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'Commercial Property' Category Archives

December 18th, 2019

What changes will there be to Employment Law in 2020?

Employment law book on desk of lawyer in law firm. legal education conceptWhether you’re an employer or employee, it’s crucial that you remain up to date on the UK’s employment law.

2020 is almost here and with the New Year comes changes. In this post, our specialist employment law solicitors explore the changes in employment law any business owner, employee or self-employed person should expect in 2020. This includes:

  • The publishing of executive pay gap reports
  • Parental bereavement provision
  • Changes to the IR35 rule
  • Introduction of the ‘Good Work Plan’
  • Termination tax changes

Executive pay gap reports set to be published

As of 1 January 2019, UK-listed companies with more than 250 UK employees were legally obliged to annually disclose the salaries of their chief executives and compare them against the average UK worker.

What information needs to be reported?

Companies need to report on the pay difference between a CEO and the full-time UK employees from the 25th, 50th (median) and 75th pay percentile. In addition, this pay gap must be justified, meaning that directors have to show what effect an increase in share price will have on executive pay and whether they are doing enough to earn their pay packets. They also have to justify any changes to the ratios compared to the previous year and whether the current median ratio is consistent with the company’s broader policies on employee rewards, pay and progression.

As this requirement applies to the financial year beginning on or after 1 January 2019, companies should start publishing their pay ratios in 2020. There isn’t a fixed deadline for all companies’ reports to be published.

Parental bereavement provision

In October 2017, the government confirmed its plans to pass a new workplace right of leave for bereaved parents. The Parental Bereavement (Leave and Pay) Act entitles employees who have lost a child under the age of 18, or have suffered a stillbirth from the 24th week of pregnancy, to two week’s unpaid leave from the start of their employment as a right. The leave is set to be paid at the statutory rate if the employee has accumulated 26 weeks’ service. This Bill is set to come into force in 2020.

Changes to the IR35 rule

From 06 April 2020, the IR35 tax rule will be extended to private sector businesses with an annual turnover of over £10.2 million or more than 50 employees. The IR35 tax rule makes sure that intermediary workers’ pay broadly the same tax and National Insurance contributions as permanent employees.

This rule may apply to you if:

  • You provide a service through an intermediary
  • You are an agency providing workers’ services
  • You are a client who receives workers’ services through an intermediary

It is the government’s aim to cut tax avoidance for off-roll payroll contractors working for personal service companies (PSC). From April 2017, it has been the discretion of public sector employees to decide whether the IR35 rule applies.

The Good Work Plan

The Good Work Plan is a commitment to a range of policy and legislative changes that work to improve workers access to fair work.

Agency workers – on the 06 April 2020, the Agency Workers (Amendment) Regulations 2019 will come into full force. This will abolish a legal loophole known as the ‘Swedish derogation’ rule that allows agencies to opt-out of equalising the pay of agency staff with permanent employees.

Seasonal workers – the reference period for calculating an average’s weeks pay will be extended from 12 weeks to 52 weeks from 06 April 2020. This should improve holiday pay for seasonal workers.

Written particulars – rights to receive a written document setting out basic terms of employment and conditions will be extended to workers, as well as employees. This is intended to improve the clarity for many workers regarding their contractual agreement. Presently, employers have two months to provide written particulars; it is moving to become a day-one right.

Tax on termination payments

On 06 April 2020, a measure comes into force that aligns the rules for tax and employer National Insurance contributions (NICs). According to CIPD, any part of a termination payment above £30,000 will be subject to employer NICs. The £30,000 threshold guarantees that no statutory redundancy pay on its own will be affected.

Talk to an employment law expert

As an employer, understanding employment law is crucial to your business’ success and retaining employees. We can give you impartial legal advice on any of the following issues:

  • Contracts of employment
  • Employee handbooks and policies
  • Defending employment tribunal claims pursued by employees, i.e. unfair dismissal and discrimination
  • Advice on redundancy procedures
  • Disciplinary and grievance issues
  • Dismissing or disciplining an employee
  • Drafting and dealing with settlement agreements
  • Variation of contract terms
  • Discrimination
  • Business transfers (TUPE)
  • Breach of restrictions by an employee

Our expert employment law advice applies to employees as well as employers. If you are an employee and you want to know what you are entitled to, contact the specialist employment solicitors for employees at Foys Solicitors. We will help you understand your rights as an employer and how they are going to change in 2020.

To find out more, get in touch by filling out our Online Form, or contact your local office for a free initial consultation.

Alternatively, you can email us at enquiries@foys.co.uk.

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December 11th, 2019

Top five most common questions asked by commercial landlords

Landlord unlocks the house key for new homeBeing a landlord has a lot of responsibility, and you may be worried about what legal obligations you have. At Foys, our commercial property solicitors offer expert advice and answer five of the most common commercial landlord questions.

Whether it’s an office building, retail store or leisure facility, a commercial landlord is a business owner with many responsibilities. These responsibilities will differ from those associated with renting out a residential property. Generally, you will have a duty to ensure your premises are well-maintained, secure, safe and healthy places for people to operate.

Being a commercial landlord offers you the potential for long-term and stable income, as well as an opportunity for capital growth. To make the venture successful, it is best to have competent legal advice and this is where Foys come in.

Foys can review your lease with you and discuss the practicality of becoming a successful commercial landlord. In this post, our expert property solicitors answer five of the most common questions asked by commercial landlords.

Here are the most common questions asked by commercial landlords:

Am I responsible for the maintenance of the property?

This would usually be laid out clearly in the lease. Generally, tenants should keep the premises in good condition and take responsibility for any damages incurred (dilapidations). However, if the tenant is only renting out a space within a larger property owned by a landlord, the landlord may be responsible for the overall functionality of the building itself.

Typically, a landlord is responsible for maintaining the general upkeep of a commercial property, making repairs when necessary. This could be fixtures and fittings found therein. It is very important that you lay out what duties you have in the lease. A good lease determines your rights and responsibilities and gives you protection in most situations. If any potential disputes arise over maintenance, it will be a good point of reference to make your case.

Some tenants will take on a Full Repairing and Insuring (FRI) Lease, and this means the tenant will take on all repair costs and insurance for the property. Normally, a tenant would survey the property before entering into such an agreement. This could act as a bargaining tool for the tenant, in the negotiation of the lease.

What other charges may I incur as a commercial landlord?

When you take on a commercial property, there may be other costs involved. Ideally your income from rent will cover these costs, but it is a good idea to keep money aside to cover any additional expenditures. These can include mortgage payments, letting agent fees (if you choose to outsource the management of the property), taxes, insurance costs (if outlined in the lease) and any legal and administrative fees.

The commercial property solicitors at Foys can advise a landlord on the risks associated with renting a commercial property, the types of insurance that make the most sense for the property and how to prepare for additional costs. We can help you decode all the legal jargon and lay-out the process of preparing a lease agreement that suits you and your needs.

What documents do I need to have as a commercial landlord?

There are several documents you need to be aware of as a commercial landlord. Some are required by law, and some are just good practice. They include an Energy Performance Certificate (EPC) – currently landlords are not allowed to rent out properties with a rating below E, any documentation associated with an accredited asbestos survey and gas and electrical survey certificates – given at the beginning of the tenancy and after each inspection.

Having a good tenancy agreement is also vital in determining what responsibilities you have as a commercial landlord. This will lay out who is responsible for maintenance and taxes and agree on rent and terms of the lease.

It is also a good idea to compile inventories for your property, so you know if anything is missing or damaged during the tenancy.

What other responsibilities do I have as a commercial landlord?

Depending on the lease, a landlord may be responsible for ensuring that health and safety regulations are met, including proper ventilation, water supply and cleanliness. If the property is in a state of disrepair, you may need to sort this out before it can be offered to tenants.

This also extends to fire safety. In the context of commercial properties, The Regulatory Reform (Fire Safety) Order 2005 (The Order) imposes various duties on the ‘responsible person’ – this can be the landlord or the tenant, or sometimes a combination of both. This can be carrying out risk assessments or ensuring emergency exits. A landlord may also need to provide a safety engineer and registered gas-safe engineer to check the property regularly. You may also need to provide tenants with a reliable fire alarm system and fire extinguisher.

Under what circumstances can I evict a tenant?

Occasionally, you may find yourself in a situation where you wish to take back the premises from a tenant – this can be due to rent being in arrears, damage or general disrepair, subletting the property without permission or being an annoyance to neighbours. It is imperative, however, that you follow the correct eviction process.

The Landlord and Tenant Act 1954 dictates that tenants of a business property may renew the lease and remain on the premises at the end of the lease term. There are some exceptions to this. If you would like to discuss the possibility of including or excluding security of tenure, you can contact Foys team of property solicitors, so you can legally decline to renew a lease.

A landlord who wishes to end a commercial lease must give the tenant six months written notice, and indicate whether they are open to a new tenancy agreement. There are strict guidelines for these notices, and it is recommended that a landlord consults a specialist commercial property solicitor, like those at Foys before they take action.

Foys can help commercial landlords

There are many groups and services that a commercial landlord can turn to for support and advice. Landlord associations and letting agencies may be able to help with the management of your property and offer assistance in dealing with tenants. However, when considering a commercial lease, it is always a good idea to get in contact with a reputed specialist commercial property solicitor. At Foys, we are the legal authority on commercial business matters in Yorkshire, Nottinghamshire and Derbyshire, and have over three decades of experience in offering excellent services to commercial landlords. We can advise you on insurance, taxes and tenancy disputes.

We know that hiring a lawyer can be expensive, so we offer a FREE initial consultation, where we can discuss your case and give you an idea of costs. To find out more, give us a call on 01302 327 136, or alternatively, you can fill out our Online Form.

Get in touch with your local office:

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July 11th, 2019

Commercial property solicitors

Commercial property solicitors

With the assistance of our experienced commercial property solicitors, advisors, conveyancers and more, you can rely on us for sound legal support and advice regarding commercial conveyancing.

As a commercial property owner looking to buy, sell or lease property, a good comprehension of transactional laws can ensure that you’re able to make the best decisions for your situation.

The commercial property team at Foys Solicitors is here to help you make those decisions. Our passion for helping property owners with their commercial property needs led us to update our commercial property solicitors page with reliable and trustworthy information.

On the page, you’ll find out how we can help you with:

  • Acquisition and disposal of freehold and leasehold property
  • Landlord and tenant matters
  • Asset management
  • Property refinancing: bridging loans, mortgages, legal charges and debentures
  • Business sales and purchases
  • Purchasing and selling business premises
  • Handling complicated renewals
  • Problematic disputes with commercial tenants

Contact Foys Solicitors commercial property team today

For a free initial consultation on our services and how we can help you, call us on 01302 327136, email us at enquiries@foys.co.uk or complete our Contact Form.

For those considering entering the commercial property world, take a look at ‘the complete guide to becoming a commercial landlord’.

May 22nd, 2019

Dealing with rent arrears as a commercial landlord

When a tenant falls behind on their rental repayments they are said to be in arrears. Typically, a rental agreement stipulates that rent be paid 30 days after the starting date. If a tenant has failed to pay the agreed-upon sum for 30 days after the rent was due, they are then one month in arrears, and so on so forth.

For all landlords, rent arrears are a business risk and a relatively common occurrence. For commercial property landlords, you would usually diligently vet the tenants to prevent the occurrence of rent arrears, but despite your best efforts, your tenant may fall into arrears as a result of cash-flow problems being experienced by the business. When rent arrears do happen, there are legal recourses that landlords can take to recover rent, interest and any costs incurred as a result of the late payment.

In this article, our specialist commercial property solicitors at Foys aim to discuss the various legal avenues open to commercial landlords whose tenants have rent in arrears and the best practices for exercising the options available.

Establishing rent arrears

First and foremost, a dialogue should be opened with the tenant to investigate the reasons for the late payment of rent. A notice should be provided in writing to advise your tenant that they are in arrears. This is also an important piece of correspondence should the situation escalate and you need to pursue debt recovery via a legal pathway.

While making contact with your tenant regarding the initial late payment is good practice, you are able to serve them with a mandatory notice after 2 months of rent arrears to demand payment. Depending on the circumstances, an eviction notice should also be prepared.

Avenues open for debt recovery

Upon establishing that your tenant is unable or unwilling to fulfil their contractual obligations, it’s best that you contact an independent commercial landlord solicitor who will discuss a number of legal recourses available that will facilitate a resolution – some more painless than others. The main things to consider before deciding on a particular avenue are:

  1. Whether you want to keep the tenant on board and are happy to negotiate or compromise with respect to receiving the full payment.
  2. Look into the tenant’s history and see whether they have been in arrears before.
  3. Is the outstanding debt considerable enough to warrant a pursuit by legal or other means?
  4. Will pursuing debt recovery drive the tenant into insolvency and therefore lessen the likelihood of you recovering your money in full?

Talking to our commercial property solicitors and weighing up these three questions will give you a better gauge of the suitability of the options available as well as a better understanding of which method will likely give you the best chance at recovering your rent and any interest in its entirety.

Payment agreement

If the tenant is able to convince you that their financial situation is only temporary, or you believe that given more time they will be able to pay you back in full, you can enter into a payment agreement with them which requires the payment of the outstanding amount in instalments.

This is the preferred option for commercial landlords who don’t want to ruin the relationship they’ve established with the tenant, but also want to receive what’s owed to them in full. This option should also be considered in areas where the rental market is not conducive to short-term lets and high tenant turnovers, so it may be in your interests to preserve the relationship when considering your long-term prospects.

It’s advisable that this payment agreement be drawn up by a lawyer so as to carefully outline the rent arrears is to be paid on top of the normal rental agreement. In the event that this agreement is reneged on, the landlord reserves the right to forfeit the lease.

Drawing down on the rent deposit

If the initial rental agreement included a rent deposit, the landlord is within their rights to draw from this deposit in order to recover rent arrears – as long as the lease contract stipulates this. The tenant must then top up the deposit within a certain amount of time. This is the best course of action for commercial landlords that require a quick recovery of outstanding rent – however, it is only a short-term solution, so if the tenant is in a precarious financial situation, it’s not always advisable.

Serve a statutory demand

If your commercial property is being leased by a company and owes more than £750, you’re entitled to serve the tenant with a written demand for payment. This document needs to comply with statutory requirements, but once served, the tenant has 3 weeks to pay before you commence legal proceedings against them for insolvency or winding up of the company.

Forfeiture

In the event that rent has not been paid on time, usually for a period of between 14 and 21 days, a commercial landlord can “re-enter” a premises (when the tenant is not present) and change the locks – this is known as forfeiture. If the tenant is insolvent, then this is often the most economically viable option as it forces the tenant to pay up or face the potential loss of their business. Forfeiture is a tricky avenue to go down, so consulting an expert landlord solicitor such as Foys is always advisable – particularly if unsure of the rules surrounding this principle.

Pursuing a guarantor

If the tenant has a guarantor under the lease, then it is possible for a landlord to pursue them for the rent in arrears, rather than the tenant directly.

CRAR

The Commercial Rent Arrears Recovery Act 2014 is a legislative attempt to protect the rights of landlords by enabling them to employ an enforcement agency who will assume possession of a tenant’s goods for sale in order to recover debt. This is a complex process that requires various notices to be served on the tenant, and certain conditions need to have been met before the repossession can occur. CRAR should be considered carefully as it can only be used to recover rent, and entails waiving your right to forfeiture.

Issue Court Proceedings

Issuing court proceedings are often the last resort as they can be time-consuming and also expensive.

If you’re a commercial property owner or landlord who wants to know more about the possible avenues for recovering debt or you currently have a tenant whose rent is in arrears, speak to one of our specialist commercial property solicitors first. We can provide bespoke guidance as to the best practices for your commercial property, as well as assisting you with deciding on the best course of action for recovering full payment without breaking the bank.

To get in touch simply fill out our Online Form or call your local Foys Solicitors office:

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This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.

May 15th, 2019

Hosting an Airbnb: Everything a landlord needs to know


Airbnb is a global, online marketplace which matches homeowners with guests in regard to short-term homestays and/or tourism experiences in cities all over the world. It has emerged as one of the most successful and most popular rental services and hospitality companies globally thanks to its distinct advantages:

  • It allows homeowners to make extra income by renting out a room temporarily (a relatively low-risk, high-return approach).
  • It empowers travellers to seek low-cost or non-traditional accommodations.

Like other disruptive innovations, Airbnb has its fair share of controversy. The shift from hotels to Airbnb lodgings has led to cities losing out on millions on tourism taxes and once quiet neighbourhoods are being swamped with short-term sublets who may be too rowdy for one’s liking. In addition, while the ‘risk’ is deemed particularly low for those letting out their premises, the laws governing the rights and responsibilities of landlords and their guests aren’t clearly defined, and as such, this can have serious ramifications in circumstances where something does go awry.

There have been a handful of highly publicised incidents involving Airbnb guests occupying premises under false pretences, and others involving the questionable health and safety conditions of premises being rented via the room-sharing platform.

In 2016 a home rented in Putney through Airbnb was severely damaged after the guest held a party, with the same year seeing a balcony in Brighton collapse with four Airbnb guests injured in the process. Despite lawsuits being settled, the regulation of these properties is still an ongoing process – mainly due to the company’s global presence and legislation differing in many countries when it comes to health and safety and rental licencing and permissions.

Potential consequences for landlords

Airbnb operates in a legal grey area when it comes to navigating the murky waters of homeowner insurance and business related activities. Typically, a homeowner insurance policy excludes business-related activities as the property is not structured as corporate premises. This makes claims against the landlord (where a guest suffers an injury) or claims of property damage by the landlord difficult to traverse when it comes to insurance – particularly where liability is concerned. While Airbnb does offer Host Protection Insurance and has a track record of covering damage costs in the event of lessee fraud and false pretence, this doesn’t take the place of a substantial home insurance policy and as such, coverage can be problematic if a problem does arise.

Moreover, depending on where your property is located, you may be subject to specific planning regulations that dictate whether your premises is subject to additional costs as a result of letting. For instance, under UK property regulations, if a premises is available to let for 140 days or more per year it is classified as a self-catering property and consequently subject to business rates. Rates will be based on the property type, size, location and how many guests are able to stay in your listing.

This should certainly be considered and properly researched prior to advertising on Airbnb as you may be required to apply to your local council for a “change of use” to classify your property as commercial rather than residential.

If you are a responsible for the mortgage on your property, you need to ensure that subletting is permitted as the bank or mortgage company are invested in your property and as such, have a legal interest in its maintenance and upkeep.

As a landlord, your responsibilities for maintaining the property and ensuring your guests’ safety are the same under Airbnb’s rental terms and conditions. The company isn’t liable for upkeep, so ensuring that the structural integrity of your building and any fire, gas and electrical safety regulations are up to standard is your duty to the guests.

Protecting your guests, your home and yourself

If you’re planning to become an Airbnb host by listing your property on the Airbnb site, here are a few things you need to consider:

  • Check with your local council on its short-term rental legislation. In London, the Deregulation Act of 2015 allows homeowners to rent out their premises for up to 90 nights per calendar year without being considered a ‘change of use’. This means, once your property in London has been rented out for 90 days in a year, Airbnb automatically limits your listing unless you have planning permission to host more frequently.
  • If you own a leasehold property, chances are you will find a clause restricting your rights to sublet without the freeholder’s consent.
  • Check any terms and conditions in both your mortgage and insurance which may include clauses prohibiting your leasing of the premises.

Once you have established that your premises are able to be leased for short-term with Airbnb, the next step is clearly and comprehensively outlining what is allowed for guests staying at your property. This may include:

  • If you allow parties, pets or smoking.
  • Outline the ramifications if the rules are broken.
  • Ensure your insurance coverage is substantial and up-to-date.

How to resolve a dispute

The potential for a nightmare Airbnb guest is well documented, with stories gaining widespread media attention following the company’s prolific rise to success. But often not mentioned are disputes among neighbours who resent short-term guests holding wild parties and exhibiting anti-social behaviours.

If your Airbnb guests have left you with a flood of complaints from your neighbours, it’s wise to talk to them and resolve the issue directly. However, if they have taken their case to the First-Tier Tribunal (Property Chamber) which handles disputes over property and land, then it is best that you seek help from an experienced property solicitor like Foys.

At Foys Solicitors, we have a proven track record of assisting landlords in the understanding of their rights and responsibilities as well as in best protecting themselves and their finances. To get in touch simply fill out our Online Form or call your local Foys Solicitors office:

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This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.