9 minute read
SBT Legal
from SBT issue 450
SBT
LEGAL
BY MAYO WYNNE BAXTER
BY ALEX JONES, 365 EMPLOYMENT LAW
SBT LEGAL SPONSORED BY:
The topic of Leasehold Reform has been hot in the press and media for quite some time now, whether it is to do with extortionate doubling ground rents, developer’s charging large sums of money for the owners of leasehold houses to buy their freehold, or cladding that does not meet fire safety regulations, for the last two years we seem to have been gaining some momentum with regard to potential reforms; has the Government finally listened? In 2020 the Law Commission published three final reports on Leasehold Reform. The reports addressed buying your freehold or extending your lease, including the options to reduce the price payable and exercising the right to manage. The Law Commission was also tasked with considering how to reinvigorate commonhold tenure, which was introduced by the Commonhold and Leasehold Reform Act 2002.
Legal
In January of this year, the Government announced that legislation would be introduced, in this parliamentary session, tackling some of the areas in which reform has been recommended. One of the most common questions now posed to the Enfranchisement Team here at Mayo Wynne Baxter is ‘will the reforms help me, and if so, how?’
The proposed reforms can be summarised as follows:
• A right to a new 990-year lease for owners of flats or houses • The reduction of the ground rent to nil • The removal of marriage value from the amount payable to the freeholder • The creation of a simple Government backed lease extension price calculator
The Government has only, so far, tackled one of the above four items: ground rents.
Unfortunately, high/onerous/doubling ground rents are causing a number of issues in the leasehold market. We are faced with mortgage lenders that refuse to lend on leasehold properties where the ground rent doubles every 5, 10 or 15 years throughout the term of a lease. It is the stance of mortgage lenders that seems to be driving the response from buyers, and in the market in general. A buyer will not take the risk of purchasing a property that they cannot get a mortgage for, either now, or at a later date. In addition, even if the ground rent in a lease doubles less frequently; say every 20, 25 or 33 years, buyers are still reluctant to proceed AND sellers are then faced with the prospect of spending, in some instances, large sums of money to remove the doubling ground rent. High yearly ground rents also pose an additional risk; that is if the ground rent goes over £250 per year (£1000 a year in London), then the lease is classed as an Assured Shorthold Tenancy and the Landlord has a mandatory ground for possession if you are in arrears.
The ‘ground rent crisis’ has to be tackled, and the Government has attempted to do so; draft legislation has been published and is currently being considered.
The draft Leasehold Reform (Ground Rent) Bill that has been produced will apply to new long leasehold residential properties. It will not apply to current Leases, or retrospectively. Long leasehold means a lease of 21 years or more. The only ground rent that a freeholder (Landlord) can charge in a long Lease cannot be for more than one peppercorn per year. The draft Bill also bans freeholders from charging administration fees for collecting a peppercorn rent. Freeholders that charge more than a peppercorn also face being fined up to £5000. The draft Bill will apply in England and Wales.
The draft Bill is currently on its 1st reading with the House of Commons, having completed five stages with the House of Lords (1st reading, 2nd reading, committee stage, report stage and 3rd reading). There are also five stages to go through the House of Commons before amendments are considered and made (if agreed) and the Bill receives Royal Assent.
An amendment has been requested to the draft Bill, aiming to ensure that the Government does introduce further legislation, at a later date, which removes ground rent for all leaseholders. It is too soon to know if this amendment will be accepted.
In short, if you already have a high yearly or doubling ground rent, the draft Bill will not help you. In addition, if you are looking to purchase a new leasehold property, high or doubling ground rents can be imposed if and until the draft Bill receives Royal Assent. The draft Bill in its current format could also be amended. We will have to wait a few more months before we know what the final Bill will look like.
We also still have a long way to go before Leasehold Reform has a meaningful impact on existing leaseholders.
Charlotte Clarke
Charlotte Clarke
Associate Solicitor Tel: (01273) 477071 Email: cclarke@mayowynnebaxter.co.uk
As an employment law specialist for over 20 years, the issue of equality and diversity in the workplace has evolved over time, in terms of both the legal protections afforded to workers, and the cultural shift in attitudes to workplace equality.
Whilst those cultural attitudes have evolved, for those workers who are on the receiving end of discriminatory acts, it is often harder than ever, in practical terms, to enforce the rights they have.
Discrimination and the Law
The rights that workers have in respect of non-discrimination are under The Equality Act 2010. This piece of legislation, when brought into law, largely combined the various non-discrimination rights under legislation such as the Sex Discrimination Act, Race Relations Act, and Disability Discrimination Act into one piece of legislation. Whilst it updated some interpretations of rights, based on case law, it was largely aimed at harmonising the various rights that had been brought in over the previous 10 or so years. The Equality Act provides protection from discrimination for workers, employees and, in some cases, the self-employed, on grounds of nine “Protected Characteristics”, namely sex, race, disability, age, religion and belief, sexual orientation, gender reassignment, marriage/civil partnership and pregnancy/maternity.
For obvious reasons, some of those protected characteristics apply to all, Legal and some to qualifying workers i.e. disability, maternity, but the simple position is that workers are protected from discrimination on grounds of those protected characteristics. That discrimination applies to both direct discrimination, which cannot be justified in law, and indirect discrimination, which can only be objectively justified as a defence. The rights relating to disability also have a duty, on the employer, to make “reasonable adjustments”, and in respect of maternity rights, these overlap with
sex discrimination rights, particularly in respect of flexible working.
Practical Considerations
I often deal with employers who have had employment tribunal claims brought against them for alleged acts of discrimination. This is from both the perspective of defending those claims, and bringing them for workers. Whilst some acts of discrimination are aggressive and obvious, many are not, and some of the examples that I see are easily avoidable. I have specifically seen the following examples come up regularly:
1)“But we have all of the Policies in place”
Employers often obsess over policies, particularly relating to non-discrimination. They spend a lot of time putting them in place, and often train staff on them. This is where the problems start for them, because they then do not consider actual discrimination in the workplace, the triggers for it, and when it has taken hold. I have often seen examples where despite obvious evidence of workplace discrimination, the employer often refuses to accept it can be occurring, because they have the policies in place that indicate it is not tolerated. It is good practice for employers to bring in someone external, even on an annual basis, to road test their policies through some practical examples.
2) “We have followed the Flexible Working Policy”
Subject to qualifying criteria, employees have the right to request flexible working through a process set out in law. That process is only the right to request flexible working, not have it granted. Employers often, as a result of that, have a silo mentality about a flexible working request. If an employee requests flexible working, through the process or otherwise, and the reason for that request is for a protected characteristic, the employer needs to engage with the reality of that request, and not rely on the process as being one of request only. I have seen lots of examples where employers refuse a flexible working request, because the process lets them, without understanding that any such refusal could be discriminatory. This is particularly prevalent over the issue of employees returning to work part time after maternity leave, or in respect of reasonable adjustments as a result of disability. I recently represented an employee who had made a flexible working request, which had been refused under the policy, that by it’s refusal was a failure to make reasonable adjustments due to that employee’s disability, and therefore discriminatory. Even up to the final hearing, the employer could not understand how the discrimination had arisen, when they had complied with the Flexible Working request process.
3) “We treat everyone the same”
The whole purpose of discrimination legislation, is to even the playing field. I see a number of employers who have a starting position of treating everyone the same, which then causes indirect discrimination e.g. “we don’t have flexible working and everyone is treated equally”, or “we don’t need to maintain the lift to the third floor, and everyone is expected to take the stairs.” This type of positioning is classic indirect discrimination i.e. on the face of it, everyone is equal, but in practice, it affects one minority group on grounds of their protected characteristic. In law, indirect discrimination can of course be objectively justified, but employers need to think about that in advance.
Enforcement Issues
Whilst the position in law is one of protection for employees, and a means of resolution for both employer and employees, the practical reality is more complicated. The Court and Tribunal system has been brought to it’s knees by a decade of cuts, and it can be up to a year before even basic employment rights come before an Employment Tribunal. This is not ideal for either employees or employers, as the issue hangs over them for an extended period. With that in mind, parties can often engage in practical and constructive settlement discussions, but if that is not possible, the issue is often there for extended periods.
Modern Working
The issue of modern working practices, including remote working, was not necessarily envisaged at the time the Equality Act came into force. A specific update of the law as regards nondiscrimination is needed, as without it, Employment Tribunals will interpret obligations differently, and conflicting legal authorities will arise.
The simple position is that employers who consider discrimination issues in advance, and how they work in practice, will always be better placed than those who don’t!
Please always take advice on any staff related issues.
Alex Jones
By Alex Jones, Managing Director, 365 Employment Law Tel: 01903 863284
ajones@365employmentlaw.co.uk www.365employmentlaw.co.uk
