Reminder To Lawyers – Don’t Do Favours, Don’t Accept Favours.

Reminder To Lawyers –  Don’t Do Favours, Don’t Accept Favours.

This week a case is reported which may give one or two Solicitors and Property Managers [or all of them] a timely reminder to review their practices and procedures.

As I am a retired Solicitor, having worked for many years in Bradford, which is a friendly place by and large, this pitfall could very likely have caught me too.

It relates to the complicated world of Leasehold Enfranchisement of flats and apartments.

What has happened is that a group of leasehold owners of flats in a large building has decided to buy the freehold. This is something they can only do because Statute Law defines the right which they have, depending strictly upon how many owners [what percentage of the whole number of leaseholders] have to be involved, how long the terms of their leases are, how many years they have to have already lived in their flats and many other scenarios and conditions.

Indeed it can be a big job for a professional advisor even to work out whether in any particular case, the right to buy the Freehold can be claimed.

The point is, the Leasehold Reform Housing and Urban Development Act of 1993 is a fairly long and very complex written Law. Every word in it is there for a reason and if you qualify, fine, and if not, you don’t. There are no grey areas, The Law is the Law.

As the policeman used to say, “I don’t make the Law, you know, I just enforce it. But I’ll tell you this – If the Law says Stand on Your Head then Over You Go Sonny”

OK, Got That?

Anyway, here is a link to a very clear Guide, placed on the internet by London Lawyers Pemberton Greenish.

So as you will see, once the Leaseholders have got together and decided to buy, they value the Building and serve a formal notice of their requirement to buy, which includes their offer for the purchase price. This is a process over which they may have taken years.

On the other hand there you now are, the Landlord, owner of the building, happily receiving your rents and living on your yacht [possibly!], when suddenly you get this horrible notice.

Crikey, you need to have a bit of a think.

And yet, the Notice you have received says that you are given only two months and a day to give your clear response in the form of a written counter-notice.

You have got a lot to do, in just two months and if you are the Solicitors acting for the owner, you will know the feeling of having to chivvy on your client, and surveyors and valuers to get their acts together and then inspect their reports and all the leases and value the land and buildings and assess the “marriage value”.

It is an art, not a strict science, to value the right price to be paid. Obviously if all the leases are for 1000 years, the value of the freehold is really just the amortized rent, given the tendency for human beings to die.

But on the other hand if the leases have only a few years to run before they are going to expire, the price will be a very great deal higher.

So it is not surprising – and it is in the nature of human behaviour in the face of deadlines – that all the necessary reports arrive at the last possible moment. And the Solicitor then has to prepare the Freeholder’s notice and get it signed and get it round to the leaseholder’s solicitors within the deadline time.

And if the last day for service is a Saturday, and if you ring up the other side on Friday and they say fax it over to us, and if their fax machine turns out to be broken, and if you telephone and a friendly chap called Dave answers and says “OK just email it to us for now and post it to us for Monday”, well that’s OK isn’t.

Although many Statutes deal with the need to give and receive notices, it is odd that there has until now apparently been no definitive ruling as to what “IN WRITING” means.

Of course in the 19th and early 20th Centuries and earlier there was no doubt. Writing meant on paper – or parchment. Vellum perhaps. But in the years since, now that electronic methods, fax, email, text, WhatsApp have existed, the law has been silent.

So whilst most lawyers will have prepared and sent notices on paper, what about a case like this, where time was running out? And in the situation where there seemed to be nothing in the law that said email was impossible?

I mean, you phoned, and you spoke to Dave, and he said “it will be fine – email it now and send the paper in as fast as you can”. Just like I might have done in Bradford.

So here is the case LINK HERE

And not surprisingly, it’s bad news for this particular landlord’s Solicitors.

This is the Judge’s reasoning:-

The Paper version with a signature – the “original” counternotice – landed on Monday, too late.

But the email had arrived in time, and Dave had said he would accept it. [But who on earth was Dave? Bloke in charge of paperclip procurement and fax machine maintenance poorly executed?].

And even if he had been the senior Partner, he has no power to waive the Law. [Stand on Your Head, remember?]

And the Law? That says “notice must be served”. And by implication [since the amending Act of 2014 says notices can be signed by agents as well or instead of the actual parties] the notice must be signed.

And, says the Judge that means it must be paper. Because an email or a fax cannot transmit an actual signature into the hands of the recipient. Only a scan of a signature. So, never mind that Dave was trying to help. The Law’s the Law. [S. on Y H.]

And whilst those of you in short trousers may think this is all very Luddite and that emails should have replaced all paper years ago, I think this decision is right.

After all, how many emails do you get every day? Hundreds? More? Dubious “Banks” wanting you to “refresh your details” – yeah right – and your Garage saying your car needs a service, Amazon asking you for an unpaid review of the camera you bought last year and on and on.

The Court is saying, we don’t blame any busy solicitor for deleting the lot of them. And if it includes a legal Notice from a Freeholder, so what. He should have written.

In this case, a very expensive lesson to learn. Because the delay means that the Freeholder has lost the right to negotiate on price and has to accept the Leaseholders’ first and presumably lowest offer. In London that could mean millions lost.

See the heading, and Don’t Do Favours, and Don’t Accept Favours. There are no shortcuts.

But there is a link, here Write a Letter. Take it round by hand. Ignore Dave.

As ever, do contact me or Christopher Atkinson here at AtkinsonNotary [0113 816 0116 or notary@atkinsonnotary.com or www.atkinsonnotary.com ] where we shall be more than happy to assist and help you through the maze whenever you have paperwork to be processed for foreign countries.

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House Theft. Oops They Did It Again. As You Were, On Conveyancing Fraud.

House Theft. Oops They Did It Again. As You Were, On Conveyancing Fraud.

In October 2016 I wrote this Blog. Link Here.

It referred back to my Blog of May 2016 Link here

To remind you, those Blogs were discussions of two cases with similar facts. Both dealt with the increasingly prevalent crime of Real Property theft by fraud. Pretending to own a house, and “selling” it.

Increasingly in England, a Country where title deeds written on paper have been abolished, criminals are realising that confidence-trickery is back in fashion

Employing the same techniques as those persons who used to meet people at the railway station in Blackpool and sell them the Blackpool tower, millions of pounds are being stolen.

A Crook’s manual – Basically, you find an empty property of high value. There are loads of them. Buy the title register entries from the Land Registry and you will eventually find one with no mortgages charged. And it will tell you who you need to pretend to be.

Forge a driving licence and TV licence or just forge copies and add a forged “true copy” certificate in the name of a High Street Solicitor and you are in business, ready to find a Buyer and instruct a Solicitor.

In May 2016, poor old Mr Purrunsing dropped £470,000.00.

The Court agreed that his solicitor and the “Seller’s” Solicitor –that is, the lawyer who did not know that his client was a crook –  had done nothing seriously wrong: they had been fooled just as much as Mr P. But the Court with the benefit of hindsight said both Solicitors could have been criticised for being a more little focussed on the need to complete the transaction rather than on the risks. (Bear in mind that both Solicitors would have been under the usual constant client pressure to rush to completion)

On the basis of no better law than a general feeling of sympathy with Mr P and a feeling that neither Solicitors was more obviously at fault than the other, the Court made both firms of lawyers cough up half each to reimburse him.

What nonsense, I suggested.

Will the courts in future suggest that Solicitors should reimburse their clients if ever they get burgled in their new homes? What with it being awful bad luck and all?

But in October I was saying Hurray, or is it Hurrah, because common sense had raised its lovely head.

Here, on pretty much identical facts of a fraudster legging it with over a million pounds, the Courts said – we have sympathy with the victim of this fraud, but all that the two firms of lawyers were doing was putting into effect an agreement whereby a man had agreed to take a transfer from another man and pay a million. The Court accepted that a sophisticated criminal has targeted a purchaser, and stolen money from him. If the Solicitors had done anything wrongly or carelessly it would have been otherwise, no doubt, but the whole point of fraud is to appear genuine. It did appear genuine. Everyone was taken in. No-one was at fault.

So no, in October, the loss stayed with the targeted victim of the fraud.

And if I may say, quite right too.

So now, guess what, it’s as you were.

Except today, in his wisdom, a Judge has decided that the solicitor who should reimburse all losses, is the BUYER’s Solicitor. And try as I might – in the judgment here – I cannot see any reason given except that that firm of Solicitors is one of the very large London firms, presumably with a lot more money in their Bank than their client has.

So it seems to me, that the current law (this week!) is that after a property fraud, the loser is to be the player with the most money.

Does it then follow that if a small firm of Solicitors in the High Street was acting, and the Buyer was Tesco’s, then Tesco should pay? Will all parties to litigation now have to be means tested and ranked in order of richness? Doesn’t seem to me to be a decision based on the most impressive of legal reasoning. Not too clever at all, really.

The position is that in the past twelve months, three very similar property-selling frauds have had three different outcomes.

In May 2016, the two firms of solicitors – Buyer’s and Seller’s – had to suffer the loss half each.

In October, the frustrated intending Buyer had to suffer all the loss personally.

This week, the Buyer’s Solicitor had to suffer the loss entirely.

So we just need one more, where the Judge decides that the Solicitors acting for the fraudster should carry the can entirely, and we have got the full house.

Blimey. And of course, the latest case is now going for Appeal, so it may be all change again before too long. And it really should be.

As I said in October, if we don’t know what the law is, why do we even have laws?

The reality is that this is the third case, in a year, of property theft involving huge sums of money. The Courts are in a tizzy chasing around giving different decisions each time as to who should be in charge of paying for closing the stable door after a crook has stolen the horse.

But what is going on here? Why is it so easy for the crooks?

What’s that I hear from the back of the room, – Bring back Title Deeds? No sh.., Sherlock!

Until then, here we are.

Deep breaths.

That’s better, here’s a song. About stealing. Link here

As ever, do contact me or Christopher Atkinson here at AtkinsonNotary [0113 816 0116 or notary@atkinsonnotary.com or http://www.atkinsonnotary.com ] where we shall be more than happy to assist and help you through the maze whenever you have paperwork to be processed for foreign countries.

Documents for use in P. R. of China? Louise Explains The Road-Blocks

Documents for use in P. R. of China? Louise Explains The Road-Blocks

If you have a personal or a commercial document which you require to use in The People’s Republic of China then after Notarization it will need the further stamp of the PRC Embassy in England before it will be acceptable to the authorities abroad.

But please note that legalising your document(s) with that Embassy is not straightforward.

For private documents you as the Signatory of the document or the Holder of it, if it is, say, a copy of your Criminal Record check or University degree will need also to provide a photocopy of your passport or Driving Licence. If you have neither, perhaps because you are unwell and can no longer travel or drive, you may have to obtain a new passport before matters can proceed.

In relation to commercial documents it is required that again a photocopy of the legal representative’s passport and a Companies House document be also produced to the Embassy – the second in order to prove the legal status of the Company and its representative – which means that if the particular papers are executed by a person who is not a Board Director then there is a problem.

The Embassy requires a copy of a Director’s passport to be produced.

We have taken on a recent case where our client has contacted us from The People’s Republic of China wishing to commence litigation proceedings there against an English registered company trading in PR China.

The Chinese Court has ordered that our client should obtain and submit a Notarised Certificate of Good Standing from Companies House in England to confirm that the Company is still in existence.

So after Notarisation and obtaining the Foreign and Commonwealth Apostille the snag is that our client is not of course a Director of the Company to which the Certificate of Good Standing relates.

Our client has no connection to that Company whatsoever other than the fact that she is wanting to commence litigation proceedings against it. So of course, she has no access to the passport of any of its Board Directors.

A Certificate of Good Standing of a Company is a public document and any person in the world can obtain such a certificate from Companies House – you do not have to have an affiliation with the Company. But PR China is saying effectively, that for use in PR China you cannot obtain a valid Certificate without access to a passport of a Director.

What do we do in this scenario? Answers on a postcard to me please.

There seems to be a “Catch-22” situation here. Our suggestion for a resolution is that the Court in PR China should be prevailed upon to make an Order requiring that as a condition of defending the action, a Director of the Company must make his passport available to our client. Fingers crossed we will get there. Of course we will.

But, don’t be asking for logic or consistency in the whacky world of Notarisations, there is none to be found.

As ever, do contact me or Christopher Atkinson here at AtkinsonNotary [0113 816 0116 or notary@atkinsonnotary.com or www.atkinsonnotary.com ] where we shall be more than happy to assist and help you through the maze whenever you have paperwork to be processed for foreign countries.

Extra Income From Paying Guests? Up To A Point, Lord Copper.

Extra Income From Paying Guests? Up To A Point, Lord Copper.

A case from the Upper Tribunal (Lands Chamber) gives further bad news for English property owners seeking a bit of extra in the form of rental income.

Interest in the booming Airbnb service in England [there are of course several other similar organisations] has created a range of tens of thousands of hosts with rooms or whole properties available and presumably many more owners are considering this possible income earner. Link to Airbnb Here. Link to Daily Mail article here.

There is a tax break available too, the first £1000.00 of income does not have to be declared in income tax returns.

Initially, in England at least, the “early adopters” of Airbnb were people hoping to find holiday makers who would rent a spare bedroom, with or without any meals shared at the family table, whilst having a holiday in the area. An equivalent of “Bed and Breakfast” but usually without the breakfast.

Increasingly the new model is the handing over of a complete property, as a holiday home for the traveller, with no element of home sharing or ability to supervise the occupants’ behaviour day by day.

But, you cannot just join and start tomorrow, if you want to avoid trouble – there are things to do.

By no means an exhaustive list, and in no particular order:-

Planning permission. If you are creating a new guest bedroom in an attic, you will need planning permission for most alterations – link to typical article here- , and Building Regulations compliance in any case in respect of fire safety, alarms and signage.
Also in many areas particularly London, you may need Council permission even if no changes are needed to the property.

Insurance. No. 1. Your insurers should be contacted if you want to be certain that your home cover remains in force in respect of any damage to your home that the new “Guests” may cause.

Insurance. No 2. You may require additional insurance to cover you against liability for any accident or injury your “Guests” suffer falling downstairs, electrocuting themselves using kettles in the bathroom or being attacked by your dog. Or anything bad. [And those injuries might be real, or made up!]

Listed Building? Any works required such as fire escapes, internal signage, new fire doors may well be refused the necessary permissions if your Building is listed.

Mortgage Lenders’ Consent. If you do not own your house outright, then your mortgage lender, Bank or Building Society will have something to say. Most of them will simply say no, and you will risk repossession if you go ahead. The others are likely to increase your mortgage rate as a condition of giving permission. Link here

Landlords’ Consent. If your property is owned on a leasehold then you need not only the consent of any mortgage lender, but probably of your freeholder/landlord also. You need to read the terms of your lease very carefully and once you have done that, I suggest you ask your lawyer to explain to you what the words actually mean.

I am not being more flippant than usual in suggesting that a lay person may not understand the English language. Because, even if your lease is (unusually) written in short and simple words, that does not mean that the meaning is what you think it is.

This is where I began, with the recent Tribunal case. The Lease wording included a tenant’s promise “not to use the premises for any purpose other than as a private residence“. These are not long words but the Court case – which was an appeal from the Tribunal below which was also a trial as to the meaning of the words – engaged a judge and two senior Barristers at least.

You can read it here Link and see that even the meaning of words “private residence” have plenty of scope for ambiguity and disagreement.

So assuming you do need your Landlords’ consent and get it, and get the consent of your lender, and Listed Building Consents, and Buildings regulations are all complied with and planning permission obtained and all new insurance policies put in place, you are ready to go.

What can possibly go wrong?

Apart, that is, from everything you can think of.

There are plenty of horror stories too – here is a sample link.

Here is another link, have a look, just before you take the plunge.

Here is a sad song to cheer you up

And as ever please remember, when you need your papers properly presented for use abroad, book your appointment with us, at AtkinsonNotary [0113 816 0116 or notary@atkinsonnotary.com or www.atkinsonnotary.com ] where we shall be more than happy to assist.