News image

You and the law

Here you can view previous articles.

Autumn 2007

Shooting from the HIP

Hart Brown is able to provide Home Information Packs (HIPs) along with expert legal advice. Head of Residential Property, David Knapp, explains the current situation.

Following the introduction of HIPs on 1 August 2007, there is still a groundswell of adverse opinion and comment about them.

Since 1 August, a HIP has been required to sell a four-bedroom property and, since 10 September, those selling a three-bedroom property have also had to provide one.

Unfortunately, the government failed to define the meaning of four or three-bedroom properties and this has led to loopholes in the legislation being exploited. As the average cost of a HIP is around £600 that is no small saving.

Time and energy
Originally, HIPs were due to be implemented and become law on 1 June 2007, with all residential properties requiring a HIP, including an Energy Performance Certificate (EPC). However, there was an insufficient number of Energy Assessors to cope with the demand and so the introduction was postponed.

The Government wants to extend the need to provide a HIP to all residential properties – one imagines that this will be phased in to coincide with an increase in the number of qualified inspectors.

Problems have also arisen in that once an Energy Performance Certificate has been obtained it cannot be corrected, even if the content is shown to be wrong.

The EPC is logged with the Government so that they have evidence that they have satisfied their obligations under European legislation - which the cynics indicate was the reason why the HIPS were introduced in the first place.

Property market slump?
There is also a general feeling that the property market is possibly on the verge of a slow-down. Interest rates are currently 5.75% and there is every reason to believe that there will be another increase in the rates in the near future and that by the end of the calendar year rates will be at least 6%. A Sunday newspaper article (9 September) suggested the number of four-bedroomed properites on the market at the moment is some 53% down on this time last year.

Many commentators are also suggesting that the property market is overheated and that a correction is required and will happen at some point. Possibly, the full implementation of HIPs and further rises in interest rates will result in the correction taking place.

The Government’s own new build policy could also see a further reason for the market being corrected. The Government is very conscious that young people are being priced out of the property market and there appears to be a directive to allow more smaller properties to be constructed in the form of one and two bedroom units. Ultimately this has to result in a depression at the bottom end of the market.

The property market in the United Kingdom works very much on a supply and demand basis. Eventually if the supply of properties at the lower end exceeds demands the prices will drop and possibly drop quite dramatically.
The differential, therefore, between these types of properties and the three or four bedroom properties that historically owners of the smaller properties have purchased when moving up market will become greater.
In the event that the lower band decreases by five or 10% and the next band up increases in value by five or 10%, people who own properties in the lower tier will not be able to move up-market. Eventually, this could pull the middle tier of properties down in value.

Mr Brown has indicated that his intention is to divert his Government’s time and energy into the property market for the first six months of his tenure as leader of the country.

The next six to 12 months will therefore be an interesting time for the property market. Even if some correction in the market place does occur a major crisis is not expected.

For the full article please click here
For further information contact David Knapp on 01483 887766


Back to top

Family team move

With Surrey reputedly being the “divorce capital of England”, it is important for solicitors offering a family law service to gear up suitably. With that in mind, Hart Brown has decided to centralise its Family law team in Godalming and to expand it.

The Godalming office – at 1 Lower South Street – is conveniently located within easy walking distance of the mainline station (services to and from Waterloo about 45 minutes) and is readily accessed from the A3. It has on-site parking for clients.

Godalming is the country’s second most expensive “rural” place to buy a property relative to local average income. However, the Hart Brown Family law team will be serving not only local needs, as it is experienced in advising clients living both in Surrey and from all parts of England and indeed abroad. International disputes, “forum shopping” (for spouses having connections with different legal jurisdictions/countries), and families with significant assets and complicated affairs are dealt with regularly, but a high quality of service is standard for all levels of complexity.

Hart Brown’s Family law team has always had an excellent reputation and enjoys an ever-growing list of clients. This reflects the fact that it recognises that its clients are undergoing a particularly stressful experience, and it treats all clients in a sensitive and considerate way, whilst being suitably firm on their behalf.

New senior solicitor
As part of its plan to expand the department, Hart Brown is pleased to announce that a new lawyer will be joining the Family law team in October as a Senior Solicitor. Sharon Powell has worked for over 20 years in family law, for a large Surrey law firm as a partner.

Robert Audino, Head of the Family department, said, “We are delighted to welcome Sharon to Hart Brown and look forward to offering our clients the many benefits of having a strengthened team all under one roof.”


Back to top

Divorce, Trust and Discretion

How safe are your assets in Trust? There are circumstances in which your assets might not be as secure as you think.

For example, those who have interests in Trusts should be aware of the recent case of Charman v Charman, which resulted in the highest award ever made by a court in England and Wales in a contested application for a divorce settlement.

In the Charman case the parties had been married for 27 years. Mr Charman moved to Bermuda and Mrs Charman, who lived in England, commenced divorce proceedings here.
The capital was calculated at £131,000,000 and was accumulated during the marriage. Mr Charman was very successful in the insurance market in the city.

The overseas discretionary Trust
During the course of the marriage Mr Charman created a trust in Bermuda known as “the Dragon Trust” containing £68,000,000 of the family’s capital. The discretionary beneficiaries were Mr Charman and the unborn members of his family.

During the case Mr Charman argued that the Trust assets should be excluded when dividing the “marital pot” because he had intended to create a “dynastic trust” for future generations.

Mrs Charman argued however that the Trust assets were still a financial resource of her husband and should be taken into account.

The issues
The three main issues for the court to decide were:
1. How much of the capital should Mrs Charman receive, taking into account her needs and the need to achieve fairness?
2. By how much should there be a departure from equality due to Mr Charman’s special contribution to the creation of wealth for the family during the marriage?
3. Should the Trust fund set up by Mr Charman be taken into account when dividing up the assets of the marriage on divorce?

Although the Court of Appeal held that an equal division should be used as a starting point in the case, it did not view the special contribution made by Mr Charman as a reason to reduce the original judge’s award of 36% to Mrs Charman.

Furthermore, regarding the Trust, the Court of Appeal held that the trustees would be likely to advance funds to Mr Charman if he requested them. His letter of wishes stated that he should have maximum access to the Trust capital and income and he had the power to change the trustees.

The court held that it would be unfair to Mrs Charman if the husband was able to remove from consideration a substantial proportion of assets accumulated during the marriage without her consent.

The Court of Appeal therefore upheld the award, with 36% of the family assets going to Mrs Charman.
Claire Sanders said, “This case shows that interests under a Trust may be vulnerable if the court takes the view that the assets would be made available to the beneficiary on request. Trustees and Settlors should consider this when drafting a trust deed, letters of wishes and the manner in which the Trust is administered.”

For further information please contact Claire Sanders, Family department, on 01483 887746

Back to top

No butts about it

Most people are now aware that since 1 July a smoking ban has been in place to make virtually all enclosed public places and workplaces in England smoke free.

Whilst this is tough on smokers who may, at times, feel quite literally ‘left out in the cold’, it is now the law.
Smokers may take comfort from the fact, however, that it ensures a healthier environment where people can go about their lives free from secondhand smoke, as they have been doing for some time in Scotland, Ireland and Wales.

You can no longer smoke:

Penalties and fines
If you fail to comply with the smoke-free law, you will be committing a criminal offence. The Health Act 2006 sets out fixed penalty notices and maximum fines for each offence.

In anticipation of a surge in smokers wanting to stop, £56m has been allocated for stop-smoking programmes in 2007.

The Government predicts an estimated 600,000 people will give up smoking as a result of the law change.

For further information contact Gerard Gibbs, Senior Employment Solicitor on 01483 887766


Back to top

National Minimum Wage rise

Those in the work place should note that the National Minimum Wage (NMW) was increased on 1 October 2007.

The NMW is an important cornerstone of Government strategy aimed at providing employees with decent minimum standards and fairness in the workplace. It applies to nearly all workers and sets hourly rates which pay must not be allowed to fall below. It helps business by ensuring companies will be able to compete on the basis of the quality of the goods and services they provide and not on low prices based predominantly on low rates of pay.

The NMW was increased as follows:

Employers have warned for a long time that high increases in the NMW could result in jobs being cut and there are fears that this forecast is beginning to come true.

For further information or advice contact Gerard Gibbs, Senior Employment Solicitor on 01483 887766


Back to top

Mental incapacity – it happens!

Shaun Parry-Jones, a Partner in our Trust & Investment Department, relates a salutary tale that is particularly relevant as the rules relating to Enduring Powers of Attorney (EPAs) have changed.

By making an EPA you could choose who would manage your financial affairs should you become mentally unable to do so yourself.

Since 30 September, it is no longer possible to make an EPA, following the introduction of the Mental Capacity Act 2005 (MCA 2005). However, EPAs made before that date will continue to be valid.

From 1 October the MCA 2005 introduced Lasting Powers of Attorney (LPAs). EPAs have worked well since they came into force over 20 years ago and Hart Brown has considerable experience in dealing with them. LPAs are new and Hart Brown suggests that clients take advice in this respect.

Now for that salutary tale…
Not long ago, a lady called Jane met me because she needed some assistance regarding her husband’s bank account; the banks were insisting on a power of attorney. The irony of the situation wasn’t lost on me as I sat listening to her relaying the details of her husband’s accident.

I had formed a very close relationship with Peter and Jane but I hadn’t had the opportunity to go and see Peter in hospital as yet. In any case, he wouldn’t have been able to respond to me, recognise me, or even acknowledge me following the accident.

Three weeks previously, I had assisted Peter and Jane in updating their wills. I had impressed upon them the benefits of making an Enduring Power of Attorney (EPA). Peter’s initial thought was that EPAs were for “old people” as they were more likely to lose mental capacity. I had tried to impress upon him that it wasn’t just old age which could cause mental incapacity.

After I had completed the work on their wills, I wrote to Peter and Jane once again suggesting that they consider making an EPA. The last time I saw Peter was in the High Street one lunch-time when he made a little skip and said, “Still got my marbles, Shaun!”

Now I was sitting advising Jane on how we could deal with Peter’s assets. I explained that it would not be possible for her to operate any of Peter’s bank accounts, building society accounts, PEP’s, ISA’s or even deal with the house or mortgage without obtaining a receivership order from the Court of Protection.

I produced the forms, explained the procedure and told her how she would be required to deliver to the court accounts on an annual basis. Having become somewhat daunted by the paperwork, Jane said, “I wish we had listened to you but you just never think these things will happen.”

For further information please contact Shaun Parry-Jones, Partner, on 01483 887733

 

Back to top

Charity success

Adam Hillier, a trainee in the Personal Injury and Civil department, presented a cheque for £1675 to one of Hart Brown’s nominated charities, The Esther Benjamins Trust recently.

Adam, 28, completed the London Marathon in April for the second year running, despite suffering badly from injuries throughout training.

Back to top

Hart Brown teams strengthened

Gerard Gibbs, Owain Jones, Catherine Pearsall and Dionne Phillips have all joined Hart Brown this summer.
Gerard Gibbs joins Hart Brown as a Senior Solicitor in Employment Law. He qualified as a solicitor in 1996 and since then has worked almost exclusively in the field of employment law.

His experience includes advising a wide range of clients on all aspects of employment law, including bringing and defending discrimination claims (particularly sex, race and disability), unfair dismissal claims, executive terminations, employment contracts, staff handbooks and workplace policies. “Employment law is a minefield,” says Gez (as he likes to be known). “I always stress to my clients how important it is to get advice before taking any steps whenever they have an employment issue. It is easy to get things wrong.”

Owain Jones joins the Commercial Business Department as a Litigation Solicitor. He trained as a Barrister before re-qualifying as a solicitor in January 2006. “I have a broad experience of general litigation but with particular emphasis on partnership disputes and landlord and tenant disputes. My experience as a barrister has enabled me to bring extra skills to the role of a solicitor,” says Owain.

Owain is a keen sportsman. Recently he attempted to climb Mont Blanc with a friend, in order to raise money for Cancer Research and a ward at a local hospital in South Wales. He has already raised over £7,000 and looks set to beat the target of £12,500.

Dionne Phillips joins as a Legal Assistant in the Personal Injury department, dealing with matters such as road traffic accident claims, employer liability issues and public liability. “I am looking forward to the opportunity of developing my knowledge and skills base through managing more challenging, high-value claims. Becoming part of a team that has won millions of pounds in compensation for its clients is a great motivator.”

Catherine Pearsall has joined the Residential Property department in Woking as a Conveyancer. She practiced law in South Africa before qualifying in England as a solicitor. She has extensive experience of residential property work and says, “I am very impressed with the systems Hart Brown has in place and the high standard of its IT. This is enabling me to provide a fast, efficient and high-quality service to my clients – something which is very important to me.”

Bettina Brueggemann, Managing Partner, said, “Hart Brown welcomes all of our new people, who will strengthen further the level of service we already offer. We have the ability to provide clients with an integrated package of services, with fast and easy access to highly experienced and knowledgeable lawyers.”

Back to top