September 2011 – Advice on keeping your website legal


Business Law Update
September 2011

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Gary CousinsWelcome to our September newsletter.

This month, there’s a question and some pointers for all website owners. In our blog round up, there’s advice for construction and engineering companies as well as for those in the pub trade and music business. Our useful links section provides a link to essential advice for business owners when choosing a lawyer.

We hope you will find information relevant to your business in this month’s issue. Email your article suggestions or legal questions to       

Gary Cousins
0121 778 3212

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Is your website legal?

There are more illegal websites on line than you might think and yours might be one of them!

Now I’ve got your attention, let me explain. Every website should have a set of policies, designed to protect you and also the visitors to your site. If you sell products or services via your website, the requirement is even greater: not only do you need a Terms of Use and Privacy Policy but you also need detailed Terms and Conditions, which need to cover such things as delivery arrangements, the refund process and policy, as well as provide protection by limiting your liability. There’s more for online retailers in our article How to sell on the internet in safety.

But even simple information websites like this one need a set of policies to protect the user AND, perhaps more importantly from a commercial point of view, to protect your business.

A Terms of Use Policy is becoming increasingly important as more and more websites incorporate things like blogs and forums, and allow people to comment on content and previous postings. It’s always sensible to screen such contributions in any event to remove any offensive, inaccurate or libellous remarks, but a well-drafted Terms of Use Policy can also cover your liability for any links to other websites and the overall accuracy of content.

Your website Privacy Policy became increasingly important back in May 2011 when the new rules on the use of cookies came into force. New rules (the Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011) mean that you now need consent from the user to store a cookie on their computer. There’s a bit of a stay of execution on actually policing that new rule but doing nothing isn’t an option, as I explained in an earlier blog (Time to comply with new rules on the use of cookies).

At the very least your Privacy Policy should explain what information about users you collect via your site, and how and for what purpose this is stored. So, for example, if people can subscribe to a newsletter, provide their email address to download a document or, if they provide you with their name and address so that you can dispatch the product they have purchased, you MUST explain how you comply with the Data Protection Act in storing and using their data.

And there’s one final area where some website owners fall down and that is they choose to ‘borrow’ policies from someone else’s website. Not only is this against the law – it breaches copyright rules – but it’s also unlikely to afford you the protection your business needs as there’s really no such thing as ‘standard’ terms and conditions - every business and website is different.

Our advice? If you’re investing in a website don’t scrimp on making sure it’s legal! The OFT’s Distance Selling Hub mentioned below provides some useful pointers for those using a website to sell products and services.

For advice on making sure your website complies with all the necessary rules call Sue Mann on 0121 246 4437 or email Sue here.

Plain English Legal Advice

Lease negotiation advice for tenants

Before signing a lease of business premises, tenants should always try and negotiate the best deal with a landlord or their agent.

In his latest blog, Commercial Property Solicitor, Paul Harrison, provides a useful list of the key things to ask for and check: 

  1. Get expert advice on the rent
    A tenant should not just rely on the landlord’s view on the market rent for the property. If in any doubt, get your own surveyor to give a valuation.
  2. Service charge cap
    Payments towards the landlord’s costs of keeping the external, structural and common parts of a building/estate are the source of frequent disputes. The tenant can avoid this and fix liability by agreeing an annual maximum service charge payment.
  3. Planning use
    Make sure the property has the right planning permission for the proposed use: e.g. a retail shop is Use Class A1.
  4. Taxation
    Ask the landlord whether VAT is charged on the rent. The landlord should be able to advise you on business rates but, if not, check the Valuation Office website for the rateable value and don’t forget to claim Small Business Rates relief from the local authority if you are entitled. Check whether stamp duty is payable on the rent. A rough calculation is to multiply the VAT inclusive rent by the number of years in the lease. Any amounts over and above £150,000 is payable at 1%. There is a calculator on HMRC to give the exact amount.
  5. Break Clause
    If agreeing to a longer lease, it would be prudent to agree a break clause in case the business grows and you need more space or alternatively want to downsize. Once agreed, the break clause should not contain onerous conditions. If the landlord will not agree a break clause then ensure you have the ability to assign the lease to a third party or sublet.
  6. Will my lease be protected?
    Normally a lease of commercial premises will have the benefit of security of tenure. This means that, at the end of the lease term, the tenant is automatically entitled to a renewal lease unless the landlord can prove to the court certain conditions, e.g. an intention to redevelop. Many landlords like to exclude this protection and so tenants need to consider whether location is integral to the goodwill of the business before deciding to give this up.
  7. Ask for a rent free period at the start of the lease to cover any fitting out works required
  8. Consent for alterations and signage
    Most leases prevent any alterations without the consent of the landlord and the same goes for signage. Send to the landlord at an early stage plans and a specification of any works so approval is not a problem later on. Remember some works/signage will also require planning permission and/or building regulation approval from the council.
  9. Would it help to pay rent monthly rather than quarterly to help with cash flow?
  10. Do you need a schedule of condition?
    If the premises are not new or in perfect condition then it is always a good idea to agree with the landlord that a photographic schedule of condition be annexed to the lease to evidence how the premises need to be handed back at the end of the lease term. This could avoid a costly dilapidations claim against the tenant.
  11. How and when will the rent be reviewed?
    The most common method to review rent is for it to be the open market rent for the premises at the date of the review. From a tenant’s perspective this would ideally be no more frequent than every 5 years. The other methods are to increase rent in line with inflation (RPI) or based on turnover. These clauses are usually heavily weighted in favour of the landlord and should be scrutinised by the tenant’s solicitor in detail. Otherwise the rent will invariably only be reviewed upwards or remain the same as before even in a market where the rental value of the premises has fallen.
  12. Consider what other security the landlord may require
    If you want to put the lease in the name of a new limited company with no trading history then the landlord will most likely insist on extra security. This could be a rent deposit where a sum of money is lodged with the landlord and/or a director’s personal guarantee. Always take professional advice before agreeing to any other security to ensure you are not giving more than is reasonable and you are aware of the risks.
  13. Buildings Insurance
    Check how much you will be asked to contribute towards the landlord’s policy.
  14. Landlord’s legal costs
    Don’t agree to pay them as it is not standard practice.
  15. Compliance with Legislation
    It is up to the landlord to provide copies of an Energy Performance Certificate and asbestos survey/management plan. The tenant will need to carry out a fire safety risk assessment.
  16. Instruct a solicitor to negotiate Heads of Terms and the lease
    Many small and new business tenants end up negotiating leases themselves, usually with a surveyor acting on behalf of the landlord. This will put a tenant at a disadvantage as they are dealing with a professional who negotiates leases every day for a living. This is why we offer a fixed fee service to negotiate Heads of Terms and the new lease for tenants so that they can save money on business premises from day 1.

If you are a business considering taking on a new lease of commercial premises or just renewing an existing arrangement, please call Paul Harrison on 01604 456591 for an initial telephone consultation.

Blogs in brief 

Changes ahead for the Construction Sector
Commercial Contracts Solicitor, Sue Mann, explains how changes coming into effect on 1st October 2011 mean the issue of how you contract becomes even more important for companies in the construction and engineering sectors. Read more…

Live music – what’s all the song and dance about?
Proposals were recently thrashed out in Parliament which could see a relaxation in regulation currently strangling the music scene in pubs. Read more...

Riot compensation for businesses
Nigel Musgrove offers up some useful advice to businesses affected by the recent riots. Read more... 

Useful Links

Guidance for those selling at a distance
Retailers and business organisations selling via the internet, phone, mail order, email or text will find the Office of Fair Trading Distance Selling Hub a useful starting point for information and advice. The site includes an online guide to the regulations that apply when selling goods and services at a distance as well as a series of checklists which will help you determine whether you comply with the rules.

5 questions when choosing a lawyer
Real Business recently published a useful article detailing the questions entrepreneurs need to ask when choosing a lawyer. We’d add a few additional questions too: Is the lawyer a specialist in their field? Do they understand your business sector? Can they provide commercial advice in plain English? If they fail on any of these questions you might think again about using them in the future. Those looking to appoint a lawyer will also benefit from our article How to get the best from your lawyer.

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Cousins Business Law is a member of the Law Society & regulated by the Solicitors Regulation Authority under number 485128. Head Office: Swan House PO Box 11543, Birmingham, B13 0ZL. Tel +44 (0)121 778 3212. Fax: +44(0)121 275 6155