Author Archives: Paul Wood

1. Leasehold Reform (Ground Rent) Act 2022

   16th November 2022 11:19 am Comments Off on Leasehold Reform (Ground Rent) Act 2022

   The Leasehold Reform (Ground Rent) Act 2022 (“LRGRA”) has been introduced by the Government following mounting pressure to deal with onerous ground rent provisions in long residential leases.

   The LRGRA limits the ground rent on most new long residential leases to one peppercorn per year (if demanded). This means there will be no financial value in ground rents. 

   The restrictions apply to single dwellings being purchased for a premium. The Landlord will be prohibited from demanding a rent that exceeds a peppercorn. In addition to this, the landlord is prohibited from charging administrative fees in relation to collecting the peppercorn rent.

   On 30 June 2022 the LRGRA will come into force for most new long residential leases, subject to some exceptions.

   The LRGRA will not affect retirement properties until 1 April 2023
   

   What does this mean for leases granted before 30 June 2022?

   The restrictions introduced by the LRGRA do not apply to leases that have already been granted. The Government has plans to implement further legislation that will cover existing long residential leases.

   Why does the new legislation not affect existing Leases?

   The Government feels that if it were to introduce these restrictions on existing leases then it may have a negative effect on Landlords.

   What is a long lease?

   A long lease is a lease with a term of more than 21 years. 

   What leases are excepted from the ground rent restrictions?

   There are several leases that are excepted from the ground rent restrictions that have been introduced by the LRGRA.

   These are: 

   • Business Leases
   • Statutory Lease extensions of both houses and flats
   • Community Housing Leases
   • Home finance plan leases

   What about voluntary lease extensions, are they exempt?

   No. If you were to enter a voluntary lease extension after the commencement of the LRGRA, the extended lease will be reduced to a peppercorn rent.

   What penalties can Landlords expect if they are in breach of the LRGRA?

   Landlords who breach the LRGRA can face fines ranging from £500-£30,000 per lease. In addition to this the Landlord is likely to receive demands to repay the rents (that exceed one peppercorn). 

   Why has this legislation been introduced?

   In the upcoming years there will be further amendments to current leasehold law. It is the Government’s intention to make leasehold properties more affordable for leaseholders. The overall intention of the Government is to set all future ground rents to zero. 

   I am a property developer; how will this affect me?

   Firstly, it is crucial that you obtain legal advice when creating new residential long leases, and we at Leonard Gray would be more than happy to assist you. 

   When creating a residential long lease, you must ensure that the ground rent is no more than a peppercorn and no administrative costs are charged in respect of collection of the peppercorn rent.

   I currently own a long leasehold property; how can I benefit from this?

   Unfortunately, the new legislation does not benefit you at present. However, this is only the start of the Government’s leasehold reform programme. The Government is due to address existing leases and ground rent provisions in the relatively near future. 

2. No-fault Divorce

   4th March 2022 3:28 pm Comments Off on No-fault Divorce

   From April 2022, The Divorce, Dissolution and Separation Act 2020, will bring divorce law into the twenty-first century by introducing `no fault’ divorce in England and Wales.

   Current legal Framework

   Currently, the sole ground for divorce, is a couple’s marriage must have `irretrievably broken down’. To prove this, one of the following five facts must be demonstrated:

   • The respondent has committed adultery and the petitioner finds it intolerable to live with them
   • The respondent has behaved unreasonably, and the petitioner cannot reasonably be expected to live with them
   • The respondent has deserted the petitioner for at least two years
   • The couple have been separated for at least two years, and both parties agree
   • The couple have been separated for at least five years

   The current law has been criticised for exacerbating the already emotionally difficult divorce process. In most situations, divorcing couples will rely on the unreasonable behaviour ground that allows them to waive the two-year separation period. This requires the petitioner to provide examples of their spouse’s behaviour that demonstrates they `cannot reasonably be expected to live with them’. Consequently, this often creates unnecessary conflict between the separating couples and draws attention away from important issues such as children, finances and property.

    

   What `no-fault’ divorce will mean for divorcing couples?

   The `no fault’ law will remove the need to prove one of the five facts, and instead allow divorcing couples to provide a statement that the marriage has `irretrievably broken down’. This removes the need for parties to assign blame, as it will not be necessary for a party to provide evidence of their spouse’s unreasonable behaviour. In addition, once the statement of irretrievable breakdown has been made, the Court will treat this as conclusive evidence that the marriage has broken down. As such, it will not be possible for the other party to contest the divorce.

   Additionally, the new law will allow parties to submit a joint divorce application if they both agree that the marriage has broken down, thereby encouraging parties to remain amicable. This is another significant change from the current law where only one spouse can apply for the divorce.

   The new law will also remove legal jargon including, `decree nisi’, `decree absolute’ and `petitioner’, with more modern terms such as, `conditional order’, `final order’ and `applicant’. This modernised language will make the legislation more accessible to the general public and considerably easier to understand.

    

   Will the new law speed up the divorce process?

   Whilst it is expected that the reformed law will remove some delays in the initial stages, it will not make divorce instantaneous. The new law will introduce a minimum timeframe of twenty weeks between the issuing of divorce proceedings and the conditional order. Legislators have said that this period is designed for `meaningful reflection’, providing couples with the opportunity to reconcile, or if separation is inevitable, make arrangements for the future. This period counteracts concerns that the new law will make divorce easier and consequently couples will not attempt to save their marriage.

   After this period has elapsed, the reformed law retains the current law’s position that six weeks must then pass before the final order can be made.

   Should you wish to arrange an appointment or for further information, please contact the department’s secretary, Amanda Saggers, on 01245 504 904 and she will be happy to assist.

3. Probate Fee Increase – January 2022

   10th February 2022 12:37 pm Comments Off on Probate Fee Increase – January 2022

   We previously reported on the proposed Probate fee increases in 2017 and then again in 2018. Thankfully, those extortionate proposed Probate fee increases, based on the value of the estate, attracted huge criticism. This criticism, in turn, forced the Lord Chancellor, Robert Buckland, to confirm that the Government no longer intended to proceed with their proposals.

   Now, nearly five years on from the initial planned increases, the Government have returned with a new proposal, which will come into effect on 26th January 2022.

   
   Current Probate Fees

   At present, the current fee to submit Probate applications is £155 if made by a professional probate practitioner (i.e. a Solicitor) and £215 if made by an individual in a personal capacity.

   
   New Probate Fee of £273 to come into effect on 26th January 2022

   The aim of the fee increase is to cover costs of the service and to align the fees for professional and non‑professional applicants for Probate applications into a single fee of £273. This will see an increase of £118 for professional applications and £58 for non-professional applications.

   The fee will be a set amount not dependant on the value of the estate.

   Whilst the above fees are a huge improvement in comparison to the previous proposals, the Probate service has had continued delays during the pandemic which raises the question as to whether this is the appropriate time to see an increase in fees, especially as most applications are submitted online.

   The Law Society have said “Plans to hike fees for Probate applications are unwelcome particularly when grieving relatives are suffering because the service is still subject to significant delays.” With the president of the Law Society adding “Any increase in fees must be reflected in the service provided. The online service was specifically designed to streamline the process and the UK government must get the system working efficiently before upping costs to both professional and non-professional users alike.”

   From our point of view, the relatively small Probate fee increase is welcomed, if this is reflected in an improved service provided by the Probate Registry.

    

4. Modernising Lasting Powers of Attorney – Simplifying the process or Simply increasing the risk?

   24th November 2021 7:55 am Comments Off on Modernising Lasting Powers of Attorney – Simplifying the process or Simply increasing the risk?

   Lasting Powers of Attorney are legal documents allowing you (the Donor) to plan for your future by appointing someone you trust (your Attorney) to manage your affairs in the event you are unable to do so yourself.

   For further information our Guide to Lasting Powers of Attorney can be accessed by clicking here.

   The steady increase in individuals being diagnosed, or at risk of being diagnosed, with dementia places an increased importance on ensuring your Lasting Powers of Attorney are in place before it is too late. We, at Leonard Gray LLP, have seen a rise in popularity as clients are realising this necessity.

   Whilst the ‘incapacity crisis’ continues it is inevitable that the process of creating and registering Lasting Powers of Attorney will look to be modernised.

   The current paper-based process requires the Donor, Attorneys and Certificate Provider to sign the Lasting Powers of Attorney correctly in a particular order and with a suitable witness. If done incorrectly this causes delays and problems with the application.

   It is proposed by the Office of the Public Guardian and the Ministry of Justice that the entire service becomes predominantly digital, replacing the current paper-based system.

   The objectives of the modernisation include:

   • increase safeguards, especially for the donor;
   • improve the process of making and registering an LPA for donors, attorneys and third parties; and
   • to achieve sustainability for OPG whilst keeping LPAs as affordable as possible for all people in society.

   Whilst this modernisation is likely to simplify the process and may encourage more individuals to have Lasting Powers of Attorney, an encouragement we welcome, the digitisation increases the risk of fraud and abuse. For example, there is no evidence that the donor has willingly entered into the legally binding agreement. Therefore, safeguards must be put in place to protect those most vulnerable.

   In light of the above, the value of seeing a Solicitor to discuss Lasting Powers of Attorney remains as important as ever, not only to ensure the appropriate advice is given but to ensure that there is no risk of fraud or abuse.

   Should you wish to arrange an appointment or for further information, please contact the department’s secretary, Michelle Bright, on 01245 504904 to arrange an appointment to see one of our solicitors.