Predatory marriage refers to the targeting of a vulnerable adult with the intention of marrying them for financial gain. The most common example is when elderly people living with dementia are targeted by, usually younger, partners who convince them to marry in secret.

This is an issue when considering inheritance because when someone gets married, any Will they made previously is automatically revoked. This means that the person’s new spouse will inherit once their partner passes away, potentially leaving other family members with nothing.

Factors that determine a Predatory Marriage
Capacity.
Because the threshold for capacity to consent to marriage is lower than the threshold for capacity to give instructions for a Will, someone living with an impairment such as dementia could be deemed to have capacity to marry even if they do not have the capacity to give instructions for a new Will.

In a 2017 case the Court said that to have the capacity to marry someone would need to “be able to understand, retain, use and weigh information as to the reasonably foreseeable financial consequences of a marriage, including that the marriage would automatically revoke [their] will.”

Despite this judicial ruling, marriage registrars have no legal training in assessing capacity.

Forced marriage rules.
There are rules in England and Wales relating to forced marriage which has been illegal since 2014.

The Anti-social Behaviour, Crime and Policing Act 2014 attempts to protect those that have been coerced into marriage including protecting those who cannot consent due to learning disabilities. The Act allows the Court to stop marriages if they are satisfied that consent has not or cannot be given.

Case law: a prime example from this year.
This year a Court have banned a man from marrying his female partner who is living with dementia.

The woman has a £1 million Estate and the woman’s daughter was concerned that her mother’s partner only wanted to marry her mother for financial gain. The daughter had called the police after discovering that her mother’s partner had a history of conning vulnerable women. Her daughter brought action through the Courts and was granted a forced marriage protection order.

The forced marriage order has been granted for 12 months in which the man is not permitted to see his partner, marry her, or enter a civil partnership with her.

The law was used effectively in this instance but difficulties arise when someone is convinced to marry in secret shortly before their death such as in the situation below.

Is reform on the horizon?
A campaign has been started by Daphne Franks to change the marriage laws to protect vulnerable adults. Her mother, Joan Bass, was 91 and was living with severe dementia and terminal cancer when she passed away in March 2016. The family then discovered that 5 months prior to her death she had secretly married a man aged 68.

The marriage revoked the Will Joan had made in 2004 which left her Estate to her children meaning the intestacy rules applied so her new husband was set to inherit her estate. No one in the family knew about the marriage and her family believe that Joan did not remember that she was married or that she had capacity to consent to the marriage. Joan’s family lost their inheritance and their right to arrange their mother’s funeral.

Her children have started a campaign with the aim of (amongst other things):

Changing the law so that marriage does not revoke a Will;
Creating an offence of predatory marriage;
Training registrars to look for signs of insufficient mental capacity; and
Check that anybody named on a Power of Attorney is aware of the marriage before it takes effect.
Labour MP Fabian Hamilton has proposed new legislation to tighten the law but it remains to be seen whether this will be adopted but in the meantime if you have any concerns on the matters discussed in this article please contact Elyse Palmer of Mayo Wynne Baxter on 0800 84 94 101

As you may recall, last September we celebrated Harry Summerton’s 90th Birthday and how thankful we were that he was still part of #TeamMWB.

Harry joined Mayo Wynne Baxter in April 2000 as our Librarian at the fine age of 69 and he has been a most wonderful colleague for the last 21 years!

Throughout his time with us Harry has witnessed the changing world of working life and almost continuous technology changes – something he is fascinated by.

But now it seems, it is time for him to shelve our books for us one last time, as today, Wednesday 27th October 2021, is Harry’s last day working with us at Mayo Wynne Baxter.

He is off to pastures new, to be closer to his family and no-doubt bless many others with his wonderful personality. No doubt we will hear of many more remembrance events and clubs that he will join as soon as he settles, he is a social magnet!

Mayo Wynne Baxter HR Director Clare Smith asked Harry if we could share this special occasion with our clients and his reply was;

“I shall miss the job and many things associated with it…

I shall be very happy for MWB to publicise my departure as it will, I hope, show people that employee/employer relationships still exist on a very positive level. Good Companies can win these accolades!”

We will miss you Harry and are proud to recognise your retirement and the great contribution you have made to Mayo Wynne Baxter in your role and as a friend over the years.

Read more about Harry here:

When do you create a Memorandum of Understanding?
It is a common occurrence: you’ve had exploratory discussions with a potential supplier/investor etc., leading to an understanding of core issues that justifies starting serious negotiations. You don’t want the understanding fixed in stone just in case you need to renegotiate, or the negotiations go nowhere.

Meanwhile, the supplier wants to rely on that understanding – either because there is no point in further negotiating without it or because it needs to spend money on the next stage and is only willing to do that if the understanding can be relied upon.

So, despite having diametrically opposed motives, you both sign a memorandum of understanding (also known as a ‘heads of terms’, and sometimes as a ‘term sheet’). It is written loosely to accommodate the contradictory motives.

Key benefits
Typically, memorandums (or memoranda) focus on headline topics: who, what, where, when and how much? Stage two of negotiations cover the 1,001 points of detail that are essential for a contract to actually function as intended (e.g., quality standards, ordering/delivery process, invoicing, problem resolution, etc.)

Drawbacks
Problems arise when stage two never happens or goes nowhere, but one of the parties has begun to take (expensive) steps in expectation of a contract. Their fall-back position is to claim the memorandum was a binding interim agreement, not a non-binding record of negotiations. Where such cases end up in court, the judge will go back to the very basics of contract formation.

The starting point is that a contract is automatically formed when two parties who are (i) able to form a contract (e.g., not 5-year-olds) want to (ii) do something legal, with (iii) the intention of forming a legal relationship to do it (negotiating an imaginary deal doesn’t count) and (iv) have agreed on enough core terms to allow the contract to actually be carried out and (v) one of them has made an offer to deal which the other has accepted and (vi) some form of benefit has been exchanged or promised between them (otherwise one is simply making a gift to the other).

Common mistakes with Memorandums of Understanding
The mistake businesses make is to assume that merely by entitling a document a memorandum, they automatically sidestep the above contract formation test. That is incorrect. If the above requirements are met, then a contract is formed – which could be very bad news for one of the parties – if only because not all the important terms would have been covered in the memorandum.

Are Memorandums of Understanding legally binding?
The cases that come before the court are invariably those where one party says the memorandum is legally binding, but the other disagrees. In such cases the court has basically applied the old abductive (no pun intended) test: if it looks like a duck, walks like a duck and quacks like a duck then it probably is a duck. This means that the more the memorandum looks like a contract, the more likely it is that the court will agree with the party claiming that it is a binding contract.

To avoid this, make sure that your memoranda are not written as if they were contracts: consider not signing them; try not to use wording like ‘the parties have agreed…’ or ‘the parties shall…’. Make sure that the memorandum is headed ‘subject to contract’ and is liberally sprinkled with reminders that it is not intended to be legally binding. Of course, if you want the option to be able to claim that the memorandum is binding, then write it as if it were a contract.

If you would like further advice or information our specialist Commercial Team would be pleased to hear from you and can be contacted on 0800 84 94 101 or email enquires@mayowynnebaxer.co.uk.

Why and how to complain about medical negligence
If you think that you may have a claim for medical negligence, it can be difficult to know what to do next.

This short article aims to provide you with guidance on why, in the first instance, it is important that you consider making a formal complaint to the hospital/GP practice involved, and how to do that.

Why should I make a formal complaint?
Making a formal complaint gives the Trust or GP practice an opportunity to investigate your concerns and provide a response. They may conduct a formal investigation into what happened and provide you with a written explanation or apology. A formal complaint may also prompt the hospital or GP practice to evaluate if any lessons can be learnt from your experience and what measures can be put in place to prevent the same issues happening again.

The response you receive may help you decide whether you wish to pursue a potential claim.

Having a formal response to your complaint is also very useful when you approach our Medical Negligence Department, as it will help us to assess the merits of your potential claim. This is particularly true where the Trust/GP practice has conducted a formal investigation, as this will provide an indicator of how seriously the issues are being taken and whether they admit any failings in care.

Who is allowed to make a complaint?
Anyone who has received services from the NHS can make a complaint.

It is also possible for someone to make a complaint on another person’s behalf if that person:

Has died,
Is a minor,
Does not have the physical and/or mental capacity to complain, or
Has asked you to make the complaint on their behalf.
How do I make a formal complaint?
To make a formal complaint, you will need to write to the Trust/GP practice setting out your concerns. Some helpful tips can be found below on what you could include in your complaint.

If your potential claim relates to an experience you had at a hospital, then you should write directly to the NHS Trust that governs that hospital.

If your potential claim relates to an experience you had at your GP practice, you should write to the practice and address your letter to the Practice Manager.

For any private treatment received, you should approach the clinician who treated you for a copy of their complaints procedure.

How long do I have to make my complaint?
It is advisable that you make your complaint as soon as possible. Your complaint should normally be made within 12 months of the date of the event that you are complaining about, or from the date that you found out about the problem.

In some circumstances, it may be possible to make your complaint after 12 months if there was a reason why you could not make one earlier. For example, this could be if you were still recovering from an injury or grieving.

Whilst it may be difficult at first, you should try to keep a record of dates, times, names and events so that you can refer back to them when making your complaint. If necessary, you can ask the healthcare provider for access to your medical records.

Medical negligence complain checklist
Include full details of what happened with dates, approximate times and who was involved;
Try to be as accurate as possible;
Set out your concerns and what you think went wrong;
Outline what you would like done about your complaint – for example, an apology, or an investigation into the issues;
Keep the tone of your complaint clear, concise and neutral;
If you are writing on another’s behalf, ensure to include their personal details as well as your own.
You should avoid mentioning solicitors or threatening litigation in your complaint.

Other sources of assistance
The Patient Advice and Liaison Service (‘PALS’)
PALS offer confidential support and guidance on a range of health-related topics. They can answer health-related questions and assist you in resolving any concerns regarding an NHS service.

PALS can also guide you through the NHS complaints procedure.

To locate a PALS office near you, you can visit their website (https://www.nhs.uk/service-search/other-services/Patient-advice-and-liaison-services-(PALS)/LocationSearch/363), ask your GP or contact NHS 111.

Healthwatch
Healthwatch is an independent charity which advocates for people who use health and social care services. They listen to patients’ experiences and share the views of local people with professionals to improve services. There are 152 Healthwatch organisations in England, including ones in East and West Sussex.

www.healthwatch.co.uk

Citizens Advice Bureau (‘CAB’)
The CAB also provides some excellent advice on how to make an NHS complaint and the processes that are involved. You can visit their website at www.citizensadvice.org.uk

If you think that you may have a claim for medical negligence, or are not sure what to do next, our Medical Negligence Team would be pleased to speak with you. Details of how to contact us can be found here.

Sam Durrant, Paralegal

July 2021

Often grandparents are closely involved in their grandchildren’s lives and upbringing, and as a result they are often the first port of call when the parents are having difficulties or are struggling to care for the children themselves.

Legal routes available
Child Arrangement Orders
The term ‘custody’ no longer exists in relation to Orders for children to live with a specific person. Under section 8 of the Children Act 1989, a type of Child of Arrangement Order called a ‘live with’ order can be applied for which determines, as the name suggests, the individual(s) with whom a child should live.

Special Guardianship Orders
Alternatively, Special Guardianship Orders can be obtained under section 14A(1) of the Children Act 1989 in certain circumstances and were introduced to bridge the gap between Child Arrangement Orders and adoption as they provide a stable and permanent home to a child without legally severing the ties to their birth parents. Sometimes this makes it a more suitable approach.

What is required to apply for Orders?
If grandparents wish to apply to the Court for orders in relation to their grandchildren, it is compulsory that they first attend a Mediation Information and Assessment Meeting (MIAM) with a qualified family mediator, to see if matters can be resolved using alternative dispute resolution, avoiding the need for Court proceedings. Where the parties are unable to reach an agreement, the mediator will issue an FM1 form which must be sent to the Court with applications. Grandparents will be exempt from attending a MIAM if emergency proceedings have been issued, or the Local Authority is issuing care or supervision proceedings in relation to the children.

Do I have an automatic right to apply?
In most circumstances, grandparents do not have an automatic right to apply to Court for orders concerning their grandchild, and it is likely that the permission of the Court will need to be sought.

However, there are exceptions to this rule, and in the following circumstances, grandparents do not need to apply for permission of the Court first:

Where the grandparent is already named in a Child Arrangements Order as the person with whom the child is to live.
Where the child has lived with the grandparent for at least 3 years, not necessarily continuously, but not more than 5 years previously. Residence with the grandparent must not have ended within three months of the application.
Where you are a relative and the child has lived with you for at least 12 months immediately prior to your application.
Where there is a Child Arrangements Order already in force and the grandparent has the permission of each person who is named in the order as a person with whom the child should live.
The grandparent has the permission of those who have Parental Responsibility for the child (if any).
The grandparent has Parental Responsibility, for example, because they are named in a Child Arrangements Order as a person with whom the child is to spend time, but they are not named as the person with whom the child should live.
If you do not fall into one of the above categories, you would have to make an application to the court for permission to apply.

Who has Parental Responsibility priority?
All birth mothers automatically have Parental Responsibility for their children (unless the children have been adopted). Having Parental Responsibility gives someone the ability to make decisions in relation to the childs schooling, medical treatment etc. Parents who are married at the time of the birth, or subsequently marry, will both acquire Parental Responsibility, as do those who are named on a child’s birth certificate since 6 April 2009.

Grandparents cannot make stand-alone applications for Parental Responsibility. In the event the Court makes a ‘live with’ Child Arrangements Order or a Special Guardianship Order in favour of a grandparent, they will often make a Parental Responsibility Order at the same time, without the need for a separate application.

Special Guardianship vs ‘live with’ Order
A Special Guardianship Order is more secure than a ‘live with’ Child Arrangements Order because lasts until the child is 18, and a parent will need the permission of the Court to apply to have the Special Guardianship Order discharged. A Child Arrangements Order, on the other hand, will come to an end when the child reaches 16.

A Special Guardianship Order does not bring the legal relationship between the parent and their child to an end, and Parental Responsibility will not be removed from the parents. Special Guardianship Orders give Special Guardians an enhanced form of Parental Responsibility which can be exercised to the exclusion of others, save for specific exceptions. For example, Special Guardian’s cannot act independently of parents with Parental Responsibility in matters where their permission is required by law, for example, sterilisation or circumcision of the child, adoption proceedings, change of the child’s name or removing the child from the UK for more than 3 months.

Permission to apply for Child Arrangement / Special Guardianship Orders
If an application to the Court for permission to apply for a Child Arrangements Order or Special Guardianship Order is made, notice must be served on anyone who has Parental Responsibility for the child, which in certain circumstances can include the Local Authority.

What is a Viability Assessment?
Where there are serious concerns about the parents’ care of the child, or there is ongoing care, emergency protection or supervision proceedings, the Local Authority will often carry out an early Viability Assessment of grandparents, to assist in their decisions about who should care for the child. The Court will place significant weight on such assessments. Grandparents can apply for the leave of the Court to make an application, and to be joined in any ongoing proceedings, in order for the Court to consider their application for Special Guardianship.

What is assessed?
For the Court to grant permission to a non-parent to apply for a ‘live with’ Child Arrangements Order or Special Guardianship Order, there must be compelling reasons to depart from the presumption that the child will be better cared for by a biological parent. The Court takes into account the welfare of the child, but at this stage it is not their paramount concern. The Court must also consider:

The nature of the application being made.
The grandparent’s connection with the child.
Any risk that the application will disrupt the child’s life to such an extent as to cause the child harm.
Where the child is looked after by the Local Authority, what plans are in place for the child, and the parents’ wishes and feelings.
Once permission to apply is granted
If the Local Authority is not already involved with the children, once you have the permission of the Court to make an application for a Special Guardianship Order, you must serve the Local Authority with notice of your intention to apply, three months in advance of issuing it at Court. This notice triggers the Local Authority to prepare a detailed report, without which a Special Guardianship Order cannot be made.

The Report will deal with background information about the child, family and prospective Special Guardians, the child’s wishes and feelings, their cultural and religious upbringing, and arrangements for contact with relatives and other relevant people. The report must take account of any harm the child has suffered, or the risk of harm posed by the parents in future. The report also considers the implications for the child, alongside the child’s current and historic relationship with the proposed Special Guardian, and will assess the merits of making an Order. The report will also need to comment on the parenting capacity of the proposed Special Guardian and how the proposed order might meet the child’s long-term needs. The report will provide the Court with recommendations.

The Local Authority must also provide support services, such as respite care, counselling, and financial support for Special Guardians, and must make an assessment of what is needed and what can be provided. These assessments can be challenged, and so it is important for potential Special Guardians to obtain legal advice if they are unsure whether the support offered to them by the Local Authority will meet their long-term needs. In some circumstances Local Authorities can offer alternatives to Special Guardianship Orders, such as kinship fostering arrangements.

If you would like further advice or information concerning grandparents’ rights our specialist Family Team would be pleased to hear from you and can be contacted on 0800 84 94 101 or email enquires@mayowynnebaxer.co.uk.

In this modern era, social media has become an essential and powerful tool for almost all businesses.

Various platforms such as Instagram, Twitter and Facebook, to name a few, provide an excellent platform for well—established businesses, small companies and start-ups to promote their products and services whilst engaging directly with clients and customers.

Companies can be available 24/7 and use these platforms for marketing and publicity. It is a world of instantaneous connection and global exposure.

Threats to your business’ intellectual property
Although there are seemingly endless possibilities and considerable benefits to having a large and diverse presence on social media, there are many issues that may threaten your business’ intellectual property (‘IP’).

1. Your intellectual property is stolen
As much of the content on the web is easy to access, it can seem to many that it is free to use. However, the majority of the images online are copyrighted. Unauthorised use of images could mean that you are breaking the law or that someone is committing an offence by using your IP without authority.

2. You use copyrighted material
Improper use of social media can lead to breaches in the law relating to IP, particularly copyright and trademark.

While knowledge in this area is increasing, you would not want to breach the relevant laws unknowingly as the consequences can be severe. You also want to ensure that your IP is adequately protected and that your employees are aware of what to look out for in terms of infringement.

Creating a social media policy
To protect your business’s identity and rights online, you should establish and implement a policy for using social media and keep this up to date.

As social media develops rapidly, it is difficult for the law to keep up. Many of the existing law was established without social media in mind, particularly in relation to the sophisticated platforms available widely today.

The following initiatives should be implemented as a first step towards protecting your IP Rights on social media platforms.

Create and publish a statement relating to your IP and ensure that your employees are aware of it.
Consider the particular threats to your business and develop a strategy to identify and deal with any issues as they arise.
Check your social media accounts regularly to ensure that they are secure. If your accounts are hacked, this may compromise your security, the information communicated from your account as well as any data held within the account.
Businesses need to recognise that their IP is a valuable asset and treat it as such. Some small companies and start-ups sometimes only have social media accounts and do not have a separate website, and the consequences can be devastating if these are compromised. What would be the cost and long-lasting effects for your business if your account was hacked or if you lost access to your social media accounts?
Ensure that nothing you share or promote infringes any copyright law or the trademark belonging to another business.
Keep up to date with the changes in the laws around social media and IP and adjust and adapt your policies and strategies accordingly.
In summary, it is essential to recognise the value of your IP and the importance of it to your business.

If you need advice on the matters raised, such as IP infringement, please contact our Dispute Resolution team on 0800 84 94 101

The recent spate of headline grabbing articles would have us all believe that if a commercial tenant is in arrears of rent there is nothing you can do until 22 March 2022.

This is wrong.

So, let’s look behind the headlines and figure out what steps you can take. There are a number of solutions if your aim is limited to recovery of rent arrears. If your aim is to obtain possession, I shall also set out a strategy which may be available to you which does not fall foul of the current restrictions.

Solutions to commercial rent arrears
If you have a Rent Deposit, you can draw down on that deposit. You do not need permission from the tenant but there is likely to be a procedure to follow set out in your Rent Deposit Deed.
Consider if there is a third party on the hook. Is there a former guarantor or a former tenant who has assigned the lease but remains liable? On this point, act quickly. If you want to pursue a former tenant or former guarantor you must serve a section 17 Notice under The Landlord and Tenant (Covenants) Act 1995. However, any arrears that are older than 6 months cannot be pursued by way of a section 17 Notice although you can serve successive Notices to overcome this.
You can issue court proceedings and obtain a judgement for the arrears. Whilst there remain restrictions on the recovery of a Judgment debt, the tenant may not want a judgment against it which may subsequently affect its ability to obtain credit thus encouraging the tenant to prioritise the rent to you.
As at the date of writing, where the arrears exceed an amount equivalent to 554 days’ rent you can use Commercial Rent Arrears Recovery (CRAR). CRAR is a method of enforcement whereby the landlord recovers arrears from tenants by seizing and selling their assets without going to court. Advance warning must be given and it is best left to the experts. There are many bailiffs out there willing to help and advise if CRAR can be used.
Another enforcement method still open to landlords is to serve a Statutory Demand requiring payment within 21 days failing which you may be able to take steps to make them bankrupt or to up the wind the company. Given the present restrictions in place on the right to present debt-related winding-up petitions where a company cannot pay their rent because of the impact of Covid19, this is not likely to be a very favourable option.
Finally, and this is perhaps the most costs effective option, if you have a tenant who is genuinely in trouble in consequence of the restrictions on its ability to trade arising from the various lockdowns, but otherwise you think has a viable business, talk. Talk and try to agree a payment plan. Currently, you cannot evict the tenant based on arrears of rent due to Covid19 so trying to agree something is better than nothing.
An alternative strategy if your aim is to obtain possession.
Current legislation prohibits the landlord from forfeiting a lease because of unpaid rent (and there is a wide definition of rent under the legislation so for ‘rent’ read ‘any money due under the lease’). However, where you have a tenant who has difficulty meeting their financial obligations under the lease there is reasonable possibility that they are also failing to meet their repairing or decorating obligations.

If you think your tenant falls into this category, check your lease. If you have a right to enter to inspect the condition, then do so. If the property is in disrepair, you can serve the requisite Notice Before Forfeiture (section 146 Notice under The Landlord and Tenant Act 1925) giving the tenant a reasonable period to do the repairs required under the lease.

If your Notice is valid and the tenant fails to do the repairs within the timescale then you can forfeit the lease and, in most cases, you may be able to do that by peaceable re-entry rather than having to obtain a court order. There are a few pitfalls to be aware of if you adopt this method so take advice and get your ducks in order. This procedure could well save you thousands if you are confident that you can relet your property to someone who can pay their rent.

If you need help with any of the above issues, then get in touch.

We are here to help – 0800 84 94 101

How to get out of a Commercial Lease early?
For many Tenants there may come a time when they need to consider how they can get out of their existing Commercial Lease. There could be any number of reasons why this might be necessary including expansion, financial hardship, relocation or a breakdown in Landlord/ Tenant relations. Whatever your reason for wanting to end your Lease, it is the Lease itself which will determine the options available to you.

The most common ways to bring a Commercial Lease to an end can be put into two categories as follows:

­Termination – a clean break
Break Clauses
You may have been alert to the possibility of a change in circumstances when you first agreed the terms of your Lease and (sensibly) negotiated a Break Clause. A Break Clause will allow you to terminate the Lease on a fixed date (or sometimes on a rolling basis) upon serving a certain amount of notice on your Landlord (commonly 3-6 months).

When exercising a break, it is important to strictly adhere to the terms and conditions of your break clause as otherwise your Landlord may refuse your right to break. Common conditions include that all rent and other sums due under the Lease have been paid up to date, that you have complied with your repairing obligations and that you hand the property back to the Landlord free from your occupation and any subsisting tenancies.

It is prudent to make sure you have complied with any terms and conditions attached to your break option and to ensure that you serve your break notice in good time (which should include a few days for service of the notice). You should always check the notice provisions in your Lease to check that the Break Notice is served properly.

Negotiate a surrender with your landlord
If your Lease does not include a Break Clause or you have missed your opportunity to break your Lease (i.e., your break date has passed) you may consider approaching your Landlord to agree a surrender.

This option also gives you a clean break as all of your liabilities will come to an end (provided you negotiate a proper Deed of Surrender for which it is advisable to instruct a solicitor) upon completion of the Surrender of the Lease.

It is important to note that very rarely (unless your Lease contains a separate termination clause – which is unusual) will you have a right to insist that your Landlord agree to a Surrender. You will therefore need the agreement of your Landlord to Surrender the Lease and your Landlord may want you to pay a premium in return for their agreement to end the Lease.

Replacement – ongoing liability
Assignment i.e., transferring your Lease to a third party
If you are unable to obtain a clean break or you believe there is some value in your Lease which you want to capitalise on, you may consider transferring the Lease to a third party.

The majority of Commercial Leases will permit assignments but will often only permit the same with the consent of the Landlord which usually cannot be unreasonably withheld or delayed.

There will likely be a number of conditions attached to the Landlord granting consent to an assignment and the most common condition is that the outgoing Tenant provides an ‘Authorised Guarantee Agreement’ (an ‘AGA’) which ensures that whilst the Lease is transferred to a third party the outgoing tenant will remain ‘on the hook’ should the incoming tenant fail to comply with the tenant covenants in the Lease during the term.

You do therefore need to be aware that you could be called upon during the remainder of the term to comply with the tenant covenants and in some circumstances take a new Lease for the remainder of the term or pay a lump sum (often equivalent to six months rent) to the Landlord.

If you are considering an assignment, it is therefore very important that you properly investigate the proposed assignee by checking their financial position as the assignee will only be as good as the security, they are able to provide.

Underletting
An alternative to an assignment is to underlet the property i.e., to grant a Lease (known as an ‘Underlease’) out of your Lease.

If permitted by your Lease this will often require you to obtain Landlord consent before underletting the property and again your Landlord’s consent will often not be able to be unreasonably withheld or delayed provided you comply with certain conditions. The conditions attached to an underletting are often not dissimilar to that of an assignment.

It is important to note with an underletting that your Lease remains in place, and you are therefore still liable to your Landlord for the tenant covenants in your Lease. By granting an Underlease you are allowing another party to occupy the property in return for paying the rent and complying with your obligations on your behalf, but you remain liable to the Landlord

Summary
If you are considering your options in relation to ending your Commercial Lease you should ask a solicitor to review your Lease and confirm the options available to you.

Mayo Wynne Baxter have a team of Commercial Property specialists who would be happy to help.

Please call 01273 477071 for more information.

Government announces Ground Rent reform to tackle leasehold problems Leasehold Reform (Ground Rent) Bill
Enter the Leasehold Reform (Ground Rent) Bill, which will apply to new long leases (subject to some exceptions such as business leases). Under the new rules, a landlord cannot require the leaseholder to make a payment of ‘prohibited rent’.

A prohibited rent will be anything more than a peppercorn.

This will mean that freeholders will not be able to demand a financial ground rent under new leases, doing away with the current model of annual financial payments with no link to a tangible service by the freeholder.

This is designed to make the system fairer for leaseholders and is likely to spell an end to the practice of the sale of long leases to leaseholders, with the freehold being packaged up and sold as a financial investment to third parties.

An interesting implication of the proposed Bill is that the rules may apply to a lease which is varied, for example by altering the lease plan to enlarge the demised premises. From this point the lease could be deemed a new lease under the new rules, rendering the ground rent provisions within the lease unenforceable.

The Bill is however in its early stages and will be subject to debate and amendment, though it marks an important first step in implementing proposals put forward by the Law Commission to reform leasehold.

Ricky Coleman is a Solicitor within the Leasehold Enfranchisement team at Mayo Wynne Baxter. The team regularly advises on problematic ground rents such as doubling ground rents, along with related issues such as the Public Pledge and lease extensions generally.

Ricky can be contacted by email to rcoleman@mayowynnebaxter.co.uk or by calling 01273 407459
12th May 2021 marked the beginning of the first steps by the Government to formally initiate changes to the leasehold system following the report by the Law Commission into this area of law, by toughening up the rules on ground rents.

Many affected parties have been waiting for progress since the Government’s blockbuster press release in January of 2021, which suggested sweeping reform to leasehold legislation. Since then, however, there has been little in the way of detail as to the timings or scope of any legislation.

Some have paused pending lease extension or collective enfranchisement claims to wait and see if savings can be made, although no one can be certain when the reforms may be enacted in law and what the new rules might look like. Uncertainty abounds.

Family Trusts
The legal definition of a “trust” generally sends lay people and professionals alike into convulsions of fear and beads of sweat, but fear not, well drafted Family Trusts can be a very useful vehicle for protecting not only assets, but also the beneficiaries themselves.

So how do Family Trusts work?
Firstly, the person creating the trust is known as the “settlor”. This is the person who transfers their asset(s) into the trust and details who the Trustees will be and who the Beneficiaries are. The Settlor will also provide the Trustees with various “powers” to deal with the administration of the trust.

What is a Trustee?
The Trustees should ideally be responsible people who have been entrusted to manage the trust funds for the benefit of someone else. The Trustees must act in the best interests of the beneficiaries. In the ideal world, the Trustees should be impartial and have no personal interest in the trust funds. Should Professional Trustees be appointed, it is likely that they will charge for their services. This may seem an expense many Settlors wish to avoid but appointing Professional Trustees will guarantee the trust is administered correctly.

What is a Beneficiary?
The Beneficiaries are “chosen” by the Settlor and in most situations, it will be descendants of the Settlor (children/grandchildren), but it is for the Settlor to decide as to whom they wish to nominate as Beneficiaries.

What is a Settlor?
The Settlor may determine, within the trust document, which Beneficiaries are to benefit and when (and how much) they are to benefit. However, it is possible that the Settlor may decide to leave these decisions at the discretion of the Trustees.

Once the Settlor has transferred the asset(s) into the trust, they will be managed by the Trustees (who will “legally” own the trust asset(s)). The advantage of this “transfer”, is that should the Settlor exclude themselves (as well as their spouse/Civil Partner and minor children), then the value of the trust would not be regarded as part of their estate for Inheritance Tax (should they survive 7 years from the creation of the trust).

What are the benefits of a Family Trust?
Assets within the trust are also better safeguarded than they would be if a simple gift had been made to the beneficiary. A beneficiary’s own assets, for instance are vulnerable in the event of divorce or bankruptcy. Assets held in trust are not completely immune from such events but are certainly better protected compared to personal ownership.

The Settlor may regard a beneficiary as “vulnerable”, such as being a spendthrift, or they may not have the physical or mental attributes to manage their own affairs. In such instances, placing funds in trust for their benefit may be advantageous, as the Trustees would be in a better position to facilitate payments to the beneficiary.

Different kinds of Family Trust
The term “Family Trust” can have a plethora of meanings, as there are a variety of trusts that may be created by the Settlor:

Discretionary Trust
Interest in Possession Trust (also known as a Life Interest Trust)
Bare Trust
Disabled Person’s Trust
Will Trust
It is therefore essential that great care should be taken before considering which type of trust is most appropriate for the Settlor (and also the beneficiaries). Advice on the creation and implementation of Family Trusts should be sought from either a qualified Lawyer or Accountant, so there are no unwanted surprises for the Settlor, the Trustees or the beneficiaries.

If you would like to discuss any of the above, please do not hesitate to get in touch with the Private Client team – 0800 84 94 101