Business-Lawfirm.co.uk Articles

Commercial Property Law

Wed, 01 Feb 2012 18:36:11 GMT

Commercial property law advice is available from our team of experienced commercial property solicitors.

Buying Commercial Property – Legal Advice

When buying a commercial property, you will enter into a legally binding contract with the seller. The contract will set out the agreement you have reached, including how much you will pay for the property. There will undoubtedly be additional legal obligations contained within the contract, so it is always advisable to take advice from a solicitor who is experienced in Commercial Property Law as it is different to buying and selling a house.

Under Commercial Property Law your solicitor will review the title, to ensure the commercial property is clear and can be transferred. It will also include looking at any rights registered against the property and restrictions on how the property can be used. Without such considerations you might discover a commercial property you have bought to use as an office for example has restrictions on rights of way, has been designated for retail use only or confers legal responsibilities on you for upkeep of other parts of the building in which it’s located.

For legal advice on any aspect of commercial property law call Cousins Business Law on 0845 003 5639.

Selling Commercial Property – Legal Advice

If you have commercial property to sell; an office, industrial unit or retail shop, you will want to make sure the contract you have with the purchaser is water tight. You will also want help with negotiation to make sure you maximise your return and get a good price.

If you had poor advice when you purchased the property you may find there are some legal niceties that need to be cleared up before you can sell.

If you are in business and thinking of buying or selling commercial property or land we can help. Call Cousins Business Law on 0845 003 5639.

FREE Download: Quick Guide to Buying Business Premises for tips on issues that may affect your ability to trade, what to look out for in the contract you are signing and why a deal that looks too good to be true probably is. Download here.

Why do you need a shareholders’ agreement?

Tue, 06 Dec 2011 14:22:47 GMT

Many limited companies are started each year by friends, relatives or former colleagues who have a great business idea and a desire to create a successful business. Few, however, appreciate the potential problems they are storing up for themselves by not having a formal agreement in place to set out the ground rules for their ownership of the business, determine the powers of each shareholder or provide a method for resolving disputes between the owners.

The solution is a legally drafted shareholder agreement.

A shareholders' agreement allows the members of a company to agree a range of matters relating to their involvement in the company, so that they will know what will happen in certain circumstances, rather than there either being nothing to govern those circumstances or having a default position implied which might not be that which they would choose. It is therefore a means of ensuring that the company and its affairs are run as you wish.

Some of the main issues which might be addressed in a shareholders’ agreement include:

Financing of the company

what each party is contributing initially and whether as share capital or loan
how any future finance will be raised – will it be by each party contributing in proportion to their shareholding, some other ratio, outside source etc., or how decisions relating to future requirements will be taken.

management of the company

specify what will be the main business of the company
how the directors will be appointed – which may supplement what is contained in the articles e.g. shareholders to be able to appoint themselves or a nominee
appointment of bank, accountant/auditor

dividend policy – will all profits be retained for growing the company or distributed? If not, how are profits to be applied and in what proportions or amounts?

share transfers – in most private companies the members will want to retain control over the shares, so that rather than members being able to transfer them to whoever they want, there will be a mechanism for anyone wanting to transfer their shares to be required to give the other members the first right to buy them accompanied by a formula to value them if the price cannot be agreed. Certain events will trigger those rights e.g. a shareholder being in breach of the agreement, death or ceasing to be actively involved in the business if that is a requirement.

Dealing with deadlock – if the members cannot agree, there are various options which can be written into the shareholders’ agreement to deal with the situation e.g. :

veto – nothing happens without agreement, although that could allow a minority to prevent the majority taking action, so should only be allowed in appropriate cases.
various options are available to allow or require shares to be transferred using bizarrely named formulae such as Russian roulette, Texas or Mexican shootouts etc
arbitration, mediation, independent expert, nominated third party – possibilities although not usually the most satisfactory
winding up – the most drastic option if the parties really cannot agree which might in fact focus efforts on trying to find a solution.

Who needs a shareholders’ agreement?

The members of any company with more than one shareholder benefit from having a shareholders' agreement to govern issues between them not only as members of the company – which can be included in the articles – but personal matters.

Shareholders' agreements could be categorised as covering three main situations:

A quasi-partnership – which is the classic owner managed business scenario where two or more friends/relatives/colleagues set up business together via a limited company, but will often refer to themselves as business partners.
A joint venture between two or more existing businesses which may in turn be individuals or limited companies where the parties come together to undertake a new business in the form of a limited company.
An investment from an outside source e.g. venture capital or other private equity investment. The investor is likely to require extensive controls, even if not taking a majority stake, and will often have its own form of shareholders’ agreement and articles with sophisticated share structures, different classes of shares etc.

What could happen if you don’t have a shareholders’ agreement?

Without a shareholders’ agreement there is much more potential for disagreement between the shareholders, particularly if things start to go wrong. Even though the parties will start off thinking they have common goals and ideas as to how to reach them, those views can diverge over time – one may wish to invest any profits and grow the business; others may want to reap the rewards personally by taking out those profits.

If personal circumstances change or, for example, there is an age difference, one may wish to sell his/her shares, whilst the others want to carry on. The leaver may want to keep their shares or may want to sell them for the highest possible price and may not be concerned who buys them. Those staying on might not want the leaver as a ‘sleeping partner’. They would usually want to be able to acquire the leaver’s shares at a fair price, but without prior agreement they would have no right to do so. Without an agreement, they could otherwise be faced with a new owner of those shares with whom they have no previous relationship or knowledge. That new owner may or may not have any skill in the particular business. In a private company the value may be difficult to assess. The shareholders’ agreement can set a procedure and formula, as well as giving the remaining shareholders a right of first refusal on any sale which they would not otherwise have and can include circumstances where a transfer may be required.

When to get a shareholders’ agreement

Now!

It is always easier to get an agreement in place whilst everyone is in agreement. That might sound obvious, but how often do you hear that people have gone into business together saying they don’t need to spend the time and money on drawing up an agreement because they all agree about how the business will be run etc., but then down the line their views diverge or circumstances change and there is a disagreement? That can be much more expensive and time consuming to resolve and whilst their eye is off the ball, the business they have worked so hard to build up will suffer. This puts at risk everything they have invested.

If you’re in business with a partner, family member or friend, or if you are about to embark on a joint venture or take on external investment, talk to us about a shareholders’ agreement - call 0845 003 5639.

Article written by Sue Mann, Commercial Solicitor, November 2011

Tactics to consider when removing a director or being removed

Wed, 30 Nov 2011 12:06:59 GMT

Removing a director from a company is much more complicated than removing an employee. Before this is done, there are several things to consider and tactics to employ.

The first thing to bear in mind is that, in SMEs, directors usually have 3 different legal roles and the legal position of each is different. The roles are director, employee and shareholder.

Need legal advice? Call 0845 003 5639

The Role of Director

The first thing to do is to look at the company’s Articles. In some companies, these may say that a director can be removed by the Board of Directors; otherwise it is the shareholders who can remove a director.

In all cases, a director can be removed at a meeting of shareholders. The procedure is set out in sections 168 and 169 of the Companies Act 2006. 28 days’ notice to call a meeting must be given and the director will be given the opportunity to put their objections in writing and attend the meeting to put forward their point of view.

To remove a director, more that 50% of votes are needed. This obviously causes real problems in companies where there are just two shareholders each with 50% of the voting power.

Before calling a shareholders’ meeting, there are a number of things to consider.

Are you certain who the shareholders actually are? To vote at a shareholders’ meeting, a shareholder must be listed in the company’s Register of Members. Frequently, a new shareholder might not have been formally added to the Register. If this is the case, they might not be able to vote at a shareholders’ meeting.
Check how many shareholders must be present at a shareholders’ meeting to form a quorum and therefore be able to pass resolutions. The default position is two but this might have been changed in the Articles.
Also check whether the Articles have changed anyone’s voting powers from the usual position that their voting power is in accordance with their shareholding.
Another important thing to check is to see whether the Chairman has a casting vote at a shareholders’ meeting. Article 50 of the old Table A (effective for companies that formed before 1st October 2007) says that a Chairman has a casting vote if there is deadlock. Clearly, this is something to watch out for in a 50:50 company where there are two shareholders each with 50% of the voting power.

The Role of Employee

Removing a director using the above procedure does not terminate their employment. If a director is also an employee (which will be the case if they have a service agreement, an employment contract or are paid under the PAYE scheme), then they will also have to be dismissed. This can be done by the Board of Directors. In companies where there are only two directors, the board will not be able to dismiss one of them.

You don’t have to wait for the shareholders’ meeting before dismissing the director as an employee but beware that a director who has been dismissed could also have a claim for unfair dismissal if unfair procedures are followed.

As part of any agreement removing a director, it might be best to have a formal compromise agreement drafted to prevent the director from going to a tribunal.

The Role of Shareholder

Unless the company has a ‘Buy-Back’ clause in a shareholders’ agreement or in the Articles, then removing them as a director and dismissing them as an employee will not stop them from being a shareholder. They must still be invited to shareholders’ meetings and be entitled to a share of dividends.

It is therefore usually best for the company to reach an agreement for the leaving director to sell his shares. Shares in SMEs are very difficult to value and this will need to be done by an accountant. It is often the case that, in an SME, a minority shareholding is worth less than the percentage of shares owned. Often the Articles or shareholders’ agreements (if you have one) will set out how a valuation is to be undertaken and what principles should be applied.

There are some court procedures that the director/shareholder who has been removed can employ.

As a minority shareholder, he could apply to the court claiming he has been ‘unfairly prejudiced’. If the court is of the view that the company runs in effect as a partnership (the courts call this a ‘quasi partnership’), then removing a director would generally amount to unfair prejudice. The court will usually order that the leaving director’s shares are sold and can set a value but has many other powers it can use as well.

If the company consists of two equal shareholders, then the leaving director could apply to the court to wind up the company.

These court procedures can be expensive and usually the costs would have to be paid for by the shareholders as individuals rather than the company. However, as tactical tools available to the director removed, they can be very useful.

Another tactic the company could use when agreeing on any settlement is to see whether the director it wants to remove has been in breach of any of his director’s duties. If so, this might mean the company could make a claim against the director for him to pay back money to the company. But watch out that the other directors have not also been breaching their duties in the same way!

Act Now and Take Advice

No two situations are the same and it can be dangerous to remove a director without considering your legal position and tactics to employ.

There are also many tactics that the director being removed can employ to obtain a better exit settlement.

For advice, whether you’re a company wanting to remove a director, or a director threatened with removal, contact Gary Cousins or by phone on 0845 003 5639.

Tips for avoiding difficulties with personal guarantees

Thu, 27 Jan 2011 09:39:33 GMT

One of the most frequent enquiries we get at the moment is from company directors worried about bank Personal Guarantees they have signed. A Personal Guarantee is generally given by a director as security for money borrowed by a company in which they are also a shareholder. If down the line the business is unable to repay the bank it then looks to the director personally under the guarantee.

Personal Guarantee Review

Click here

The bank usually limits the Personal Guarantee to a fixed amount but in reality the eventual amount owed can be double after interest and costs have been added.

For a director the consequences can be dramatic –involving, for example, selling the family home in order to pay back the bank and/or bankruptcy.

In the rush to set up a new business or get a project underway business owners might be forgiven for taking a casual approach to Personal Guarantees. This checklist of 12 things to consider when taking on a Personal Guarantee liability and how to handle things if the guarantee is called in is invaluable reading for business owners.

Personal Guarantee Tips

Before giving a personal guarantee

Explore other options you might have that would allow the business to borrow money without you being personally liable. Will the bank accept alternative security?
When you give a personal guarantee the bank will often ask for a charge against your house to secure repayment. Think carefully whether you are prepared to put your family home at risk before agreeing to this.
Take legal advice to ensure you fully understand the implications and consequences of giving a personal guarantee. Never just sign a personal guarantee.
If you can avoid giving a guarantee, do so, because it can have severe implications for your personal finances (including bankruptcy) if the company can’t repay.
Where your landlord is asking for a personal guarantee it is usually best to offer a rent deposit instead.
A personal guarantee is usually a continuing security, which means that there is no termination date unless you are prepared to pay the bank the full outstanding balance of the loan.
If you have to give a personal guarantee, cap your liability to an amount you can afford but always remember that interest and costs can be added to the fixed amount.
Check whether you have already signed a personal guarantee with the bank as they are cumulative. This means that if you sign a guarantee with a limit (say of £10,000) and the bank asks you to sign a new guarantee (perhaps because the business needs to increase its loan) with an increased limit (say £20,000) then unless the bank expressly releases you from the first guarantee in writing, your liability will now be £30,000 not £20,000.
If you have any personal savings with the bank these are in danger if the lender calls in the debt.
Consider that if any co-directors have also given the bank a personal guarantee this does not mean that you repay the bank in equal proportions. The bank will go against the director who they believe has the most assets.

Discharging a personal guarantee

The only sure way to bring your liability under a personal guarantee to an end is either to ask the bank to release you in writing (don't hold your breath) or to find the provision in the guarantee document allowing you to terminate on notice. This will cap your liability under the personal guarantee to the amount owed by the company at that time. You should only do this where the company no longer requires the facility or you cease to be a director/shareholder as inevitably the bank will want the money back. Tactically, notice should be served when the business owes the bank as little as possible or preferably nothing at all.
Lastly, only ever sign a personal guarantee if you are comfortable with the risks.

Tactics to use if a personal guarantee is called in

If the worst happens and the personal guarantee is called in by the bank when your business doesn’t have the funds to repay it, for example if you go into administration, you should take early advice and carefully consider the options available to you as the implications of the bank taking legal action can be severe.

You may firstly want to examine whether the guarantee is likely to be enforceable by the bank. For example, is it backed by a charge on your house; was independent legal advice given and can the original signed document be located by the bank?

The next stage is to look at your ability to repay the money. If the bank has a charge your house or believes there are other assets sufficient to repay the full amount then the room for negotiation of a lower figure in full and final settlement is more difficult, but not impossible. If you have little means to repay then the bank will take this into account during negotiations.

As always, tactics and timing are crucial for any director who ends up in this unfortunate predicament.
The Cousins Business Law Personal Guarantee Review can help in these circumstances. For a fixed fee of £95 + VAT, one of our experienced business solicitors will provide you with practical telephone advice on the best options available for minimising the amount you personally have to pay back. With our help clients have been able to secure big discounts and prevent their home from being sold to repay the debt.

If you are worried about a personal guarantee you have given a bank, landlord or other creditor call Nigel Musgrove on 01285 847 001 or email Nigel to take advantage of our Fixed Fee Personal Guarantee Review.

Read more:

Personal guarantee review service launched

How to get paid on time - a guide for SMEs

Mon, 17 Jan 2011 13:00:40 GMT

Getting your bills paid on time is vital to the financial health of your business. It’s often quoted that at least 10% of business failures in the UK are due to non-payment or late payment by customers. Managing your cash flow efficiently could be the key to your business survival.

Not only does late payment cause immediate cash flow problems but it also means additional interest on that company overdraft, put at a staggering £33 million in 2009 according to Barclays. Bacs, the organisation behind Direct Debits, reported that in 2010 SMEs had to wait an average of 41 days beyond their payment terms, over 9 days longer than in 2009.

So what can you do to avoid payment problems?

Here's our 14-point guide for SMEs on how to get paid on time

Carry out credit checks on new customers, and repeat them on a regular basis.
Check references from suppliers.
For each customer, establish a credit policy based on their credit check.
Establish sound debt collection procedures. The longer you leave a debt the more difficult it is to recover. So chase early with a polite call or e-mail.
Consider offering discounts for early payment.
Make sure that you diarise invoices for payment and follow up with regular telephone calls and letters. Make sure you record details of every call. Develop a set of standard format letters with increasing urgency based on how long the debt has been outstanding.
Be polite. Research has also shown that being polite in your communications, such as saying “please” and thanking them for their business, both in invoices and chasing letters, can increase the percentages of invoices paid by 5%.
When dealing with large companies, make sure that you speak directly to the accounts department responsible for administering payments.
Make it easier for customers to pay. Provide BACS details. Perhaps make arrangements for payment by credit card. Or sign up to a pay by phone system such as www.paythru.com. And remember that payments made electronically go through far quicker than cheques.
If the invoice is disputed for whatever reason, establish the reasons and address the issues as quickly as possible. It may be prudent to obtain early legal advice so that you are sure of your position.
Make sure your terms and conditions are up to date and include payment terms and interest on unpaid bills, and also suspension of work in the event of unpaid invoices. There is nothing like stopping work and/or suspending deliveries to prompt payment.
Where you are dealing with a limited company, it may be appropriate to obtain written guarantees from the directors. These should be obtained on or before the contract is established. Guarantees can be incorporated into your terms and conditions to be signed by the directors on their own behalf and on behalf of the company.
Where you do not have terms for payment of interest on outstanding debts, use the threat of recovery under the Late Payment of Commercial Debts (Interest) Act 1998. You should include this in your chasing letters.
If you exhaust all reasonable efforts to obtain payment, consider using a debt collection agency or obtain legal advice on your options.

On the matter of interest, if there is no contracted period for payment, and no convention such as 30 or 60 days has been established, then the default period is 30 days. If the parties have not agreed a late payment interest charge, which must be a "substantial remedy" and not a token gesture; it is 8% over the Bank of England base rate. And it is also possible to claim compensation to cover the costs of recovery, £40 if you are owed up to £999.99, £70 if you are owed between £1,000 and £9,999.99, and £100 if you are owed £10,000 or over. Don’t forget that if you have to sue for recovery you can claim this enhanced interest and compensation.

So for example, if you are owed £10,000, and the date of payment under the contact was 1 December 2010, the daily rate will be £2.33 based on a rate of 8.50%, so at 13 January 2011 you will be owed £102.52 late payment interest, and can claim the additional £100 compensation to cover your costs of recovery.

Legal Action

If the customer refuses to pay you can take them to court and claim the interest and compensation, as well as court costs. Even if you have been paid, but paid late, you can still use the law to recover the late payment interest and the compensation.

If the debt is more than about £5,000 it's certainly worth talking advice from a litigation solicitor who will consider the strength of your case and whether it's worth using the court system to recover the debt and your costs.

It's worthwhile including details of your right to claim late payment compensation in your correspondence with the debtor, and in any chasing telephone calls, as this might encourage them to pay up. Tell them how much the interest and compensation will be. Use it as a bargaining chip to get prompt payment.

You should also consider factoring your debts, a service which is offered by banks and independents such as Bibby Financial Services. This may, where appropriate, provide a solution to your cash flow difficulties. A usual deal will provide an advance of 70-85% of monthly invoices for a charge of 0.1-0.3%.

For advice on late payment of business contracts and dispute management contact Nigel Musgrove, Business and Litigation Solicitor on 01285 847001.

White Papers and Special Reports

Thu, 13 May 2010 14:09:48 GMT

Alongside our numerous articles on the legal issues that impact on businesses and our monthly ezine which provides legal updates, our lawyers write more detailed White Papers and Special Reports, tackling the topics we know SMEs want to hear about.

Special Report: Legitimate tactics for renegotiating your commercial lease

Some business owners assume that once they’ve signed a commercial lease that’s it, they are stuck with the terms. This causes all sorts of concern if they want to downsize, need more space or are struggling to keep up with regular lease payments.

Register to download our Special Report containing legitimate tactics you can use to renegotiate your lease.

The Definitive Guide to Solving Business Disputes

Containing tips from the experts on how to:

prevent and manage business disputes
minimise the costs of disputes when they occur
save on solicitors' fees

Find out more and get your FREE PDF copy of the Guide here.

Quick Guide to Buying Business Premises

With tips on:

Issues that may affect your ability to trade
What to look out for in the contract you are signing
Why a deal that looks too good to be true probably is

PLUS why your solicitor should inspect the premises with you.

Find out more and download a FREE PDF copy here.

Business Law Blog

Keep up to date with our thoughts on the latest legal and business news - follow our Blog.

Employing Young People

Fri, 19 Mar 2010 09:11:45 GMT

Whether you employ young people for paper rounds, to help out in a local shop or restaurant or offer them work during school holidays there are some restrictions to be aware of and rules to be followed if you employ anyone under the age of 18.

So what is the law for England and Wales?

Limits on work for under 14s

Children under 14 are not allowed to work at all except in very limited circumstances involving child actors, advertising and sport, and only then with strict conditions. However they can babysit or do odd jobs for a parent, relative or neighbour. Many local authorities (subject to a permit) allow children who are 13 to do a paper round or other light work not likely to be a health risk or harm their development. It is worth checking the local by-laws and obviosuly you need the permit in place before you take any younster on.

By-laws for those under school leaving age

For children aged 14 and under school leaving age (ends on the last Friday of June in the school year in which they are 16) the local authority by-laws apply, and these may vary between authorities. You need to check with your local authority. In any event a permit will be required from your local authority which will have to be signed by the employer and a parent.

Otherwise the legal requirement is that children aged 14 or above until the last Friday of June in the year they are 16, can only do light work and are not allowed to work in a mine, in transport, on a merchant ship, or in construction or factory work. They are also subject to limits on the hours they can work. They must not work:-

1. before 7am and after 7pm
2. during school hours on a school day
3. for more than 2 hours on a Sunday
4. for more than 2 hours on a school day
5. for more than 12 hours in a school week
6. for more than 8 hours ( 5 hours for 14 year olds) on a non school day
7. for more than 35 hours (25 for 14 year olds) in non school weeks
8. for more than 4 hours without a break of one hour

And the children must have at least 2 uninterrupted weeks of holiday from school in any calendar year.

So you will see that it will be very difficult to employ under 16s for more than a few hours a day except on a Saturday or school holiday.

Limits for those who have reached school leaving age

For children between school leaving age and their 18th birthday the following limts apply:

A maximum of 8 hours a day
A maximum of 40 hours per week
A 12 hour rest break between each working day
A minimum of 2 rest days per working week
A minimum 30 minute rest break after 4 ½ hours
No work between 10pm and 6 am subject to some exceptions and relaxation for work in hospitals, newspaper rounds, bakeries, sports, retail, and a few other areas of employment

Other Rules

It is also important to note that the National Minimum wage applies to those aged 16 or over, and if you are employing anyone under 18 you need to do a Health and Safety risk assessment before taking them on.

Planning Applications and Planning Law Jargon Explained

Thu, 04 Feb 2010 16:48:52 GMT

Dealing with commercial premises on a day to day basis our Commercial Property Team are fully familiar with all the common planning jargon you might come across. In this article we explain some of the most commonly used planning terms from A-Z

Affordable Housing
It is a requirement for most large residential development sites to include a proportion of social housing.

Appeal
If a planning application is refused or not determined then an appeal can be made. These can be dealt with by written representations, hearing or public inquiry.

Breach of condition notice
The local planning authority has the power to serve a notice requiring a planning condition to be complied with.

Brownfield Site
Abandoned or underused industrial and commercial facilities available for re-use. Expansion or redevelopment of such a facility may be complicated by potential contamination.

Building regulations
Building regulations exist to ensure the health, safety and convenience of people in and around buildings, and the water and energy efficiency of buildings. Most works will require Building regulations approval.

Call-in
The local planning authority deals with most planning applications but high profile or major projects can be “called in” by the Secretary of State for determination.

Change of use
For a change of use planning permission will be required except where it falls within the same use class or it is allowed by the General Permitted Development Order. For example B1 (Offices/Light industry) can be changed to B8 (Warehouse/Distribution Centre).

Certificate of lawfulness of existing use or development
An application may be made to the local planning authority for a certificate confirming the lawfulness of a use that has taken place for ten years or works that were undertaken over four years ago both without having originally obtained planning permission.

Certificate of lawfulness of proposed use or development
An application may be made to the local planning authority for a certificate confirming the lawfulness of a proposed future use or development.

Community Infrastructure Levy (CIL)
CIL is set to be the new way of providing for investment in infrastructure through the planning process. Due to come into force in 2010, a local planning authority may levy on the developer an amount based on the increase in land value following the grant of planning permission. The local planning authority will still have available the option to require a planning agreement instead of imposing the CIL.

Commuted sum
Payment made to a local planning authority in place of providing on site facilities such as affordable housing.

Compulsory purchase
A lengthy and complex process whereby property can be acquired by a public authority for a specified purpose. The London Olympics site assembly provides a good example of this in practice.

Conditions
When planning permission is granted the local planning authority can impose conditions. If the developer does not believe these are reasonable they can appeal or after six months make an application to vary the conditions.

Conservation area
A conservation area is an area of land that has been designated to ensure its natural character and appearance are protected. The status imposes additional restrictions on development. Special consent is required before demolishing any building in a conservation area.

Compulsory Purchase Order (CPO)
An order confirming the compulsory purchase of land.

Delegated powers
The local planning authority has the ability to delegate powers to planning officers in respect of minor applications or to issue planning permission following completion of a planning agreement.

Detailed planning permission
Planning permission without reserved matters.

Development
Planning permission is required for all development, which in planning law is defined as the carrying out of building works or a change of use. The only exception is where the General development procedure order applies.

Development Plan
A document put in place by each local planning authority that outlines current planning policy for the area it covers. Planning applications will be considered in accordance with the development plan unless material considerations apply.

Enforcement Action
The extensive powers that a local planning authority has available to enforce planning controls including criminal sanctions for non compliance.

Enforcement notice
The local planning authority will issue an enforcement notice where they have grounds to believe that there has been a breach of planning.

Enforcement time limits
The local planning authority generally only has a certain amount of time in which it can take enforcement action. This is four years after the buildings works were completed and ten years for change of use. Once these time limitation period ends a Certificate of lawfulness of existing use or development can be applied for.

General Permitted Development Order (GPDO)
Permits certain development or change of use without having to obtain planning permission. Although it is important to check whether the local planning authority has excluded these rights in the area where the land is located.

Green belt
An undeveloped tract of land neighbouring an urban area protected from development by the local planning authority.

Infrastructure
Roads and other services which may be required to implement a planning permission. See also Section 38, 104 and 278 agreements.

Injunctions
The local planning authority may apply for an injunction to prevent a breach of planning control rather than take enforcement action.

Judicial review
This is the legal process by which a third party can challenge the decision of the local planning authority. The Court has the power to quash the planning permission if it is proved that the decision to grant was unlawful. Judicial review must be applied for within 3 months.

If a developer enters into a contract to buy land conditional on the grant of planning permission then it should ensure that they are not obliged to complete before the Judicial review period had expired. Likewise most developers will wait for the same period before implementing a planning permission.

Listed building
A building or other structure officially designated as being of special architectural, historical or cultural significance. Most works will require listed building consent from the local planning authority. Interfering with listed buildings without consent is a criminal offence.

Listed building consent
This will be needed for any works which alter the character or appearance of a listed building. If the works also require planning permission this must also be obtained separately.

Local planning authority
The authority that is empowered to deal with planning applications for a particular area. This is often the local Borough or District Council.

Material considerations
The local planning authority can only make a planning decision that conflicts with the development plan where material considerations exist. For example it may take account of the layout and density.

Minded to grant
Where the local planning authority resolves to grant planning permission subject to completion of a planning agreement.

Mixed Use
Development that includes residential and commercial elements.

Non-determination
The term used where the local planning authority fails to determine a planning application within eight weeks. This time limit is extended to sixteen weeks if an Environmental Impact Assessment is required.

Non determination amounts to a planning refusal and can be appealed.

Objection
An objection to a planning application can be made by any third party.

Outline planning permission
An application can be made for outline planning permission. If granted this approves the development in principle subject to a further application for approval of reserved matters.

Party Wall Act 1996
Provides a framework for dealing with matters in relation to party walls, boundary structures and excavations near neighbouring buildings. Anyone intending to carry out work of the kinds described in the Act must give adjoining owners notice of their intentions and otherwise follow the procedure set out.

Permitted development
The general permitted development order outlines the type of development and change of use where planning permission is not required.

Planning agreement
The local planning authority may require the developer to enter into a planning agreement as a condition of granting planning permission. See section 106 agreement.

Planning committee
A group of elected councillors that sit as part of the local planning authority and have the power to determine planning applications. The planning committee will be guided by planning officers but are not obliged to follow their recommendations.

Planning contravention notice
The local planning authority may serve notice on a land owner/occupier requesting information so that it can decide whether there has been a breach of planning control.

Planning obligation
Duties imposed on a developer to provide a benefit to the community e.g. build a new school. These are usually contained in a planning agreement.

Planning officer
Responsible for dealing with development and planning matters for the local planning authority. The role includes making recommendations to the planning committee.

Planning permission
The permission required to carry out development.

Public inquiry
A way in which a planning appeal can be dealt with by the planning inspector. The other two are by written representation or a hearing.

Refusal
The refusal of an application for planning permission.

Reserved matters
Outline planning permission is granted subject to a condition requiring the subsequent approval of one or more reserved matters. These relate to the detail of the development such as layout, appearance, access and landscaping.

Section 38 agreement
An agreement under section 38 of the Highways Act 1980. A developer agrees to build a road to a specified standard and will generally lodge a bond to secure performance of this obligation. The highways authority in turn agrees to adopt and maintain it after the expiry of a maintenance period.

Section 104 agreement
An agreement under section 104 of the Water Industry Act 1991. The developer agrees to construct sewers to a specified standard and will generally lodge a bond to secure performance of this obligation. The water company in turn agrees to adopt and maintain them after the expiry of a maintenance period.

Section 106 agreement
An agreement made under section 106 of the Town & Country Planning Act to secure a planning obligation.

Section 278 agreement
An agreement made under section 278 of the Highways Act 1980 to allow developers to either pay for or carry out works to a public highway.

Statutory challenge
Some planning decisions may only be challenged under the Town & Country Planning Act and not by judicial review. The time limit for instigating such a challenge is six weeks.

Statutory consultation
When the local planning authority receives a planning application it must also consult with other relevant bodies such as the highways authority before making a decision.

Stop notice
This is a measure used by the local planning authority in conjunction with an enforcement notice to bring an immediate end to an alleged breach of planning control. Stop Notices are rarely used as the recipient can claim damages for improper use.

Sui generis
In planning terms it relates to a use that is unique and does not fall within a particular use class e.g. a nightclub.

Town and Country Planning Act 1990 (TCPA)
The main piece of town planning legislation.

Tree preservation order (TPO)
Trees can be protected by a preservation order. This makes it an offence to top, lop or fell it without the consent of the local planning authority.

Unilateral undertaking
A unilateral undertaking is a planning obligation offered by a developer to the local planning authority either in support of a planning application or more commonly during the course of a planning appeal.

Use classes order (Town and Country Planning (Use Classes) Order 1987)
Under the schedule to this order, land uses are arranged in classes, for example shops and offices. A change of use within a particular class does not require planning permission.

If you don't want to try and find your way around this jargon when you are trying to buy business premises call Paul Harrison Property Solicitor on 01604 456 591.

Licensing Law Update - January 2010

Fri, 22 Jan 2010 15:46:49 GMT

This briefing note explains some new laws and other changes to look out for.

With election fever setting in the government is frantically trying to put its house in order, and also trying to stay one step ahead of the opposition when it comes to the issue of binge drinking. Minimum pricing does seem to be high on the agenda and a distinct possibility whichever party wins the election.

Electronic Licensing Applications

The necessary legislation was only passed on 3 December, and came into force on 28 December. But I suspect that many Licensing Authorities are still not geared up for electronic applications. Most make no mention of this possibility on their websites.

The electronic system will apply to most licensing applications and notifications such as applications for and variations of Premises Licences, and Temporary Event Notices, but it will not be possible to apply on-line for Personal Licences and renewal of Personal Licences, and reviews of Premises Licences. These will still have to be made in paper format.

The good news is that the government have seized the opportunity to sort out some of the red tape that made the process so tiresome and expensive. For example, with electronic applications it will be the Licensing Authorities who will have to copy some applications to the Responsible Authorities such as the police, fire authority, planning, and trading standards. This will make life a lot easier and cheaper for the applicant. Also they have been forced to look at the requirement for plans. Can you imagine trying to send a 1:100 plan electronically? So they have abandoned a scale requirement, and will insist that the plan must only be "clear and legible in all respects". The other good news is that the relaxation on plans will also apply to paper applications.

So how will this work? A central information portal will be established on the business link website www.businesslink.gov.uk. It will go by the name of Electronic Application Facility (EAF). Licensing Authorities can opt to set up their own portals, in which case there will be a direct link to them from the EAF. Of course an important part of the system will be the ability to pay on-line, as no application can be accepted unless and until payment is made.

I know that there will be teething problems with the new electronic process, and it might be wise to avoid it for the first few months unless in an emergency. It will be especially good for service of Temporary Event Notices which are quite simple to deal with.

Major changes from the end of January 2010

The Policing and Crime Act 2009 of November allows members of Licensing Authorities to object to applications and initiate a review of a Licence, gives power to the government to impose new mandatory conditions on Premises Licences and Club Registration Certificates, will make it an offence to sell alcohol to children on 2 occasions (currently 3 occasions) within 3 consecutive months (in addition to other offences), and will introduce a whole new regime for Sexual Entertainment Venues.

The following changes will come into force on 29 January 2010:

Allowing members of Licensing Authorities to object to applications and initiate a review of a Premises Licence or Club Registration Certificate
Making it an offence to sell alcohol to children on 2 occasions (currently 3 occasions) within 3 consecutive months
A new offence for under 18's of persistently possessing alcohol in a public place (3 or more occasions in 12 consecutive months)
Changes to the law on confiscation of alcohol from under 18's and directions to those aged 10 or over to leave a public place

More in store

So what else is the government addressing in "Johnny come lately style"? Well, they have issued a new consultation (responses by 9 February 2010) to address issues we have been complaining about for many years. Firstly they are proposing to allow 28 days rather than 7 days for the issue of an Interim Authority Notice after death or bankruptcy. Remember the Welsh pub which had to go dry for 2 months whilst they got a new Premises Licence because the grieving widow of the Licensee did not (understandably) get in the notice within 7 days of her husband's death? I and others said back in 2002 that this was bonkers and should be changed, but I suppose better late than never.

And the government have had a look at Temporary Event Notices, and propose that the Police should have 2 working days rather than 48 hours in which to object, and (hooray!) have proposed that even late Temporary Event Notices (less than 10 working days before the event) could still be allowed if the Police give permission.

And finally, the voices that have long been complaining that the Licensing Act 2003 has been killing music in pubs, have been listened to. There is a consultation running until 26 March proposing that live music will be exempt from the 2004 Act provisions for audiences of no more than 100. This would if implemented allow pubs, village halls, even cafes restaurants and record shops, to put on small scale live music events. But the performances must be indoor and between 8am and 11pm, and there would be a provision for objections in the case of specific venues.

It’s a case of watch this space to see the final result of the consultations and the impact of some of these changes.

Need advice?

For more information and advice on licensing law and the impact of these changes call Nigel Musgrove of Cousins Business Law on 01285 847001 or email Nigel here.

Dispute Resolution - Neutral Evaluation

Thu, 21 Jan 2010 10:20:41 GMT

Also known as Early Neutral Evaluation (ENE), this alternative dispute resolution (ADR) process emerged in the late 1990’s. The main difference to the other forms of dispute resolution is that any evaluation is non-binding.

So why would a non-binding evaluation be of any help? The key is that the evaluator is usually either a judge or QC, someone who is used to court trials as well as having legal expertise and experience. If a technical issue is involved they may also be chosen because of their expertise in that area. The idea is that their decision would be very persuasive and be a strong indicator of the likely outcome if the matter went to trial.

Early Neutral Evaluation can also be useful to clear a stalemate when other forms of dispute resolution are being used and it is necessary to resolve a dispute of opinion on a point of law or technical point on given facts.

The parties can agree the process for Early Neutral Evaluation, including the evaluator. Costs can be kept down by limiting the documentation and keeping to a case summary rather than preparing expensive witness statements.

Early Neutral Evaluation is encouraged in high value complex cases which would be dealt with in the High Court, particularly the Technology and Construction Court and the Commercial Court.

The disadvantages are that the process can be expensive and usually each party pays their own costs and their share of the evaluator’s fees, whatever the outcome. But it may be a worthwhile process when the costs of trial are huge and the parties want some early indication from a neutral evaluator of how the case is likely to be decided.