poll over half of those surveyed admitted nobody would be able to access such assets after their deaths, as they had not made any arrangements to deal with what would happen.

As a result, finding out how to protect confidential information and pass on digital assets is becoming increasingly important – whether when making a will and appointing executors, or considering attorneys to act during a period of ill health or other incapacity.

Digital assets include all content, accounts and files created and stored in a digital form, whether online, in the cloud, or on a computer or smartphone. These assets may have great financial or sentimental value.

Obvious examples of assets with a tangible financial value would be bank, building society or other types of investment accounts, but could also include gambling accounts, cryptocurrency accounts and internet payment accounts like PayPal.

Social media accounts, personal photographs and other personal records and correspondence may only have sentimental value, but in between, there may be some that have a potential value, such as domain names, blogs, or affiliate accounts that generate advertising revenue.

As the Yougov research highlighted a common problem associated with digital assets is that it is not always clear who owns digital content after death. Often the reason for this is that users found the detailed terms & conditions too difficult to understand or so long-winded that they did not read them. Some digital assets may be only a licence to use services, such as online music and media supplied through Apple’s iTunes. This sort of licence is personal to the individual and cannot be transferred to another person.

“Protecting digital assets by making sure your executors know exactly what you own is becoming increasingly important, so you need to make sure it’s on the list when it comes to making or updating your will.” private client solicitor James McMullan explains.

“Physical assets are relatively easy to identify, but if you don’t provide any record of assets held online, it’s quite possible they would be overlooked. The other problem is where access is blocked, which may be because executors don’t have the log on information or because they don’t have authority to access the account.”

Some accounts will not allow access by a third party, even if they are authorised to do so by the account holder, and in this case, it would be unlawful if executors access the account using the account holder’s log-in information.

This restriction may also be a problem for attorneys acting under a power of attorney, whether for a specific purpose or, more generally, under a Lasting Power of Attorney (LPA) for financial affairs. An LPA, which allows an individual to appoint one or more people to act as their ‘attorneys’ to help in the management of their affairs, is common among older people or those suffering from long-term illness. However, they are increasingly put in place by younger people who may need to enable partners or others to act on their behalf while they are away, for example, when travelling for business.

Protecting your digital assets

Make a full listing of all digital assets, including where they are stored; keep the listing updated regularly and store it securely. This can be alongside your will.
Make a record of all usernames and passwords, together with the email address associated with the account, in case it is needed to reset a password, and store this separately and securely from the full listing. There are also software options for secure storage of account details and passwords.
Never include any personal log-on information or account information within the will itself, as it becomes a public document once the Courts issue a Grant of Probate to executors. Similarly, no such information should be included in a Lasting Power of Attorney as the document must be shared with institutions and companies when attorneys request authority.
Assets that have only sentimental value, such as photographs, can be gifted within your will as personal chattels, to ensure they do not get overlooked.
For all online assets, check the small print and find out what happens to the account on death and then leave guidance to your executors, including whether you wish any particular accounts to be deleted or held as memorials.
Give specific authority to your executors to access and manage all your digital assets. This should be in writing and can be included within your will or made in a separate document that is signed and witnessed.

Speak to James McMullan today to track your digital worth for the next generation.

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

Cohabitant agreements: giving unmarried couples rights

Posted on August 17, 2018 - 2:29 pm by Penny Dewar

Even if you have spent years jointly contributing to the running of a house, splitting the mortgage between you, having children together or living with each other for decades, losing a partner could change everything.

If the relationship ends through separation or bereavement, unmarried cohabiting couples do not have the same or similar rights as married couples. Nor do they have the same rights as those living in civil partnerships. Both heterosexual and same-sex couples are vulnerable if they don’t have that piece of paper saying that the state recognises their relationship in law.

So how can an unmarried couple protect themselves if they don’t want to get married or are ineligible for a civil partnership? The best way is to draw up a cohabitant agreement.

What is a cohabitant agreement?

A cohabitant agreement is very similar to a pre-nuptial agreement. It is a document that lays down precisely who owns what, property rights and arrangements, the care of any children and how debts are dealt with if one of the couple either passes on or leaves the relationship. It is usually signed by both partners and notarised by a solicitor.

This doesn’t, however, make it a legally binding document. Like pre-nuptial agreements, cohabitant agreements are exactly what they say they are – agreements. It lays out the expressed wishes of the couple should the relationship break down or a partner dies, but if the next of kin does not agree with the terms of the agreement, then it can be easily challenged in court.

In most cases, as long as the welfare of any children is not impacted, the courts will recognise a cohabitant agreement and are unlikely to interfere, especially if most of the document deals with financial or property arrangements. The courts can rule to enforce a cohabitant agreement, but the document itself is not technically legally binding. We would also recommend that you make wills to provide for each other.

Surely the fact I’m a common-law spouse is enough?

The term ‘common law’ is a misnomer when used about relationships. It is certainly a well-known phrase, but it is not recognised in law, and as far as the courts are concerned, there’s no formal or recognised ‘common law’ relationship, even if you’ve been together for years.

What happens if you don’t have an agreement?

If you’re unmarried but in a long-term relationship with someone and don’t have a cohabitant agreement, then the death of a partner can be particularly traumatic. Without an agreement, there is no provision in law for the remaining partner to inherit any of their deceased partner’s estate. A surviving partner is not exempt from Inheritance Tax, either something a married or civil partnership couple have.

To receive anything from the deceased person’s estate, the surviving partner must go to court to prove that they co-owned assets – everything from the car, the house, or even the TV. In short, without some form of legal protection, surviving co-habitant partners could be left with nothing.

What should go into a cohabitant agreement?

Just like any formal agreement, they should be as detailed as possible. If unsure, you should talk to a family law solicitor, like Pippa Marshall, who will help you draw up a cohabitant agreement that could protect you both.

Your agreement should include:

a statement of intent – explaining exactly the nature of the agreement;
personal details and full disclosure of your financial assets, including inheritance and wills;
how any possessions/financial assets or property should be dealt with;
income and expenses – whether finances are covered in a joint agreement or kept separate, and whether one partner will support the other should they stop working or be unable to work;
clear arrangements concerning children, including their educational needs; and
mortgage payments on any joint-owned property, and who pays what if the couple separates.

Other clauses can be included, as there is no formal template for a cohabitant agreement. Therefore, getting good legal advice before drawing up any agreement that could be challenged in a court of law is important.

Speak to Pippa Marshall today.

Note: This is not legal advice; it provides information of general interest about current legal issues.

Understanding leasehold property

Posted on July 30, 2018 - 9:01 am by Penny Dewar

The Government has announced plans to tackle unfair leaseholder arrangements on newbuild properties, but in the meantime, as the housing market gets into full swing, it’s worth understanding the difference between freehold and leasehold property.

Increasing property prices and high population densities have seen a big increase in the number of leasehold properties across the country, as houses are split into flats and new apartment blocks are built, so there are now 1.4 million leasehold houses across England.

While leasehold arrangements are generally seen as a simple route to managing multiple occupancy buildings, over the past twenty years, there has been a big increase in the number of houses being sold by developers on a leasehold basis. These sales have seen ground rents being set at much higher levels than the ‘peppercorn’ arrangements that were typical previously and with scheduled increases. In the worst examples, leases include terms to allow the ground rent to double every ten years.

The new measures announced by the Government will target such practices, including a ban on leaseholds for almost all newbuild houses, and changes will also be made so that ground rents on new long leases – for both houses and flats – are set to zero. The Government says that it will also make it cheaper and easier for existing leaseholders to buy out their freehold, and there will be redress routes for those facing the most onerous terms.

We must wait for the details and timetable for the introduction of these changes, which are anticipated to happen during 2018, but in the meantime, whether buyer or seller, it is worth being prepared by understanding the basis on which a property is being sold. For prospective buyers, knowing the right questions to ask could save a lot of wasted time and resources. For sellers, it can ease a sale if you pre-empt any concerns and know the answers to the questions you may be asked.

What form of ownership?

It’s important to check exactly what form the ownership takes and then ask the right questions.

Freeholds

You will own the property and the land it sits on, but there may be other responsibilities that are not so obvious, such as contributing towards the maintenance of a private shared access road.

Shared freeholds

You will own your personal space in the property and generally a share of the land and the shared spaces. Any maintenance is likely to be subject to agreement between all the freeholders and the cost shared between everyone.

Leaseholds

You will be buying the right to live in the property for the remaining duration of the lease, with the land, the structure of the building and shared spaces owned by the freeholder, who may be an individual landlord or a property management company. They will hold the building insurance and consult with leaseholders about any required works, collecting service charges from each leaseholder to pay for all maintenance and managing such work. The owner of a leasehold property is effectively a tenant in a very long-term rental, having to pay an annual ground rent and ask for consent to make any changes to the property.

It’s a lease, so how long does it have to run?

Leases of between 99 and 999 years are commonly granted, and generally, the value of a property will reduce as the lease gets closer to the end but don’t expect to snap up a bargain if you’re looking for a mortgage as lenders are unlikely to make a loan on a property with anything less than 25 years left to run. If a property has only a short time left on the lease, you can ask the seller to seek an extension and transfer to you the benefit (in a Contract) of a notice served on the landlord seeking a lease extension but expect to pay a premium (to the Landlord) for the benefit following the purchase of the Property pursuant to the relevant statutory procedure.

How much is the ground rent?

Normally ground rent will apply only if it’s a leasehold property. Ground rent can be a fixed charge or one that will change over time, so check out how much is being paid currently, but look through the small print as well to be sure there are no big increases on the way. If any escalation is written in, it should not allow for a rise above the retail price index. Again, if you are seeking a mortgage, a lender will be looking to see affordability not just in the headline purchase price but also in the ongoing costs of ground rent and service charges.

How much are the service charges?

Service charges can strike fear in the hearts of leaseholders, even when they have very deep pockets, as all work is likely to be relative to the size and standing of the overall building. Be quick to ask for evidence of the service charge budget and the accounts for the past three years, and don’t be afraid to ask around about the freeholder. The agent may assure you it’s a big property management company with the right infrastructure, but if research shows they have a poor reputation in getting work done or in the amounts being charged, you’ll be glad you checked.

Are repairs and maintenance up to date?

Look at how well things are maintained as you view the property, and then check it against those service charge accounts you’ve asked for. If everywhere is looking a bit run down, there’s no evidence of regular work being done in the accounts, and there’s very little being held in the pot for future works, you can expect a big bill or an increasingly rundown environment. A survey is just as important when buying a flat as when buying a house. And, importantly, be clear about the proportion you must contribute.

And finally, for the seller, it’s always a good idea to get your ‘house in order’ by tackling paperwork before the sale board goes up. There are forms requiring detailed information about the property itself and one covering all the fixtures and fittings. If it’s a leasehold property, you will have to complete one covering details around the lease, such as the rent, service charges, insurance and future work. By working with your lawyer in advance to prepare all the forms that will be required, you’ll be well prepared to answer all the questions your potential buyer may have for you.

For more information on leasehold properties, speak to John Gillette.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Voluntary workers

Posted on July 27, 2018 - 1:49 pm by Penny Dewar

A volunteer is anyone who carries out unpaid work for a charity, fundraising body or voluntary organisation. If you hire voluntary workers for your organisation, there are certain things you need to be aware of. If you happen to be a volunteer, it pays to know your rights, too. We’ve outlined some of the legalities to help you both stay on the right side of the law.

Do voluntary workers have a contract?

Although voluntary workers don’t have a contract of employment, most voluntary organisations provide volunteers with a ‘Volunteer Agreement’, which is similar to a job description. Organisations will want to avoid creating legally binding relations with volunteers that could give them worker or employee status. As such, volunteer agreements are generally short and informal in style, often phrased in terms of hopes and expectations rather than obligations. It should set out details of the organisation’s insurance cover, and any health and safety issues.

It should also outline any training you will receive as a volunteer, any expenses that will be covered, the level of support and supervision volunteers can expect to receive in their role, and how any disputes will be resolved. A volunteer agreement is not compulsory, however.

What expenses can volunteers be paid?

Volunteers are excluded from the National Minimum Wage requirements, but they can still be paid expenses such as the cost of travel, meals at work, etc. They may also be offered training, but it’s important to note that offering paid training that is not relevant to their volunteering role could mean they are classed as a worker or employee. Offering other expenses, for example, subsidised or free childcare at times when they are not volunteering, could also mean they will be classed as an employee or worker, rather than as a volunteer.

Expenses should normally be supported by receipts or a reasonable estimate. If volunteers receive any other payment, benefit or reward, they may be classed as a worker or employee and entitled to the national minimum wage. This could also apply if the organisation has promised them paid work in future. Volunteers are still eligible to claim benefits in most cases if they are only being paid expenses such as travel expenses.

What age should you be to volunteer?

There is no upper age limit in place to be a volunteer, but children under the age of 14 cannot work on a paid or voluntary basis for a profit-making organisation without special dispensation. In some cases, insurance companies may have age limits in place which may mean voluntary workers under the age of 16 or over the age of 80 are not covered.

What are your responsibilities as an employer?

There are certain legal responsibilities that you should be aware of if you are a charity or voluntary organisation employing volunteers. Firstly, you have an obligation not to discriminate when determining who to offer paid employment to. This means that you should not take into account volunteer performance when deciding whether or not to offer a voluntary worker a paid job.

Volunteer workers are covered by government health and safety legislation and you have a responsibility to resolve any health and safety issues. Employers must also protect personal data and ensure that consideration has been given to both the personal data of the volunteer and what access (and why) the volunteer may have to personal data held by the organisation generally.

Insurance cover

All organisations employing volunteers must have professional indemnity cover in place. This will cover you if a volunteer becomes injured and makes a claim or if a claim is brought against you because of the actions of a voluntary worker. You should have a specific procedure in place to deal with volunteer grievances or disciplinary issues that may arise.

Bear in mind that even if you only use volunteer workers, you will still need to have compulsory Employer’s Liability Cover by law.

Finally, if your volunteers work with children or vulnerable adults, you may also need to carry out a CRB check to ensure that they are fit to do so.

If you hire voluntary workers, or you are a volunteer talk to employment lawyer Karen Cole today.

Note: This is not legal advice; it provides information of general interest about current legal issues.

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