Sunday 19 February 2012

How much holiday can I take?

There is a minimum right to paid holiday; if you work five days per week you are entitled 28 days for someone working five days a week. This is capped at a statutory maximum of 28 days for all working patterns. Part-time workers are entitled to the same level of holiday pro rata. You start building up holiday as soon as you start work. If you started work on or before 25 October 2001 (14 April 2002 in Northern Ireland) there are no legal rules about how your holiday builds up

Your employer can control when you take your holiday and provide in your contract for you to have more holiday than you are entitled to under current law. You get paid your normal pay for your holiday. Once you finish a job, you get paid for any holiday you have not taken.  Bank and public holidays can be included in your minimum entitlement. You continue to be entitled to your holiday leave throughout your ordinary and additional maternity leave and paternity and adoption leave.

You must give your employer advance notice that you want to take holiday. This notice should be at least twice as long as the amount of holiday you want to take.

Your employer can refuse permission for your holiday as long as they give you notice which is at least as long as the holiday requested. So to refuse a request for a week's leave, they would have to tell you a week in advance. Your contract may set out other rules about when you can take your holiday. This is allowed so long as the rules don't effectively prevent you from taking holiday at all.

In light of a recent European Court of Justice (ECJ) ruling, the following is applicable if you become ill during your holiday or just before you were due to take it. You can ask to convert the period of holiday concerned to sick leave and ask to take the missed annual leave at a later date.

Statutory annual leave cannot be replaced by a payment in lieu except where the worker's employment is terminated (Regulation 13(9) Working Time Regulations 1998). Employers are able to make a payment in lieu of any additional, contractual holidays, as long as this provision is contained in the employee’s contract.

Regulation 13(9) prevents the carry-forward of the four-week element of statutory leave entitlement.

Maternity leave and holiday entitlement

Holiday entitlement continues during maternity leave.  Some employees may ask to take their statutory holiday either before or at the end of the maternity period depending on how much holiday statutory holiday entitlement is available.  As statutory holiday is taken through the notice procedure above if employer and employee are in agreement then the unused holiday entitlement can be taken when the employer and employee agree.   There may be a problem taking statutory holiday at the end of the maternity if this means the unused statutory holiday is carried over into the next holiday year.  If this were to happen then if the holiday is not taken before the end of the holiday year the employee loses the holiday, as it is unlawful to carry forward any of the unused statutory holiday.  Essentially therefore the holiday should be taken before maternity leave commences.

Check however as if the employee has had holiday before the maternity leave commences and there is only contractual holiday due then providing the contract provides for the contractual holiday to be carried forward and or salary to be paid in lieu then there should be no problem.

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Monday 6 February 2012

What is a Home Buyers Report?

This is a survey of a property you may be looking to buy that’s much more detailed than the basic valuation. It’s for your benefit, rather than the mortgage lender.

It will highlight potential problems with a property, such as subsidence, damp or woodworm. This can help you decide whether to go ahead or not with the purchase, or whether to look to renegotiate the price.

It is always a sensible (and we would say essential) precaution to have a survey of your purchase property especially if the property is an older build. 

A recent Which? Survey disclosed:

‘Those who missed problems spent an average of £2,500 putting them right. One in ten spent more than £10,000. Mark Morris from Newbury told us: ‘Since moving in, I’ve found the rot and damp was much worse than I thought. I’ve also spent several hundred pounds making the electrics safe.’ A quarter said that if they’d known in advance, they would have tried to renegotiate the price, and more than one in ten said they wouldn’t have bought at all'.

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Wednesday 1 February 2012

Government to support buyers of new build homes

The Government has today announced it will in March launch a scheme which is aimed at those looking to purchase new-build homes.  

The ‘NewBuy Guarantee scheme’, will allow lenders to offer large mortgages on new-build homes without running the risk of losing money if the property falls into negative equity and is repossessed. Essentially the loan will be guaranteed by the developers and government (taxpayers).

It is hoped this will enable would be movers looking to buy a new-build property up to the value of £500,000 to overcome the problem of finding  large sums of money to put down as a deposit.  The scheme is looking at underwriting 95% mortgages.

It is reported, Nationwide building Society, one of the lenders which will take part, is currently working with the government to work out exactly how the scheme will operate.

The Council of Mortgage Lenders said discussions are on-going, and when the final details are announced the £500,000 cap could vary around the country.

MJP Conveyancing welcomes this move but as similar schemes have in the past operated  with little impact, we will wait and see what affect this will have on lifting the deposit affordability barrier which continues to dampen the growth within the property market.

Morgan Jones and Pett solicitors offer a fast, low cost and professional home moving service with prices starting at £230 plus VAT. Call now ion 01603877001 or via email at davidpett@m-j-p.co.uk for a FREE quote

Flood risk alert for future home owners and coveyancers

Buying a property that may be within the range of a flood plain has become even riskier due to the news that around 200,000 homes at risk from flooding could face problems getting insurance from next year.

Properties that have a 75% chance of flooding in any one year are those most at risk. Boston and Skegness in Lincolnshire is the constituency with the most homes at significant risk of  flooding with 7,550 properties under threat, followed by the Vale of Clwyd (7,339 homes), Folkestone and Hythe (7,196), and Windsor (7,125). Some properties in Great Yarmouth also fall into this category.

The reason for this is that an existing deal with the Government expires in 2013 and time is running out for ongoing talks about a new safety net arrangement.

The Association of British Insurers’ director-general Otto Thoresen said: "Insurers want to make sure that every home has access to affordable insurance, should the worst happen, and we're concerned that those people most at risk will lose out unless the Government considers a safety net.

"We are frustrated with the progress of our talks with the Government on this issue and want it to look urgently at a model that would allow flood cover to remain widely available and competitively priced. No country in the world has an entirely free market providing universal affordable flood insurance, and action is needed now to avoid 200,000 high-risk homes struggling to afford cover."

The possible non - availability of insurance may make it more difficult for people to find a mortgage for properties in the affected area and may lead to current home owners in those areas feeling trapped. 

Those acting for prospective owners of such property need to keep a close eye on this development and to warn clients of the what is happening and how this could affect the future value of the property.    Looking more closely at environmental reports and assessing the risk of flooding will clearly be needed as will the requirement to report the risk if indentified to the lender.

Unless Government acts quickly to extend the current arrangement we could see a large number of transactions failing over the next 12 months. 

By David Pett Solicitor and Partner

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Thursday 26 January 2012

Conveyancing process needs urgent reform

What can be done to make moving home faster and less expensive?  

This is a burning question and one that has yet to be addressed by Government despite the fact we currently face a major housing crisis and a situation where first time buyers are finding it increasing difficult and expensive to find a home.  The problem facing the first time buyer is likely to increase shortly with the withdrawal of the stamp duty concession and the forthcoming changes to how mortgages will operate in the future.

A brave Labour Government sought changes, the first since 1925, with the introduction of the doomed home information pack, but this was shot down in a blaze of glory by the Coalition Government when it came to power in May 2010.  Unfortunately in the rush to score political points no one seemed to care that by removing this attempt of reform it left the door open once again for the return of the problems associated with aborted transactions, increased costs and delay.

In fact, we are still left with an antiquated process and one that cries out for immediate reform.  The question is whether the current Government has the courage and inclination to do anything about it. 

So where do the problems lie?

Disclosure

As the law currently stands it is for the buyer to do most of the running around and to ask the seller questions because the duty to discover any problems with the property rests with the buyer.  There is no duty on the seller to volunteer adverse information about the property unless asked.  This means we have this bizarre process of having to ask the seller a series of questions hoping that all of the right questions are raised.   This is often a long and protracted process and one that could be avoided if the seller was required to bear all about the property to be sold.  This could be through thee completion of forms/questionnaires, documents that could be completed when the property is first placed on the market.  

Why not get the estate agent to ask the seller to complete the form and to make this available to prospective buyers.  At least the buyer could then decide on whether a survey would be needed.  All of this would take place before the lawyer is instructed and would save so much time.

Some may argue this is a ‘HIP”.  No it is not.  There is no added expense for the seller or the buyer. The seller simply completes a form knowing due to a change in the law that the duty to disclose rests with him or her and this forms part of the marketing process.   It would save time, it would save money as the transaction could proceed that much quicker and it would mean both seller and buyer standing far more chance of completing the transaction than they do at present.


Searches

Before the days of the HIP there were often delays in procuring searches.   Due to the shake up of Councils caused by the introduction of the HIP, most Councils have streamlined and improved service levels.   On top of this, personal search companies following the collapse of the HIP have faced a drop in demand for searches and this has led to increased competition and a vast improvement in the time it takes to deliver search results.

Search related delay is therefore uncommon.

However it is a bizarre situation that each time a property is sold a buyer is required when purchasing with a mortgage to order new searches.   This is often costly.  Often the cost of the search package is more than the fee charged by the solicitor!

In a time when the majority of the land in this Country is registered at the Land Registry would it not make sense for information on water and sewage and environmental issues to be noted on the Land Registry Title Document so that future buyers could see that at the outset and decide whether to ask the suppliers of the information whether there has been any change to the data since it was first supplied?   The cost of checking would be far cheaper than having to order a new search each time the property is transacted.

The same could apply to planning and building regulation data requiring this also to be noted on the Register the first time a property is sold and the data is disclosed.  How many times have property lawyers had to run around after planning and building regulation documents. 

On this subject if lenders could make it clear that they are not interested in planning and building documents which relate to matters of over 15 years in age this would also save time and money.  Some simple changes to the law to make it clear that no liability can arise on planning and building regulation breaches after a set period of time would put an end to this ridiculous and unnecessary paper chase.

Title defects

There will always be the occasional problem with title that needs to be addressed through insurance.  Why is it not possible that when the effect is found and insurance is taken out that there is not a requirement on the purchaser to register the insurance details at the Land Registry?  This would in terms of future due diligence save time and money and also avoid a future purchaser who may not have had the original policy passed to him or her, having to take out and pay for a fresh policy.  


Mortgages

Obtaining a mortgage offer once the mortgage is approved is no longer a reason for delay.  Most buyers receive their mortgage offer very early in the process.  The reason for this is that the lenders are issuing far less offers than they were before and therefore the paperwork of those mortgages they take on is coming through much faster.

Client Delay

Clients who sell have quiet a bit of paperwork to complete and it always amazes me that responsibility of over seeing this rests with the lawyer.  I am not sure why the selling agent could not ask the seller to complete these when the agent is engaged. It would save a lot of time and would quicken the process.


Solicitor delay

I always tell my clients that I can only be as fast as the slowest solicitor in the chain.   It is frustrating when you do as much as you can to progress a transaction only to find the solicitor acting for the other party is not responding or taking too much time to respond.

What can be done to improve this?  Very little though in a climate where lender panel membership is of importance to the survival of most conveyancers perhaps lenders will in the future take a closer look at the activity and performance of panel members and be more inclined to remove members where there is evidence of   repeated ineptness.

Conclusion

I accept a change in the law to reverse the maxim of ‘buyer beware’ would involve a radical switch, however by doing this the whole process would be far more transparent, quicker and cheaper.    It would lead to the front loading of information on a sale and if the requirement to register search data at the Land Registry along with title defect insurance was also introduced this would mean a prospective buyer would have to hand before an offer is made all the information he or she would need in making an offer and thereafter engaging a solicitor.

The cost of obtaining the title information, a cost which is already met by the seller may increase due to the extra data recorded and supplied, but this would easily be off set by the saving on not having to order full searches and reduced conveyancing fees due to a more streamlined service.

What are the chances of this happening?  Remote I would say as there is too much vested interest in the process as it presently operates and you also have a Government that says on the one hand it wishes to reduce bureaucracy and save costs, whereas on the other hand it has clearly stated it is not keen on introducing regulation that could hamper an already ailing property market.   It seems to have little appetite to interfere with the process. 

So it looks as if we may be facing another 100 years of operating a slow, costly and totally unfit for purpose  home moving process.   

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Wednesday 18 January 2012

Can HSBC restrict freedom of choice of solicitor?


The HSBC’s decision to make it less attractive for its mortgage customers to instruct their own solicitor has caused much anxiety within conveyancing practices , with many firms facing the loss of potential work from existing and potential clients.

The question is whether anything can be done to prevent this from happening.  Can a customer of HSBC insist on using his or her own solicitor without having to face a financial penalty?

Why freedom of choice is important?

One of the main concerns is conflict.   Solicitors have in the past acted for both buyer and lender and though the principles laid down in the recently introduced customer focused regulations ( Core Duties) would suggest ( if strictly applied ) that such a conflict should not be allowed to occur, it seems the Law Society has taken the view that its ‘business as normal’.    A decision which we as Conveyancers are of course happy to accept.

However when as in the present case HSBC has entered into a contract with one firm of solicitors and is providing its customers with a financial incentive to use those solicitors the dynamics of the relationship change and the scope for conflict is heightened.  How can the panel firm guarantee that it will not put the interests of HSBC before those of its clients? Surely it will not wish to lose what must be quite a lucrative contract with HSBC and therefore the commercial interests must clearly become influential.

What does the law say?

"It has always been the fundamental right of every citizen to be represented by solicitors of his or her choice" (Maltez v.Lewis (1999)). 

HSBC may argue that the client has a choice and is not so restricted. This may on the surface be correct, however when as is the case the client has received an offer of mortgage and is not looking to lose this, particularly in the present climate, and knows that if they decide to instruct their local solicitor they may be paying more, surely this all adds up to a rather tight and unreasonable constraint?

The Core Duties 3 & 4 of the Solicitors Practice Code 2007 say a solicitor's agreement with a third party's restriction on client choice could compromise the solicitor's independence and/or amount to a breach of Core Duty 4 where such a restriction may not be in the best interests of a client. As mentioned above one must question whether the solicitors acting under a high value commercial arrangement with the Bank is able, despite its best efforts, to provide unfettered advice to its clients.  Surely the very fact it is paid by the Bank and not the client makes this very different from the situation with other lenders where the client pays the fees.  The existence of a commercial arrangement between the bank and the solicitors must clearly compromise the solicitors in their dealing with the client.

Parallels with the insurance market

This issue is one which is often encountered in the insurance field when providers of legal indemnity insurance seek to limit the choice of solicitor, when a claim arises, to a member of the insurer’s panel of solicitors.  A conflict in these circumstances often occurs if the provider of the indemnity insurance also happens to be the insurer of the defendant against whom the claim is to be brought.  In this case the position is clear - the insurer must provide the freedom for the policyholder to choose its own lawyer.

Interestingly The Financial Ombudsman Service has confirmed the above points and also recommended that it is appropriate to use the policyholder's own solicitor in any cases where there is a suggestion of a conflict of interest, or in large and complex matters.   In this case if therefore an insurer insists on a panel lawyer, the policyholder may be able to refer the matter to the Financial Ombudsman Service.

It will be interesting to see whether clients with the help of their choice of solicitor look to what has happened in the insurance industry and begin to challenge through the Ombudsman Service the financial disincentives imposed by HSBC on freedom of choice.

Conclusion

HSBC must be taken to task on this policy decision.   The scope for conflict is wider and different from the relationship between other lenders and their panel of solicitors who are sanctioned to act on their behalf but with whom there is no commercial arrangement under which money is paid to the solicitor direct.
Solicitors affected by this decision may consider making a complaint relying on Core Duties 3 and 4. 

Clients affected may decide to refer the latter to the Ombudsman for investigation though in practice and with the fear of losing a mortgage offer this may not happen.

Alternatively clients could vote with their feet and choose mortgage products where there is no such constraint.    For those solicitors affected and who bank with HSBC may I be bold enough to suggest that it might be a time for a change!


Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

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