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Stories included
- Landlords must inform tenants of their rights
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New code of duties for directors
- Councils offered £500m to help release building land
- Woman sacked for sending ambulance for a drunken collea
- Firms must act now to protect their trademarks
- Government to crack down on rogue employers
- New powers of attorney come into effect
- Government says HIPs are reducing costs
- Court says divorcing couple should receive equal shares
Landlords must inform tenants of their rights
New regulations mean that landlords and managing agents now have to provide a summary of a tenant’s rights and obligations when they send out a demand for service charges.
The provision is contained in the Commonhold and Leasehold Reform Act 2002 and is effective from 1st October.
Service charges are often the cause of disputes between landlord and tenant. The Government hopes the new legislation will reduce conflict by making the system more transparent. The summary must be written in plain language and contain specified information relating to the tenant’s rights.
The summary will have to be sent out with each demand for payment, even if that is several times a year.
Landlords need to keep accurate records of any costs they incur because tenants are entitled to request a detailed breakdown of service and administration charges, including how much was spent and what it was spent on. If landlords fail to produce detailed and accurate information when requested to do so then tenants are entitled to withhold payment.
If a tenant then disputes the charges he can challenge them at a Leasehold Valuation Tribunal.
New code of duties for directors
Company directors now have a new set of duties which require them to consider the wider interests of employees, the community and the environment when making important decisions.
The new code is part of the Companies Act 2006 and is effective from 1st October this year. One of the main purposes of the Act is to promote “enlightened shareholder value”. It means that directors must broaden their horizons when exercising their duties.
In promoting the good of the company they must take into consideration not only shareholders but also a wide range of ‘stakeholders’ who may be affected by the company’s actions. These would include staff, customers, suppliers, the local community and the environment.
This has alarmed some directors who wonder what might happen when what’s good for the company and what’s good for stakeholders might clash. For example, directors may find that they need to make staff redundant for the overall good of the firm. However, that would not be in the interests of the redundant staff who are still stakeholders.
Or there could be a situation where it might be necessary to close a branch office. Again, that may be good for the firm but perhaps bad for the local community and local suppliers.
There have been fears that this could lead to a rise in litigation from disgruntled stakeholders who feel that a company has failed to act in their best interests. This seems unlikely, however, as long as directors act in good faith and make their decisions on the basis of what will benefit the company and its stakeholders as a whole.
It’s easy to see how the examples given above might fit this criterion. Making staff redundant or closing branch offices may be to the detriment of those directly affected but still be in the best interests of the company and the majority of stakeholders.
Looked at this way, many responsible directors may wonder what has really changed as they have always run their businesses with an eye to the bigger picture of how their decisions affect all those involved in their company. The Government recognises this and acknowledges that to a large extent, the code is basically turning what is custom and practice for most firms into a statutory obligation for all firms.
Lord Goldsmith, the former Attorney General, believes there is no reason why the code should lead to an increase in litigation. He said: “The need to have regard to the interests of employees as part of the main duty to promote the success of the company was part of case law before becoming statute. We have no reason to expect that there will be a greater degree of litigation on those duties than there is now.”
It means that directors should have nothing to fear from the code if they follow the correct procedures. It will not be enough to simply engage in a box ticking exercise. They need to be able to show that they have considered the interests of stakeholders. However, that doesn’t mean they have to favour one group over another or shirk away from making difficult decisions.
The former industry minister Margaret Hodge said: “The Government believes that our enlightened shareholder value approach will be mutually beneficial to business and society. We do not, however, claim that the interests of the company and its employees will always be identical; regrettably, it will sometimes be necessary, for example, to lay off staff.
“The decisions taken by a director and the weight given to the factors will continue to be a matter for his good faith judgment.”
The Companies Act introduces other changes which also came into effect on 1st October this year. They relate to the way shareholders in private companies make decisions and the streamlining of meetings.
Written resolutions are already used as an alternative to calling meetings of shareholders. Now such resolutions no longer need to be signed by all the shareholders. A simple majority will suffice for ordinary resolutions and a 75% majority for special resolutions.
Private companies no longer need to hold an annual general meeting. Shareholders, however, can demand a meeting if at least 10% ( or 5% in certain circumstances ) wish to do so. Shareholders retain the right to receive accounts. Shareholder meetings can be on a 14 day notice period unless otherwise stated in the company’s articles.
More sections of the Companies Act will come into effect next year.
Councils offered £500m to help release building land
The Government is making £500m available to local councils to encourage them to promote the building of more houses by speeding up the process of releasing land suitable for development.
The Housing and Planning Delivery Grant (HPDG) will provide local councils with incentives to maximise the supply of building land in their areas and speed up the delivery of new housing. It’s part of the Government’s drive to build 240,000 new homes a year to meet its target of providing an extra three million homes by 2020 as set out in the Housing Green Paper published in July.
A total of £500m is being made available to reward successful councils. Under the scheme, local authorities will be asked to “identify at least 5 years’ worth of sites ready for housing and a further 10 years worth for future development”.
Councils will be rewarded if they meet agreed timetables to accelerate the delivery of new homes. Those timetables will oblige authorities to provide details of both the number and type of homes needed in their area. They will also need to identify land that is both suitable for new homes and capable of being made available.
Concern for the environment is at the heart of the new house building drive with the emphasis on providing green homes on brownfield sites. The Government has already identified 750 major brownfield sites which are being assessed for development suitability and councils are being encouraged to identify more.
House builders are being urged to sign up to the 2016 commitment to ensure that all new homes are carbon zero within a decade.
The Housing and Planning Minister, Yvette Cooper, said: "This money is about extra support for the councils which are already doing their bit. Some of them are doing a lot of work to support additional housing, but we know that others really need to do more. I want this new cash injection to push local authorities to raise their game."
The first payments under the new HPDG scheme will be made next year.
Woman sacked for sending ambulance for a drunken colleague
An ambulance dispatcher who had been involved in sending an ambulance to pick up a drunken colleague from a night club has lost her appeal for unfair dismissal.
The dispatcher and two other colleagues were dismissed for gross misconduct by the Scottish Ambulance Service for allowing an ambulance to be used for an improper purpose. There were no disciplinary proceedings against the crew involved.
The dispatcher was found to have failed to comply with accepted procedures as there was no suggestion that her drunken colleague was seriously ill and she hadn’t made any inquiries about potential illness before sending the ambulance.
The misuse of the ambulance had delayed the service’s response to an emergency call elsewhere.
A tribunal ruled that the dispatcher’s employers were entitled to regard her actions as gross misconduct and so were justified in dismissing her.
The Appeals Tribunal then upheld the decision saying there was no doubt that a reasonable employer was entitled to say the incident was too serious to merit only a final warning and dismissal was an appropriate sanction.
Firms must act now to protect their trademarks
Firms could lose control of their trademarks because of new regulations unless they take action now to protect themselves.
The problem arises because the way trademarks are monitored is changing to the European system which requires firms to be more vigilant.
In the past, a trademark application would automatically be blocked by the Patent Office if it was considered to be too similar to an existing mark. That is no longer the case because of new regulations introduced on 1st October.
The new UK Intellectual Property Office, which has replaced the Patent Office, will no longer block applications but merely inform the existing brand holder that someone else is try to register a similar trademark.
It will then be up to the existing holder to formally oppose the application. The new system means companies will have to be more pro-active in protecting their brand.
The problem is even worse for the owners of European and international trade marks. Only companies with UK-registered trade marks will be automatically notified if there’s a rival application. Those with trade marks registered elsewhere won’t be informed at all unless they subscribe to the IPO’s notification service.
The subscription costs £50 and lasts for three years.
The IPO has asked that applications for the notification service should be filed before 20th October so firms need to hurry if they want to ensure they are fully protected.
Government to crack down on rogue employers
The Government is introducing a series of new measures to deter rogue employers from exploiting their workforce.
The Business and Enterprise Secretary, John Hutton, announced that there will be higher maximum fines for companies that fail to pay the minimum wage. He also plans to double the number of inspectors who crack down on abuses in employment agencies.
There will also be tougher powers to enable inspectors to gather evidence and unlimited fines for those they catch.
However, Mr Hutton said it would be wrong to think that all agency workers were treated unfairly and referred to TUC research which showed that some people preferred agency work to having a full time job. He promised that there would be a renewed push to reach a lasting solution to agency worker rights across the European Union but said that any new policy would only receive Britain’s support if it passed two tests.
He said: "Firstly does it protect jobs and advance the fundamental right to work? Will it continue to allow companies to go on creating jobs and promote rising national prosperity?
"And secondly, will it make a positive change to the most vulnerable working people? Where we meet those tests, we will take action."
New powers of attorney come into effect
Power of attorney - the system that allows people to nominate someone to make important decisions of their behalf – has been updated and expanded in the Mental Capacity Act.
The changes, effective from 1st October, replace the old Enduring Power of Attorney with a new system known as Lasting Powers of Attorney.
Under the previous system, the old EPA allowed you to nominate someone, usually but not always a family member, who could manage your property and financial affairs should failing health or other reasons make it impossible for you to do so yourself.
The new Lasting Powers of Attorney (LPA) come in two forms and have a wider range. The property and finance LPA is similar to the old system in that it allows you to appoint attorneys to look after financial matters.
The personal welfare LPA opens up completely new options by allowing you to appoint attorneys who can make decisions about your future health care. For the first time, your attorney will have the right to refuse life-saving treatment on your behalf if he believes it is in keeping with your wishes and beliefs.
Any such decisions by your attorney would have to be made in your best interest and meet a checklist of criteria set out in the Act.
The new LPAs will need to contain a certificate filled in by an Independent Certificate provider such as a doctor or a solicitor. The certificate provider will be obliged to interview you first to make sure you understand what you are doing and that you are not being subjected to any undue pressure to appoint someone as your attorney.
Lasting powers of attorney have to be registered at the Office of the Public Guardian. This will make them more secure than under the old system and so possibly more attractive to many people.
The new system provides people with many new and interesting options when preparing for the future. Please contact us for more details.
Government says HIPs are reducing costs
Home Information Packs proved highly controversial while they were being developed over the last few years and the arguments are still raging even though they have now come into force.
HIPs have been compulsory for anyone selling a four bedroom house since 1st August and for three bedroom houses since 10th September. They’re designed to speed up the process by obliging the seller to provide potential buyers with key information right at the outset.
Consequently HIPs must contain specified documents such as an energy performance certificate rating the property’s energy efficiency and the results of standard searches.
Critics say the system was rushed through too quickly leading to difficulties right at the outset. There were some problems with energy assessors filling out forms incorrectly which then had to be corrected. Some local authorities have also been accused of being slow or even obstructive over searches.
However, the Department for Communities and Local Government says it has ironed any difficulties and the system is already providing benefits such as reducing costs and improving transparency in the housing market. A spokesman said that more than 85 local authorities have reduced their search costs, in some cases by more than £100, and the average pack is taking only five days to compile.
The Energy Performance Certificate is one of the main features of HIPs and the Government believes they are already producing results. Communities Minister Iain Wright said families buying three and four bedroom homes “are getting clear information which shows how they can save hundreds of pounds on their fuel bills and cut carbon emissions too.”
The Government plans to extend HIPs to the rest of housing market when more energy assessors become available.
Please contact us if you would like more information about Home Information Packs.
Court says divorcing couple should receive equal shares
A husband has won an appeal against a court order that left his former wife with a larger share of their joint assets when they divorced.
The couple had been married for 23 years and had two grown up daughters when they decided to separate. He already had considerable assets before he married which he then continued to build up over the years.
During the marriage his wife was given £70,000 by her father and also inherited a further £12,000 which she used to reduce the mortgage on the home she owned with her husband. She was also given a 50% share in her parents’ home and a bond worth more than £100,000 which was paid for by her family.
When the couple divorced, the judge ordered that their assets should be split equally except for the wife’s share in her parents’ home and the bond. They were left in her sole ownership. The husband then appealed against the order.
The appeal was upheld in the High Court which said the judge had been wrong to exclude the assets that had come from the wife’s parents because all the assets that went into the marriage had to be available to cover the couple’s needs.
The wife may have made an additional contribution because of the assets from her parents but that was balanced by the wealth the husband introduced at the start of the marriage and his hard work over the years. Both husband and wife should each receive a half share in their joint assets.
The ruling upholds the general principle that assets should be split equally when a couple divorce unless there are exceptional circumstances.
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