Back to e-alerts                                                                               Download PDF [PDF 116KB]

Issue 57 – October 2008

Contents

Cases

Statutory Instruments

Features 

Articles

News 

Events

Discounts (how to book and claim discounts)

To order any of the following titles and claim your discount quote: “Law Society Section discount offer”, contact LexisNexis Butterworths customer services (telephone 020 8662 2000 or email customer.services@lexisnexis.co.uk). A full list of publications is available at www.lexisnexis.co.uk. 

Cases

1. South Cambridgeshire District Council v Secretary of State for Communities and Local Government and others

Citation: [2008] EWCA Civ 1010
Hearing date: 5 September 2008
Court: Court of Appeal, Civil Division
Judge: Sir Mark Potter P, Scott Baker LJ and Sir Robin Auld
Summary: Town and country planning - Permission for development - Material consideration
The second and third respondents were gypsies. They belonged to gypsy families in the appellant local authority’s area. They had previously led a travelling lifestyle, but that was curtailed following the birth of their third daughter, K, in 1996. K was born with an acute and life threatening condition and required regular medical assistance and special care. She was unable to walk unaided and had a wheelchair. All intimate and personal care had to be undertaken by a responsible adult. The second and third respondents sought planning permission to use the site in dispute (the site) for residential gypsy use and to site upon it caravans, a utility block and a mobile chalet/medical unit for a disabled person.

A planning inspector ultimately granted planning permission for the development subject to a number of conditions, including that only the second and third respondents and their dependants who lived with them could reside on the site. The inspector held that the development would have a significant adverse effect on the rural character and appearance of the area, and conflicted with various planning policies, but that there were other material considerations which had to be taken into account pursuant to section   38(6) of the Planning and Compulsory Purchase Act 2004, including the limited immediate availability for suitable land, and the exceptional nature of the family’s personal circumstances, even among the gypsy community.

The authority made an application under section   288(1) of the Town and Country Planning Act 1990, challenging the validity of the decision to grant planning permission at all. That application was dismissed, the judge finding that no grounds upon which to question the validity of the inspector’s decision existed and that her approach to the burden of proof had been flawless (see [2007] All ER (D) 105 (Sep)). The authority appealed.

The issue that fell to be determined was whether the judge (and the inspector) had erred in concluding that there had not been a requirement on the second and third respondents to prove non-availability of other sites or that particular needs could not be met from another site.
The appeal would be dismissed.

Section 38(6) of the Planning and Compulsory Purchase Act 2004 clearly provided that the Development Plan was to be determinative unless material considerations indicated otherwise. There was no burden of proof on anyone. It was a matter for the planning authority, or the inspector, to decide what the material considerations were and, having done so, to give each of them such weight as considered appropriate. It was a matter of planning judgment.

The inspector had been correct in her analysis. Planning applications fell to be decided in accordance with the Development Plan unless material considerations indicated otherwise. The weight to be given to the material considerations had been a matter for her.
 
Case annotations in other services: South Cambridgeshire District Council v Secretary of State for Communities and Local Government and others [2008] All ER (D) 24 (Sep)

2. Westleigh Properties Ltd v Green
 
Citation: [2008] EWHC 1474 (QB)
Hearing date: 27 June 2008
Court: Queen’s Bench Division
Judges: Teare J
Summary: Landlord and tenant – Flats – Tenants” right to acquire landlord’s reversion
 
In 1990, the defendant tenant purchased a 199 year lease of a flat. The owner of the freehold of the building was Broadway (Essex) limited (Broadway). In January 1992, Broadway transferred the freehold interest in the building to the claimant landlord for the sum of £500. In March 2004, the landlord commenced proceedings against the tenant for the payment of £1,234.70, allegedly due under the lease.

The tenant denied liability and counterclaimed for specific performance, namely a demand that the landlord’s reversion be transferred to the tenants, repayment of a sum of £650, and a sum equal to the difference between the sum paid in respect of insurance to the landlord over 13 years, and what the tenant would have paid for insurance. On 11 May 2005, the judge sitting in the county court gave judgment in favour of the tenant. By his order, the judge required the tenant to serve a purchase notice pursuant to section   12 of the Landlord and Tenant Act 1987.

Subsequently, a dispute arose between the parties as to whether the tenant had served a purchase notice within the time limit. The tenant maintained that he had done so either by a letter dated 10 June or by a letter dated 8 August; he also sought an extension of time for doing so until 11 October. The judge held that the tenant had not served a purchase notice and that the court had no power to extend the time for doing so. The effect of that decision was that the efforts by the tenant to have the freehold interest in the building transferred had come to an end. He appealed.

The principle issues between the parties was whether the tenant had served a valid purchase notice on the landlord pursuant to section   12 of the Act and whether the judge had the power to extend the time for service of such notice.

The appeal would be allowed.

(1) Neither the incorrect date nor the naming of an incorrect Act could have caused the reasonable recipient to have been in any doubt as to what the tenants required. The requirement for addresses to be specified was not a mandatory, but only a directory requirement.

In the instant case, the notice did not expressly identify the person nominated by the tenants as the person to whom the landlord would dispose of his interest. However, the reasonable recipient could have been in no doubt that the tenants had required it to be disposed of to themselves.

(2) In deciding to whom the notice was sent by post, in circumstances where the addressee on the envelope was different from the addressee on the notice, it was necessary to have regard not only to the address on the envelope and the address on the notice, but also to the terms of the notice. Where there was an apparent difference between the addressee on the envelope and the addressee on the notice, the terms of the notice might resolve that conflict.

In the instant case, having regard to the addressee on the envelope, the addressee on the notice and the contents of the notice, the notice had been sent to the landlord.
 
Case annotations in other services: Westleigh Properties Ltd v Green [2008] All ER (D) 387 (Jun)
 
3. S v Rule and another; Rule v M and another

Citation: [2008] EWHC 1874 (Fam)
Hearing date: 31 July 2008
Court: Family Division
Judge: Black J
Summary: Estoppel - Proprietary estoppel - Conduct leading representee to act to his detriment
F and his wife were married in about 1948. They had two sons: M and the claimant, H.

Following the death of his wife, F began to consider the question of inheritance tax. On 17 August 1986, “in consideration of my natural love and affection for my sons”, F transferred what had been his matrimonial home (the property) to M and the claimant as tenants in common in equal shares.
Other property, including shares, was transferred to M and the claimant by deeds of gift executed also executed on 17 August. F continued to live at the property subject to a tenancy agreement under which M and the claimant let the property to him. There was a dispute as to whether the transfer of the property was absolute or subject to certain conditions. On 23 April 1995, a transfer and deed of gift were drawn up whereby the legal title to the property was transferred from the joint names of M and the claimant to M's sole name (as duly registered later that year) and the claimant purported to transfer his entire beneficial interest to M. On 19 December 1998, the claimant married W. F moved out of the property in summer 2000.

On 24 October 2000, M transferred the property from his sole name into the joint names of himself and the claimant to hold subject to a trust as tenants in common. On 31 October, M and the claimant signed a deed of gift whereby M gave all his beneficial interest in the property to the claimant, and M and the claimant declared and confirmed that they would hold the legal estate as trustees for the claimant absolutely.
 
The claimant and W moved into the property in August 2001, having sold their home and raised finance in order to carry out substantial works to make the property habitable. In February 2005, W commenced divorce proceedings and claimed ancillary relief. Disputes arose in relation to the ownership of the property. On 27 October 2006, the claimant issued proceedings in the Chancery Division in which he claimed that he was entitled to an order vesting the premises in his name or the joint names of himself and W. At that time, the land registry showed M as the proprietor of the property. Subsequently, the Chancery proceedings were transferred to the Family Division. The ownership issue fell to be determined in the instant proceedings.

The claimant submitted, inter alia, that he had expended the money renovating the property in reliance upon a promise made by F, and agreed by M, that the property would be his if those works were carried out and various shares transferred to M, thereby giving rise to a proprietary estoppel or constructive trust in his favour. M and F denied that any such promise or agreement had been made.

The court ruled:

On the evidence, the claimant and W had sold their home in order to fund the renovations of the property in reliance upon a promise made by F. That promise had been ratified by M in consideration for the transfer of shares by the claimant. Accordingly, a proprietary estoppel or constructive trust had arisen in favour of the claimant. In those circumstances, Equity would only be satisfied if ownership of the property was vested in the claimant.

Case annotations in other services: section   v rule and another; rule v M and another [2008] All ER (D) 146 (Aug)

Statutory instruments

1. Town and Country Planning (Trees) (Amendment) (England) Regulations 2008

Number: 2008/2260
Enabling power: Town and Country Planning Act 1990, ss 198(8), 199(2), (3), 323, 333(1)
Commencement: 1 October 2008
Summary: Make amendments to the Town and Country Planning (Trees) Regulations 1999, SI 1999/1892. Provides for use of a standard application form for applications for consent under a tree preservation order (TPO). Substitutes a new Part 4 of the 1999 Regulations to provide new procedures for appeals without a hearing or inquiry under the Town and Country Planning Act 1990, section   78 as applied under TPOs and to appeals against tree replacement notices under the 1990 Act, section   208.
 
2. Housing (Right to Manage) (England) Regulations 2008

Number: 2008/2361
Enabling power: Housing Act 1985, section   27(4), (17), AB
Commencement: 1 October 2008
Summary: Set out the procedure to be followed where a tenant management organisation proposes to enter into a management agreement with a local housing authority under the Housing Act 1985, section   27. Impose an obligation on the authority in specified circumstances to enter into a management agreement, and contain related provisions. Revoke the Housing (Right to Manage) Regulations 1994 in so far as they apply to houses and authorities in England. Set out, amongst other matters, what is a tenant management organisation (TMO), what criteria the TMO must meet in order to take over the housing management services, what assistance the local housing authority must provide to the TMO. Also require the appointment of an Approved Assessor to assess the feasibility of the TMO's proposals and to provide advice on how the TMO can progress to ensure that it is able to take over the management of housing services.

3. Housing (Approval of a Code of Management Practice) (Student Accommodation) (England) Order 2008

Number: 2008/2345
Enabling power: Housing Act 2004, section   233(1), (3), (4)
Commencement: 1 October 2008
Summary: Approves a code of practice laying down standards of conduct and practice to be followed with regard to the management of houses in multiple occupation and certain other buildings that are occupied solely or principally by full-time students. The other buildings specified are those falling within the Housing Act 2004, schedule 14, paragraph 4 (which provides for a description of buildings occupied by students which are not HMOs for the purposes of that Act). Students who occupy such buildings must do so for the purpose of undertaking full-time education courses at specified educational establishments. The Houses in Multiple Occupation (Specified Educational Establishments) (England) Regulations 2008, SI 2008/2346. Withdraws approval for one of the codes approved by the Housing (Approval of Codes of Management Practice) (Student Accommodation) (England) Order 2006, SI 2006/646 and amends that Order accordingly. 
 
4. Town and Country Planning (General Permitted Development) (Amendment) (No 2) (England) Order 2008
 
Number: 2008/2362
Enabling power: Country Planning Act 1990, sections 59, 60, 61, 333(7)
Commencement: 1 October 2008
Summary: Amends SI 1995/416 so that planning is not permitted if the enlarged part of the dwellinghouse would have a single storey and extend beyond the rear wall of the original dwellinghouse by more than four metres in the case of a detached dwellinghouse, or three metres in the case of any other dwellinghouse, or exceed four metres in height.
 
5. Housing and Regeneration Act 2008 (Commencement No 1 and Transitional Provision) Order 2008
 
Number: 2008/2358
Enabling power: Housing and Regeneration Act 2008, sections 320, 322, 325
Commencement: 1 October 2008
Summary: Brings into force on 8 September 2008 provisions of the Housing and Regeneration Act 2008, parts 1, 2, relating to the establishment, constitution, objects and initial proceedings of the new Homes and Communities Agency; the establishment of the new Office for Tenants and Social Landlords; and powers to permit consultation in preparation for certain actions to be taken by the regulator or the Secretary of State. Also makes transitory provision to permit consultation to be carried out before part 2 is brought fully into force. The Urban Regeneration Agency and Commission for the New Towns are abolished. Commences the Housing and Regeneration Act 2008, section   317 (building regulations: time limit for prosecutions) and section   321(1) (repeals) on 22 September 2008, for consistency with other statutory regimes, and with the way in which related provisions are commenced by the Act itself.
 
6. Houses in multiple Occupation (Specified Educational Establishments) (England) Regulations 2008
 
Number: 2008/2346
Enabling power: Housing Act 2004, schedule 14, paragraph 4 (2)
Commencement: 1 October 2008
Summary: Specify certain educational establishments managing or having control of buildings which are not HMOs for the purpose of the Housing Act 2004 (excluding Part 1 of the Act, which deals with housing conditions).
 
7. Stamp Duty Land Tax (Exemption of Certain Acquisitions of Residential Property) Regulations 2008
 
Number: 2008/2339
Enabling power: Finance Act 2003, schedule 3
Commencement: 3 September 2008
Summary: Exempt from the charge to stamp duty land tax certain acquisitions made on or after 3 September 2008 but before 3 September 2009. The exemption extends to acquisitions of major interests in land (other than grants of leases for less than 21 years, or the assignment of leases with less than 21 years to run) which consist entirely of residential property and which are made for a chargeable consideration of not more than £175,000.
 
8. Stamp Duty Land Tax (Variation of Part 4 of the Finance Act 2003) Regulations 2008

Number: 2008/2338
Enabling power: Finance Act 2003, section   109
Commencement: 3 September 2008
Summary: Vary the Finance Act 2003, section   77A which provides for exceptions from the general requirement to notify HM Revenue and Customs of acquisitions of major interests in land. Item 1 of section 77A(1) provides that acquisitions which are exempt from the charge to stamp duty land tax under Schedule 3 of the Finance Act 2003 are not notifiable. That provision is amended so that acquisitions which are exempt by virtue of regulations made under the power at paragraph 5 of Schedule 3 are notifiable.
 
Please note subscribers can go to LexisNexis Butterworths for further details about all of the above SIs. Non-subscribers can sign up for a free trial of the online service.

Features

1. Social landlords should benefit from “Malcolm” case

A recent House of Lords ruling will be welcomed by landlords and will help clear up uncertainties in the law relating to the application of the Disability Discrimination Act 1985 (DDA 1985), says Robert Wassall, partner and head of social housing at Blake Lapthorn Tarlo Lyons.

In Lewisham London Borough Council v Malcolm [2008] All ER (D) 342 (Jun), the Law Lords held that a landlord cannot discriminate against a disabled tenant if it is unaware of the disability. It further ruled that a landlord is not in breach of DDA 1985 if the action it takes against a tenant is not based on the tenant’s disability. The Law Lords held that a landlord cannot discriminate against a disabled tenant if it is unaware of the disability. It further ruled that a landlord is not in breach of DDA 1985 if the action it takes against a tenant is not based on the tenant’s disability. The Law Lords held that a landlord cannot discriminate against a disabled tenant if it is unaware of the disability.
It further ruled that a landlord is not in breach of DDA 1985 if the action it takes against a tenant is not based on the tenant’s disability.

Wassall says: "I am delighted with the decision of the court. Lewisham council was brave to take this case to the House of Lords, but it was essential that the law in this respect was clarified."

Lewisham council sought to evict Malcolm, who suffered from schizophrenia, from one of its flats after he sublet it without consent. Malcolm claimed that since he would not have sublet the flat in such a manner had he not been schizophrenic, in seeking to evict him, the council was discriminating against him by treating him less favourably because of his disability.

The court of first instance backed LBC's claim that there was no causal link between the subletting of the flat and Malcolm’s schizophrenia but the Court of Appeal disagreed and said that in the absence of a valid justification defence, the council’s proceedings for possession of the premises were unlawful.

Overturning the Court of Appeal’s decision, however, the House of Lords acknowledged that Malcolm may not have sublet the flat had he not been a schizophrenic but held that the council’s reason for seeking possession of the flat was a housing management matter which had nothing to do with Malcolm’s disability.

Wassall says that the law lords also explored the issue of what Parliament intended the “comparator”, should be, under section   24(1) of the DDA 1985, concluding that the correct approach was to compare the way the disabled person has been treated to the way that a non-disabled person in the same situation would have been treated. In Malcolm, the correct comparator, therefore, would have been a non-disabled tenant who had also illegally sublet.

He says that the case is of great significance for any case involving the potential eviction of a person suffering from a disability, especially in anti-social behaviour cases.

"The implications are that such cases should now be easier for social landlords to win. Victims of anti-social behaviour should welcome this decision as it should result in their landlords being more willing to take cases to court, where the perpetrator suffers from a disability."

He says he suspects that many registered social landlords (RSLs) will have been reluctant to bring claims for possession against tenants known to be suffering from a disability, on the basis of previous case law.

He says: "That previous case law can be traced back to the case of North Devon Homes v Brazier [[2003] All ER (D) 428 (Mar)]. In other words, for three years, RSLs have had to “tread carefully” and as a result of doing so they may have developed “softly softly” practices which may have resulted in many victims of anti-social behaviour being left without any remedy."
He adds that RSLs should reconsider their existing policies and procedures to take into account the decision of the House of Lords.
(03/09/08)

2. Periodic tenacy — the cost of failing to meet the criteria

In Fitzkriston LLP v Panayi, the registered owners of premises in north London brought proceedings for possession against the first defendant, Panayi, and his business company, Euro American Car Service Ltd, the second defendant.

The defendants resisted the claim relying on a document made in 1998 that purported to grant a tenancy of business premises for an initial term of a year. The document was never executed, but the occupier was allowed into, and subsequently remained in possession of, the premises. They argued that the agreement was within the Law of Property Act 1925, section   54(2) (LPA), created a legal interest and bound the owner. The issue therefore, was whether the defendants had a valid oral periodic tenancy at the best rent or a rent at market rate (the best rent issue).

Solicitor and member of the Property Litigation Association Malcolm Dowden says: "The Court of Appeal rejected that argument. Expert evidence was heard and accepted. The rent (£4,000) was not “the best rent that could reasonably be obtained without taking a fine”. Consequently, the lease could not benefit from section   54(2) of the LPA. Instead, it fell within section   54(1), which reads: “All interests in land created by parol and not put in writing and signed by the persons so creating the same, or by their agents thereunto lawfully authorised in writing, have, notwithstanding any consideration having been given for the same, the force and effect of interests at will only”.
"The ruling gives a useful reminder of the limited exception to the rule that leases must be created by deed.
The exception is found in section   54(2) of the LPA which says: “Nothing in the foregoing provisions of this part of this Act shall affect the creation by parol of leases taking effect in possession for a term not exceeding three years (whether or not the lessee is given power to extend the term) at the best rent which can be reasonably obtained without taking a fine”.

"This is often said to mean that a lease granted for up to three years can be created either by signed writing (ie not a deed) or by “parol” (by words or conduct). If created under section   54(2) the lease creates a legal interest in land. That legal interest can be an “overriding interest”--one that binds the buyer of registered land even though it is not shown on the register."

The tenant’s interest was “at will only”. The document did not bind the new owner and so the possession order made against the tenant was upheld.

Dowden says: "The case underlines the need to meet all of the criteria for section   54(2) protection. The court’s focus on the level of rent could be useful in circumstances where the landlord of business premises is faced with an occupier’s assertion that they have a periodic tenancy, with security of tenure under the Landlord and Tenant Act 1954. It is clearly not enough for the tenant to show that the arrangement was for three years or less. The tenant must also show that the rent meets the section   54(2) test."
(09/09/08)

3. Government's housing plans are long on rhetoric but short on detail
 

As part of its new package of housing measures, the government has introduced a one-year stamp duty holiday for all properties sold for up to £175,000. The aim is to restore market confidence and help first-time buyers. Alongside this, 10,000 more first-time buyers currently struggling to get into the mortgage market are due to benefit from a new £300 million shared equity scheme.
 called “Homebuy Direct”. The scheme will offer households with incomes below £60,000 a five-year interest-free loan. The loan, jointly financed by the government and the housing industry, will enable families to buy up to 30 per cent of the equity in a new build property. The rest would be held by a local authority or a housing association.

"The government’s decision on stamp duty seems to be in line with its intention to concentrate help on the first-time buyer area of the market," says Richard Carroll, head of residential property at Mills & Reeve. "However, simply putting all your efforts into one sector of the market is misguided. Most property transactions involve chains and there is little to be achieved in helping the bottom of the chain if the middle and top remain stuck because of high taxation and low confidence."

Carroll is also sceptical about the government’s share ownership proposal. "It’s long on rhetoric and short on detail. It’s not clear where these loans are going to come from, or how they are going to be secured. Solicitors acting for buyers taking advantage of these loans are going to be faced with some kind of security documentation. I suspect that it will be similar to purchasing a local authority property, where you try to secure a discount through a pre-emption clause. If that is the plan, then lenders are not going to be happy because the pre-emption clauses on local authority sales rank in front of the first charge. That would mean the scheme is dead in the water because the lenders wouldn’t stand for it. It doesn’t look to me as if the government has consulted lenders over these plans at all.

"In addition, who exactly is going to make these loans? I doubt it’s going to be the Treasury. The government has to comply with its own loan protection legislation, so it has to use a regulated body. I’m not sure who that can be, because none of the current government structures is authorised to make loans. They could use a shared equity scheme, which some developers have been using recently. That generally only ranks as a second charge. However, you do then have to disclose the existence of the second charge to the lender, and get their consent to register it. So lawyers are going to have to pay a lot of attention to the details of how these loans are secured."
(05/09/08)

 
4. Proposed tax on infrastructure development needs further work

The proposed Community Infrastructure Levy (CIL)--a key Planning Bill proposal--has come in for some heavy criticism. The government is committed to an expansion of house building to develop local areas, but it needs extra resources to do so. The CIL, the provisions for which are currently going through Parliament, would be used by local authorities in England and Wales to fund new developments. The government would like to introduce the CIL from 2009. However organisations such as the British Property Federation (BPF) believe the process and procedures to operate the system are far from ready.

Nigel Hewitson, head of planning at Norton Rose and contributor to Butterworths Planning Law Service, says: "The proposed requirement for the authority to have an up-to-date development plan could cause more problems than the government realises. Progress towards adoption of comprehensive Local Development Frameworks (LDFs) has been much slower than hoped for so that, even though Local Planning Authorities (LPAs) self assess on the point, few of them could honestly say they have an up-to-date comprehensive LDF."

The government said, in its August 2008 document “The Community Infrastructure Levy”, that it is minded to propose that a "pre-requisite for being able to levy CIL is that there should be an up-to-date adopted development strategy for the area in which the local authority propose to charge" and that any authority wishing to charge CIL which does not have an up-to-date development strategy would need to prepare a new one together with their CIL charging schedule before they can take advantage of the levy. The government stated in the same document that there was consensus among stakeholders, including the BPF, for CIL. However, Michael Chambers, BPF director of regeneration and development, says: "The skeleton of a CIL system is in place but we still have concerns about crucial areas of detail, such as how local authorities will assess the viability of a CIL charge and the extent to which CIL will really operate within the planning system."

CIL charges will be based on simple formulae relating to the size of the charge and to the size and character of the development paying it. However, it will only be one component of a range of funding streams financing infrastructure. Hewitson says there are other flaws: "The proposed restriction that only statutory plan-making bodies can set a CIL disadvantages other LPAs--in particular some Urban Development Corporations (UDC) and the Olympic Delivery Authority--which are the LPA for certain categories of application but have no plan-making powers. "They may well wish to set a CIL in areas where providing and renewing infrastructure can be a very big issue. One of my clients is a UDC which has spent considerable time, money and effort pioneering the setting up of a standard charge (“roof tax”) system which it hoped to simply convert to a CIL. If the government proposals remain as indicated, because it isn’t a plan-making authority, it won’t be able to do so, and although section   106 of the Town and Country Planning Act is proposed to be retained in the short term, the new paper makes reference to introducing new rules “scaling back” the use of section   106, potentially leaving my client unable to operate its charging system, which it needs to fund much-needed infrastructure in some of the poorest areas of London."

Amendments restricting the types of authorities which could be empowered by the Secretary of State to charge CIL were made during the Commons Committee stage. Only certain authorities, referred to as charging authorities, will be able to levy CIL, including district councils and unitary authorities. In London, the Mayor will be a charging authority. The government says there will be improvements to section   106 agreements, which are used to mitigate the impacts of development proposals. Three new steps are proposed: new model section   106 agreements to be produced in conjunction with the Law Society; the establishment of a practitioners'” forum to share best practice; and a new toolkit to help councils accurately assess their affordable housing needs.

(20/08/08)

5. A virtual department could make conveyancing profitable again

As uncertainty sweeps the property market, one conveyancing firm is expanding by setting up a virtual department for other solicitors.

The idea behind the initiative is to help other law firms, whose conveyancing departments may be struggling, by allowing them to offload the costs of conveyancing while allowing them to retain the benefits associated with it, such as the extra work it generates for them in terms of estate agency, financial products work and other private client legal work.

Solicitors Conveyancing Services (SCS) is the brainchild of Your Conveyancer, Scotland’s largest firm of conveyancers. It launched in Scotland in August 2008 and is looking to expand into England and Wales (once it has finalised arrangements with its English partner law firm) in 2009.

Your Conveyancer, which handles conveyancing work for clients such as Nationwide, Abbey and HBOS, is Scotland’s only provider of volume conveyancing services. It was started by Kyle Peddie, chief executive of Your Conveyancer, a former winner of the law partner of the year award at the 2005 Scottish Legal Awards, in 2006 (it was formerly known as PSM Direct) and has grown from 35 staff to nearly 90.

Its service, SCS, is aimed at firms of solicitors for whom conveyancing may not be their core activity but who may wish to offer this service to their clients. In many cases, says Kyle Peddie, these firms are maintaining costly conveyancing operations and running them on small margins merely to retain clients for other more profitable business.

Peddie says Your Conveyancer aims to help these residential property solicitors through its SCS service. Many of these firms are now experiencing a sharp drop in the volume of conveyancing business and need to trim costs.

The service works as a “sub-contracted, virtual conveyancing department” for law firms. Instead of running a department as a loss leader where there is not enough work to justify it, firms can outsource what conveyancing work comes in to SCS via a white-labelled web-based service. Firms will be able to maintain their own identity and relationship with their clients, and some of the profit, while dispensing with their conveyancing costs.

Kyle Peddie, chief executive of Your Conveyancer, says: "Nobody else is doing this in the UK. This all came about because, a year ago past February, I was approached on two consecutive days by two separate firms with the same question: “would we consider doing their conveyancing for them?” The surprising thing is that both firms who approached us were large traditional firms, the last type of firms I would have imagined considering this. However, this service would also suit smaller firms, so I think this suits firms right across the board.

"With the credit crunch, firms are finding it harder to have conveyancing in-house. We are taking away their conveyancing overheads and delivering a better service."

"We have 88 staff including 79 fee earners," says Peddie. "We are in consultation with seven firms at the moment and we launched at the beginning of August. If firms are interested we could have the system up and running within a week of their finalising the details. This is really a branding exercise, and we are set up to do that so we can move quite quickly.

"Traditional firms have a conveyancing practice in-house," explains Peddie. "But with the credit crunch, they are finding it harder to make a profit margin, and are paying paralegals to do the work. We can provide that service instead. They may not be making much profit out of conveyancing but most firms in Scotland also do estate agency work and financial products and that’s where they make their money. We can act as their virtual conveyancing department. They will retain their brand, so the branding and letterheads will be “Your Conveyancer in association with Joe Bloggs and Co”. It will carry both our brands, and we will carry out conveyancing work on their behalf."

The service aims to be as transparent as possible, and will use email and text messages to keep clients informed of progress, and LexisNexis Visualfiles case tracking technology. Peddie says the system is secure, uses the latest technology and will provide a faster service than most firms can offer at the moment.

However, client law firms will not need to invest in new, expensive case tracking or other technology, says Peddie. A simple PC will suffice.

"The solicitors will have a username and password so they will have access to all the cases," says Peddie. "They will be able to see all the cases and can get access to management reports to keep them in the loop. Using SMS in this way is totally innovative up here but not in England. We can send emails as well as automated text messages from VisualFiles. The client can choose what form of communication they want, whether text message, email or snail mail."

Accordingly, Peddie says solicitors will be able to log in to their own secure section of the website to obtain "instant fee quotes, instruct cases online, check the status of cases online with access to milestones or a complete virtual file, and obtain real time management information and reports 24/7".

Their clients will have online access to their entire file via “Track your Case” and will obtain text message, e-mail and internet updates.

The benefits for solicitors, says Peddie, is that they will be able to retain their identity and brand; retain their relationship with their client; retain their client for other more profitable work; and retain their “profit” margin. However they won’t have to "retain, manage and pay for a conveyancing department during periods of economic uncertainty".

SCS also puts solicitors using the service in a win-win situation as far as fees are concerned.
"We will split the conveyancing fee with Bloggs and Co," says Peddie. "We can pay them an element of profit, so for example, if the client pays £600, we could pay Bloggs and Co £200 and we would have £400 out of which we would pay our expenses. It is very much a bespoke service and the fee paid and the way it is split will depend on the client and the type of transaction. Each firm will have a separate table of fees for them. Visualfiles is very adaptable so we can adapt to any firm. We could, for example, have separate fee scales for different offices of a particular firm, for example, a separate fee scale for a firm’s west of Scotland office and their east of Scotland office.

"A lot of firms are finding conveyancing is not a profitable area to be in, so are carrying overheads but not getting a profit. They are retaining their conveyancing departments without income stream and no prospect of knowing when it will change. They could have five conveyances a year, but this way it will be pure profit for them with no overheads."

From the client’s perspective, it will be as if the work is done through a department of the firm they initially approach, and all correspondence will bear their lawyer’s logo as well as that of Your Conveyancer. The firm will not need to spend money on maintaining its conveyancing department but will be in a position to reap some of the profits from work that is passed on.

Peddie says: "There is no initial outlay for firms, no cost involved, as we will handle all the branding and create letterheads. There is no charge for these services.

"We only do domestic conveyancing so we pose no threat to them in terms of stealing clients."
He says the process will be transparent from both the client’s and the client law firm’s point of view.
"The client gets a log-on. The process is transparent. Every telephone call will be logged. A lot of firms hold things tight to their chests, say a letter has been sent out in the post that day when in fact it hasn’t, but we won’t be able to do that. Everything that has been done on behalf of the client will be logged and will be available for the client to see, down to the last phone call.

"It will be faster because it is electronic and it is totally secure.

"The whole interface has been designed so that we could expand into England and Wales. We are considering this, possibly in January 2009, and we would need to do this in association with an English firm."

(05/09/08)


6.  Experts call for a renewed vision on regeneration of English cities

Responding to the "Cities Unlimited" Report of independent think tank Policy Exchange, five leading organisations representing and advocating the growth of cities across England have stressed the need for a renewed vision on, and commitment to, the economic development of English cities. The report’s suggested model of economic development dependent on mass migration and "palliative care" for certain cities outside the South East has been rejected by the group, which consists of Core Cities Group, Northern Way, Centre for Cities, New Local Government Network and Centre for Local Economic Strategies.
Instead, they are calling for a mature debate on the future of England’s towns and cities, focused on securing continued economic success and structural change. They are also advocating a more balanced view of cities outside the South East, many of which have achieved growth rates higher than the country as a whole in recent years.

Chris Murray, Director of the Core Cities Group, said: "We recognise that London has driven prosperity across the south east, but the eight Core Cities” city regions have a collective economy that is already bigger than London’s, at 25.5 per cent of national output. Is Policy Exchange really suggesting that we can simply move that output to the South East intact? What is more likely is that such policies would empty cities of their 20 per cent most qualified people, overheat the south east, and create more deprivation and vast expense to the public purse. It’s not just that these cities are important to the economy, we simply do not have a viable economy without them".
He continued: "The headline conclusions of the report cannot be taken seriously, but there are some important questions raised by Policy Exchange. How can we empower our cities to perform better economically, what are the key drivers of growth in a shifting economic environment and how can we work together to create a different, ambitious vision for the future of our great cities? We would welcome a mature debate on these issues."

Andrew Lewis, Director of Northern Way, an organisation which brings together the regions and city-regions of the North of England in a bid to promote economic development said: "The description of the Northern cities and regions set out by policy exchange is not supported by the evidence. Many have been growing faster than the UK has a whole, creating new jobs, and attracting substantial private sector investment. An active role from the public sector has helped to secure structural change, moving their economies on from the out-of-date characterisation presented by Policy Exchange. This effort needs to be sustained, not abandoned."

The report controversially suggested that many English cities will never regenerate, and instead called for 1 million houses to be built in each of London, Oxford and Cambridge.

(21/08/08)

7. LGA stresses the importance of keeping families in their homes

Responding to a £1 billion housing package unveiled by the Department for Communities and Local Government on 2 September 2008 in a bid to help first time buyers struggling to get onto the housing ladder, support vulnerable homeowners at risk of repossession, and support the house-building industry, Cllr Paul Bettison, LGA spokesperson on housing said: "Anything that is going to help keep hard working families in their own homes and take pressure off scarce council housing is a step in the right direction. This is a significant package to stimulate the market, help those struggling with mortgage payments and help first-time buyers onto the property ladder."

He went on, however, to imply that the package hasn’t gone far enough: "The reality is that the government is only really able to scratch the surface of a £400bn market. The money made available will only help a small number of people who will need it over the next few years. The proposals will help around twenty thousand families at a time when there are four million people waiting to get a council house." He suggests that the government should seriously consider allowing councils to lend competitive mortgages and borrow more money against their assets, claiming that this "would have been the bold move that would have helped out more people."

On plans to help people at risk of repossession, he commented that allowing councils and housing associations to buy out a stake in a resident’s house will be an effective way of preventing people becoming homeless or having to move into temporary accommodation. On a more negative note, he contended that town halls will have a "real job" managing expectations locally since the money being made available won’t go that far, and stated that, since councils "have to pick up the pieces" when people are repossessed, town halls should be at the centre of deciding where and how any additional money is spent.

Cllr Bettison commended the fact that funding is being brought forward to deal with the shortage of social housing, but stressed the need to ensure that this doesn’t mean housebuilding in the future will suffer as a consequence: "New money must be made available or we’re simply storing up problems in other parts of the housing market." In this regard, he suggests that "Giving local authorities more powers to borrow and allowing them to use money from right-to-buy to increase resources available for housebuilding would give councils real incentives to build more homes."

(03/09/08)

Articles

1. Love thy neighbour
 
Journal: New Law Journal
Citation: 158 NLJ 1213
Issue date: 5 September 2008
Author: James Naylor
Summary: The case of Brooks & Another v Young & Another provides a stark warning to property lawyers, to ensure that express rights of way are clearly and carefully drafted. Further, that when advising upon an existing grant, a cautious analysis as to the grant’s meaning, term and effect is provided to the client. When drafting, plain language should be adopted, spelling out any restriction in certain terms, failing which the restriction will not be fit for purpose, will have no effect, and a professional negligence claim may well follow. 
 
2. Between the devil and the deep blue sea

Journal: Estates Gazette
Citation: Estates Gazette, 16 August 2008, 76
Issue date: 16 August 2008
Author: Zia Bhaloo and John Muncey
Summary: Explores issues surrounding the termination of a lease. Problems may arise where a tenancy is not protected by the Landlord and Tenant Act 1954 but rent is demanded and accepted after the term of the lease has expired. It may be inferred from this that the parties had intended to create a new periodic tenancy, one which could have 1954 act protection. Landlords should therefore be cautious about demanding and accepting rent following the expiry of a lease.
 
3. I'm amphibious about it
 
Journal: Building
Citation: Building, 15 August 2008, 48
Issue date: 15 August 2008
Author: Tony Bingham
Summary: Discusses the Draft Construction Contracts Bill. If it is passed in law it will replace the adjudication and payment law in the Housing Grants Construction and Regeneration Act 1996. The new bill commands that constructions contracts must provide “in writing” the right to adjudicate and the effect of the adjudicator’s decision and if not then the Scheme for Construction Contracts applies. Then the new payment rules also demand that the duty to give notices be “in writing” in the contract or the scheme applies. It would be easier to make the act an implied term that is automatically imported in to the contract. 
 
4. Mortgage fraud on the rise
 
Journal: Solicitors Journal
Citation: 152 SJ 32, 15
Issue date: 12 August 2008
Author: Neil Swift
Summary: Provides an overview of the types of fraud that are likely to come to light, what steps can and are being taken to prevent further fraud, and the impact on the mortgage and property market. The full extent of mortgage fraud arising out of the late 1990s and early 2000s is unlikely to be known for some time. However, it is now apparent that even prior to the credit crunch the incidence of fraud was sharply increasing. 
 
5. Opening up the options for leaseholders
 
Journal: Solicitors Journal
Citation: 152 SJ 32, 7
Issue date: 12 August 2008
Author: Natasha Rees
Summary: Explains the unanimous decision of the House of Lords, ruling that head lessees are entitled to enfranchise, reversing the decision of the Court of Appeal. 
 
6. Know the boundaries 
 
Journal: Estates Gazette
Citation: Estates Gazette, 23 August 2008, 69
Issue date: 23 August 2008
Author: J Small
Summary: Reports the effect of a tough market upon developers is noticeable and has led to legal problems. Considers the issues that are often encountered when a buyer or developer wants to withdraw from a conditional contract for sale.

This e-alert is not intended to provide comprehensive or exhaustive records of information concerning the property and conveyancing sector, but rather to provide a flavour of the issues, news and events which we believe are of relevance to Section members. If you have any feedback or suggestions, please email propertysection@lawsociety.org.uk.

This e-alert was created in conjunction with LexisNexis UK Current Awareness. If you would like more details on any of the articles, please contact claire.melvin@lexisnexis.co.uk. The views expressed by the Legal Analysis interviewees are not necessarily those of the proprietor.  

Please note subscribers can go to LexisNexis Butterworths for further details about all the above articles. Non-subscribers can sign up for a free trial of the online service.