Buying a House? - HAVE A SURVEY!

It is most important for you to know that when buying a property either new or old it is sold "as seen". If you buy a house and find that there are problems with it, for instance damp or a defective roof, then, except in very limited circumstances where the seller has made representations or comments, you have no claim against the seller whatsoever. It is therefore vital to have the property surveyed prior to committing yourself to buying it. If you are having a mortgage, your mortgage lender will have a valuation carried out. However, this valuation is usually of a very limited nature and is purely to enable the Lender to assess the value of the house and, crucially from the lender's point of view, whether if sold, it would realise at least the amount of the mortgage loan. It is a valuation not a survey and if problems come to light after you have purchased you would have difficulty in bringing any claim against a mortgage lender's surveyor.  Quite often the Mortgage Lender will give you the option of having a fuller survey carried out at the same time as the mortgage valuation and that is generally the most cost effective option. However, if you wish us to advise or recommend a surveyor to carry out a survey on your behalf we would be pleased to do so. Contact Tom O'Neill or David Bennetts in Lancaster (01524 386500) ton@bsglaw.co.uk drb@bsglaw.co.uk or George Mercer in Preston 01772 253841 gam@bsglaw.co.uk

 

Remaining with the physical condition of the property  -  it is also the responsibility of the buyer of the property to check and ensure that all of the services are working properly. This is especially important in relation to central heating. Unfortunately, if you move into your new house and find that the central heating boiler does not work then, once again, you will have no claim against the seller of the house and almost certainly no claim against the mortgage lender’s surveyor. It is therefore most important that before you commit yourself to buying a property you carry out any checks and inspections that you require.

PRIVATE LANDLORDS- CHANGE IN LAW THIS YEAR

 

Thursday 23 August 2012 by Keith Parr

 

Landlords of privately owned properties enter into Assured Shorthold Tenancy Agreements with tenants.

 

Such landlords need to decide whether they want to obtain a deposit from the tenants so it can be utilised in the event, for example, of there being damage to the property when the tenant leaves. 

 

However, if a deposit is paid by the tenant to the landlord on commencement of the tenancy the landlord must join a Tenancy Deposit Scheme so that the deposit is protected and returned to the tenant unless the landlord has a legitimate claim on the deposit and to resolve disputes using alternative dispute resolution as opposed to court proceedings.  Such schemes have to be strictly complied with within time limits and there are serious consequences of failing to do so.  Therefore, some landlords decide that it is better not to take a deposit.

 

It is important to understand what constitutes a deposit.

 

A deposit is a lump sum which  the tenant is required to pay before the keys are handed over and the tenant can move into the property. Any money that is taken by the landlord as security for the tenant’s liabilities is deemed to be a deposit. For example, it therefore includes payments described as a “cleaning fee” which is to be repaid to the tenant at the end of the tenancy if the property is clean. Or, additional money charged as rent each month to offset against potential costs of cleaning and repairs even if it is not described as such in the Tenancy Agreement and even if there is clear provision for the money to be repaid to the tenant at the end of the term.  Even a charge of two or more months for rent in advance at the start term of the tenancy can amount to a deposit.

 

Prescribed information has to be provided by the landlord to the tenant within a specified period. 

 

There are potentially significant sanctions for non-compliance including: -

 

1.          The landlord may be prevented from recovering possession of its property by giving notice under section 21 of the Housing Act 1988 unless the deposit has been returned to the tenant, and

 

2.          The landlord may be required to pay money to the tenant by way of a fine equal to between 1 and 3 times the amount of the deposit.

 

As a result of a change in the law earlier this year late compliance does not prevent a fine being imposed.

 

The change in law can have serious consequences where an Assured Shorthold Tenancy was created before the change in law on 6 April of this year as the extended period given to provide the prescribed information expired some time ago now.

 

Before taking any action I would suggest that you obtain advice from me, Keith Parr, Head of the Litigation Department of Blackhurst Swainson Goodier LLP , by telephoning 01772 253841. kgp@bsglaw.co.uk.

 

Visit our website www.bsglaw.co.uk.

Care Home Fee Planning

Recently, we have noticed a sharp increase in the number of people who contact us regarding Care Home fee planning.  This is understandable as in these times of austerity, people are concerned with protecting their wealth. 

Who pays Care Home Fees?

There are many facets to the rules regarding paying for care home fees and we would always suggest that you take independent legal advice if you are concerned.  However, the majority of people needing care will be liable for care home fees at some point, either in whole or in part.

How can I limit the effect of paying care home fees on my finances?

When people assess their monthly income, taking into account their pension(s), any state benefits and any income from savings and investments, many realise that the amount payable each month to the care home results in a small shortfall being taken from their capital.  This shortfall could be covered in one of the following ways:-

1. By selling any non liquid assets e.g. Property and combining the value of the same with liquid assets e.g bank accounts, your income can be maximised and used to make up any shortfall.  The benefit of this option is that it preserves the largest amount of money, should you die early, however if you did need care for may years, your capital would be diminished. 
2. An alternative is to rent out your Property so that the rent generated covers any shortfall. However, the income produced could stop if the property remains unoccupied at anytime or the tenant stops paying rent. In addition many people are reluctant to follow this route as it requires someone to assume the role of Landlord on their behalf and the Property will need to be maintained and insured.
3. A final option is an annuity.  In return for paying a one off single premium, an immediate care fees annuity is set up which provides the insured with a regular income to meet care fees. This can help to protect any remaining funds for future personal use or inheritance. However, it is worth remembering that you are paying a lump sum regardless of whether you require six months care or twenty years plus.

We have also noticed the rise of Care Home schemes which claim to guarantee that your assets can be protected from care home fees by passing them over to Trustees.  There are potential consequences which are often not mentioned and usually involve a compromise with your funds which may restrict access to your money or mean that you invest in assets that you would not normally consider.  Therefore, you should always seek independent legal advice before entering into any Care Home schemes.

One further option considered by many is the transfer of Property out of their name.  However the deprivation of assets rules generally make this option ineffective. 

If you would like any further advice on the above please contact Blackhurst Swainson Goodier LLP. Rebecca Lauder (rl@bsglaw.co.uk) or Amanda Owen (ajo@bsglaw.co.uk)  01524 386500.

Visit our website – www.bsglaw.co.uk

DIVIDING SPOILS WHEN UNMARRIED COUPLES SEPARATE

Naturally most people when starting a new relationship do not think about what will happen if it breaks down.  Unmarried couples (of any sex) who separate do not have the same legal rights and remedies as married couples and can only rely upon the Court’s powers in relation to land law and trust law to divide their property between them.   They cannot claim maintenance for themselves.

If an unmarried couple purchase a house in joint names there is a presumption that they intend to own it equally and share the proceeds when it is sold equally.

That applies whoever pays the mortgage. If they separate either can ask to the Court to order the sale of the house to ensure they receive their share. Obviously, if they both agree, either owner could sell their share of the house to the other.  The Court’s powers are limited to ordering the sale and determining how the proceeds should be divided. This is the simplest situation in which couples find themselves on separation. Many couples find themselves in a much less certain situation.

Sometimes at the start of the relationship one person moves into a house already belonging to the other.  Also for various reasons couples sometimes buy a house that is only in one of their names. Years go by without discussion of who owns what. It is the last thing on their minds. Both contribute equally to the household costs. Both assume that they own a share of the house. When things go wrong and they separate one of them suddenly finds out that they are left without a roof over their head. This could even happen if they had children. One way to avoid this situation would be for the couple to draw up an express Declaration of Trust saying who owned what.

In the above situation the non-owning person could make application to the Court under Trust Law to determine if they own a share of the house. The Court would have to consider the evidence presented before it to discover the intentions of the couple. When the Court is asked to determine who owns what, its decision is based upon precedent cases that have established the principles to be applied and each case ids decided on its own facts. 

Going to court is expensive, slow and stressful. If people take legal advice at the start of their property owning relationship they will know where they stand.  In the event of separation the pain,worry and expense would be a lot less.

At Blackhurst Swainson Goodier we can advise you on the best way to ensure that your interests are protected and ownership of property is clear.

If you would like any further advice please contact Andie Brown, Rebecca Butterfield or Michael Willey at Blackhurst Swainson Goodier LLP on 01524 386500.

Please visit our website  -  www.bsglaw.co.uk

Lasting Powers of attorney

Lasting Powers of attorney.

Everyone knows that you should write a will to make sure your affairs are dealt with as you would wish when you die, but what happens if you are unable to deal with your affairs during your lifetime?  This could be because of an accident or illness, or perhaps as a result of failing mental capacity.  Everybody should consider a Power of Attorney because nobody automatically has the right to act for you – if you leave it too late, the alternative is for somebody to make an application to court which can be an expensive and lengthy process. A Power of Attorney can be very useful to ensure that your spouse or other family member has the legal authority to make decisions for you, subject to any restrictions you have specified, and within guidelines that you have set out. 

Powers of Attorney

If you simply want to give another person the legal authority to take action in connection with your finances, you can set up an Ordinary Power of Attorney.  However, an Ordinary Power of Attorney only remains valid whilst the donor still has the mental capacity to make their own decisions about their finances.  Although legally valid you may encounter difficulties with financial institutions in recognising your attorney’s authority.

A better alternative is to set up a Lasting Power of Attorney (LPA) which continues to be valid even if you are no longer able to make your own decisions.  You can make a LPA (Property and Financial Affairs) which covers decisions such as paying your bills, investing your savings or perhaps selling your property. 

You can also give someone the authority to make decisions about your personal welfare, such as where you should live, or whether you should consent to medical treatment.  These kind of decisions are covered by a LPA (Health & Welfare), but your attorney can only make these kind of decisions when you cannot make them yourself.

Under an LPA you may appoint more than one attorney to act together, together and independently, or together in respect of some matters and together and independently in respect of others. If attorneys have to act together, then the LPA fails if any of the attorneys die or lose capacity (and also in some other circumstances). If they can act together or independently then the LPA will continue even if an attorney should die, etc. A replacement attorney can be nominated. You may grant general or limited authority. If general power is granted then the attorneys may manage all your property and affairs. If any restrictions or conditions are to apply then they must be clearly stated. Your attorney is under a duty to consult with you as far as possible, and to always act in your best interests.

Your solicitor should be involved in the initial process of advising you about LPA’s and in some cases it may also be appropriate for your solicitor to be appointed as an attorney, often with a family member or a close friend.  If you would like any further advice or help in setting up your own LPA please contact Blackhurst Swainson Goodier LLP, solicitors in Lancaster (01524 386500) and Preston (01772 253841).