Reforming the leasehold and commonhold systems

Reforming the leasehold and commonhold systems

In January 2022, the UK Government launched a consultation on reforming the leasehold and commonhold systems in England and Wales, seeking views on the Law Commission recommendations made in July 2020.

The Leasehold Reform (Ground Rent) Act 2022, which abolished ground rents in the majority of new residential long leases, came into force on 30 June 2022, marking the “phase one” of the leasehold reform programme.

Aside from the ban on ground rents, there has been no clear statement from the Government on its timeline for leasehold reform or a formal response to the Law Commission’s detailed proposals.

A recent House of Commons debate on leasehold and freehold reform which took place in January 2023, confirmed that the Government is committed to deliver phase two of the leasehold reform programme.

Leasehold and commonhold reform remain on the Government’s agenda and developments are expected within this Parliament.

The Secretary of State at the Ministry of Housing, Communities and Local Government has recently confirmed that the Government wants to introduce legislation later this year to change the leasehold system. It has been suggested that the Government may remove the leasehold structure entirely, but there has been no mention of any alternative structure for the ownership of residential flats.

Commonhold has been in existence in England and Wales since 2004, but has not seen a significant take-up. The Law Commission recommended a greater move to commonhold as the alternative to the leasehold system, but there are a number of legal complexities that need to be considered.

The Government intends to make changes to the Enfranchisement, Right to Manage and Lease Extension procedures, including reducing the premiums payable for lease extensions under the Leasehold Reform, Housing and Urban Development Act 1993. However, the Government’s timeline for these changes has not been yet announced, and the legislation which the Government intends to introduce is still awaited.

Sayrha

Sayrha Elahi

Senior Associate

Howard Colman attends IR Global ‘On the Road’ conference in Bangkok

Howard Colman attends IR Global ‘On the Road’ conference in Bangkok

TH03 2023 0944 1 1

Howard Colman, a Founding Partner of Colman Coyle, and IR Global Member of the Year 2022, has recently returned from a productive and successful IR Global conference in Bangkok.

Howard is the exclusive IR member for Commercial Litigation & Commercial Arbitration in England and a long standing member of the IR Dispute Resolution Committee.

This was the first IR Global conference in Asia for four years following the pandemic and provided a good opportunity to meet with professionals from around the world but particularly Asia and to learn about different cultural approaches to business and legal issues.

New business contacts made at the conference will add to the existing Colman Coyle portfolio of international network of professionals from around the world, which in turn will strengthen our global outreach and ability to advise clients on matters concerning other jurisdictions.

Howard is looking forward to attending the next IR Global conference in San Diego and will be joined by Oksana Howard, the exclusive IR Global member for Capital Markets in England and a member of M&A Committee at IR.

Please see below a selection of photos from Bangkok:

TH03 2023 0967 1 1 1 1
TH03 2023 2326 1
The Budget and Inheritance Tax 

The Budget and Inheritance Tax 

The Chancellor unveiled his budget on 15th March but from the point of view of inheritance tax and estate planning there was no new announcements.

It had been announced in the 2022 Autumn Statement that the inheritance tax thresholds would remain at their current levels until April 2028 and so this gives some clarity as to the position over the next few years.

On that basis it is worth summarising some key points.

For a married couple or those in a civil partnership, they have inheritance tax allowances of up to £1,000,000 between them available on death.  With this in mind, it would be important to ensure that your wills are up to date so as to maximise the use of these allowances.  This is particularly the case where one member of the couple had a previous marriage or civil partnership that ended on death.  If that is the case, there is the possibility of bringing in the deceased’s allowances too and so if this may be relevant to you, it would be important to take advice.

There are still steps that can be taken during someone’s lifetime to mitigate a potential inheritance tax liability.  Gifts can be made during someone’s lifetime to take into account their annual inheritance tax exemption.  Another exemption that tends to get overlooked is gifts out of surplus income, whereby, an individual can make a gift for inheritance tax purposes of any amount from their surplus income, but it is important to take advice on making this type of gift to ensure that it is recorded properly.

Various other lifetime exemptions are also available, including gifts in consideration of marriage or civil partnership, which again is an exemption which is often overlooked.  You can make a gift to either or both parties to the marriage/civil partnership which is exempt from inheritance tax, with the actual amount that is exempt depending on your relationship to the couple.

Again, it would be sensible to take advice on this and it should be noted that these exemptions can all be combined with each other so that relatively significant tax savings can be made over the course of time if gifts are properly planned.

Colman Coyle has considerable experience in advising in relation to lifetime tax planning and the preparation of wills and related issues and if you would like to discuss the issues raised here, please contact Patrick Green on 0044 0207 354 3000 or Patrick.green@colmancoyle.com.

Patrick Green

Patrick Green

Senior Associate

Q&A: Five minutes with David Bowers

Q&A: Five minutes with David Bowers

David Bowers panoramic

David qualified as a solicitor in 2015 and joined Colman Coyle as an Associate Solicitor in 2022. We sit down with him to hear his insight and ask a series of questions on his career to date.

Tell us about your journey to becoming an Associate Solicitor at Colman Coyle

My journey was anything but traditional. After ‘A levels,’ I worked full time for a year, before going to study law at university. As part of this degree, I took the opportunity to study abroad at one of the oldest universities in Europe.

This meant that I graduated in 2009, just when the financial crash meant that jobs, and in particular training contracts were scarce. I was luckily able to secure a paralegal role in a high street firm, before switching to (at the time) one of the biggest non-city firms in the country.

With jobs and training contracts still scarce, I decided to study the legal practice course on a weekend basis. This meant two years spending every other weekend in Guildford, on top of my full-time paralegal role. I was able to secure a training contract in a large regional firm, qualifying in 2015 as a litigation solicitor. I stayed at the same firm and obtained a promotion to associate a few years later.

With an increasing focus on property litigation from day one, since 2019, I have focused solely on property litigation.

In 2022, I joined the leading property litigation team at Colman Coyle.

What does a typical working day include for you?

One of the most interesting aspects of property litigation is that there is no such thing as a typical day. Property litigation includes a spectrum of issues. All of which require different considerations and different approaches.

Each client is unique and building a relationship with clients is key. For this reason, much of the day is spent communicating with clients. I always prefer to speak over the phone if possible.

Alternative dispute resolution can often be used to secure the most advantageous and cost-effective resolution of the dispute.  Quite often I am involved in different methods to resolve a dispute.

Property litigation is focused on meeting deadlines. The court sets the timetable towards trial. The timetable will commonly include exchanging witness statements or expert reports.  Each step usually requires analysing documents, liaising with various parties and drafting court documents.

What is the most important lesson you have learned in your working life?

Working as a solicitor is about gaining knowledge, experience, constantly learning new skills and improving old skills. This never stops and continues throughout a legal career. I take a critical approach, reflecting at every opportunity and considering what I have learnt, how can I adapt and change in future.

A critical approach ensures that I maintain up to date skills and knowledge. This allows me continuously to achieve the ultimate objective for a property litigation solicitor, to understand the client’s objective and achieve the most advantageous result possible.

What do you do to relax?

I like to be active and enjoy the outdoors. On a Saturday morning I can usually be found at my local parkrun. On a Sunday afternoon, I enjoy hiking or cycling, usually through the Kent countryside.

What advice would you give to any aspiring solicitors?

A career in the legal profession can be challenging, initially to gain the experience required to enter the profession, and then after qualification with different demands. However, it is overcoming these challenges that makes working as a solicitor so interesting.

There will always be setbacks. Try and see these as learning experiences and consider what you can learn from them.

Make as many connections as you can. Attend training events, open days, speak to as many solicitors as possible. After connecting, develop a professional relationship.  This allows you to build your own network.

What are the issues facing property litigation today?

2022 was another turbulent year for property litigation. 2023 looks to be just as turbulent.

The emergency legislation introduced during the covid pandemic has slowly come to an end. However, flexible hybrid working remains more widespread.

Inflation is running at a 40 year high, there are rising interest rates, and warnings of a recession.

The cost of occupying commercial premises is likely to be a significant overhead for most businesses. Therefore, tenants may start evaluating their property portfolios, to identify where savings can be made. This may see a rise in tenant’s exercising break clauses.

The commercial property market has already proven to be resilient and capable of change. Landlords may need to consider the type of properties within their portfolios. Will there be a rise in converting commercial buildings to residential purposes, or will the trend for flex space letting for commercial tenants gain more traction?

With a recession, rent arrears are likely to increase. Without government interference as seen in recent years, there is likely to be an increase in forfeiture claims.

What are does the future hold for property litigation?

Commercial

From the 1st of April 2023, the next stage of the Minimum Energy Efficient Standard (MEES) comes into effect. This means that subject to certain exceptions, landlords of commercial properties must not continue to let a property with an EPC rating below an E. By 2030, the bar for MEES will be raised to an EPC B rating.

Both commercial landlord and tenants will need to consider the EPC rating of their property and the terms of the lease. This will involve considering what improvements to the property are necessary to meet the raising MEES requirements, and a careful analysis of the terms of the lease to confirm who will fund these works.

It is likely that environmental issues will become a more frequent issue in dilapidations claims and 1954 Act renewals.

Residential

Leasehold reform continues to be on the government’s agenda. The process has already started, most recently the Leasehold Reform (Ground Rent) Act 2022, prohibited new ground rents.

More reforms are expected; however, the extent of these reforms is currently unknown.  The complete abolition of leasehold has been reported in several newspapers after Michael Gove vowed to “scrap the feudal leasehold system.” The reforms are perhaps unlikely to go this far.

Instead, reforms are likely to focus on reducing the cost of extending leases and making it easier for leaseholders to take over their buildings.

The cost-of-living crisis may result in greater political pressure to help renters. A Renters Reform Bill may be introduced in 2023. The proposals include ending no fault evictions. This may lead to landlords considering whether they wish to continue to rent properties out.

You can read more about David’s work and profile here. If you are interested in our property litigation services and would like a quote, please contact David on +44 (0)20 7354 3000 or david.bowers@colmancoyle.com

Howard Colman to attend 2023 IR Global ‘On the Road’ conference in Bangkok

Howard Colman to attend 2023 IR Global ‘On the Road’ conference in Bangkok

Bangkok1
wat arun temple twilight bangkok thailand

Howard Colman is delighted to represent Colman Coyle at the IR Global ‘On the Road’ conference in Bangkok.

Following on from the highly successful annual conference in Barcelona, at which Howard Colman won IR Global Member of the Year, the ‘On the Road’ conference provides a great opportunity to network with the 150 delegates attending, many of whom we have met before and work closely together on cross referral work.

Howard is the exclusive IR member for Commercial Litigation & Commercial Arbitration in England and a long standing member of the IR Dispute Resolution Committee. Howard and Colman Coyle have made a substantial contribution to the development of the organisation since the firm joined the network at its inception in 2010.

Colman Coyle’s International Department works closely with the IR network in Asia, which has been particularly helpful for our clients for us to be able to introduce them to, and work with, lawyers in the region.

If you have any questions or would like to meet with Howard during the conference, please email howard.colman@colmancoyle.com.

Colman Coyle offers pro-bono legal services to the Ukrainian refugees with limited financial means wishing to set up a business in the UK

Colman Coyle offers pro-bono legal services to the Ukrainian refugees with limited financial means wishing to set up a business in the UK

138158375 s

Sadly, today is the anniversary of the Russian attack on Ukraine. The war has resulted in many refugees fleeing the Ukraine and a significant number have set up home in the U.K.

A number of these have or are looking to set up businesses to support themselves and their families but they often have limited means.

In recognition of this, Colman Coyle has decided to offer pro bono legal help to anyone in this position to assist them in setting up their businesses and dealing with matters such as basic contracts and terms and conditions.

If you need help with setting up a business in the UK or if you have any other legal needs in the UK, please contact Oksana Howard at oksana.howard@colmancoyle.com

Oksana Howard

Loading...