Top tips when buying property
Here are our top five tips to help you:
Whether or not finance is needed, speak to a broker early on in a transaction and preferably before your agent agrees the main elements of the purchase. Raising finance once exchange has taken place, makes for a fraught completion experience for both you and your lawyer.
2. Planning the completion date
If you are selling a property to raise money for your purchase, ensure that the completion date of the sale is on or before the completion of the purchase. This may sound obvious but it will avoid surcharged rates of SDLT being paid at 3% above the standard rates. These rates are paid even where your main residence is being replaced with the Revenue requiring you to claim a rebate once the additional main residence is sold.
You can also avoid the need to use your cash reserves for a deposit, as a deposit held on your sale can be used for your purchase where the property is in England and Wales.
3. Surveyor’s appointment
Appoint a surveyor. He or she will flag items that you may not necessarily have spotted on your brief viewing and may even give some bargaining power and leverage on the price.
4. Your lawyer
Make and keep a relationship with a lawyer and update them on your transaction. This is particularly important where you are marketing a property for sale, to ensure that deadlines, that you or your agent impose, can be met by buyers. A full sales pack with all title deeds, up-to-date searches, planning and building information can be pulled together in advance.
Plan for exchange well in advance. Weeks of delay can be avoided if all the fact finding has been completed in advance. Attended exchanges do still occur so be prepared.If there are any title difficulties, these can be addressed in advance.
5. Your accountant
Take tax advice. You may not be resident in the UK, you may own other properties worldwide or hold a portfolio of investment property. Early tax advice will be required to work out your CGT (Capital Gains Tax) liability on sale and IHT (Inheritance Tax) liability on death.
SDLT matters will be more complicated, where other property is held and often a detailed assessment is required to determine the SDLT rates payable by you. Where your company owns the title to the property, ATED (Annual Tax on Enveloped Dwellings) charges will be made annually and your accountant will need to claim any exemptions in your annual tax return.
You may have very specific requirements which must be conveyed to all parties. You may want to access the property you are buying between exchange and completion with architects and builders to obtain quotes or for interior designers to start planning works. The seller may even agree to you commencing limited works to help you move forward quickly with your plans.
Where you are buying a bolt hole which is a leasehold property, a landed estate owner may own the freehold, for example the Grosvenor or Portman Estate. Do not be surprised when you are asked for onerous references to obtain the landlord’s consent, in lieu of a rent or service charge deposit.
If you are buying a turn key, consider if there are any service charges for the shared estate roads and whether building warranties for any building works are available.
Where you are buying expensive items of furniture, artwork, electrical items, to be left at the property, a full inventory of those items with costings will need to be included. Such items do not attract SDLT but they must be justifiable in their costings.
Sherrards support New York law firm with a Commercial High Court Claim
The Court found that materials produced in the course of discovery (following an order in the States), could be used in an arbitration being held in London against Dreymoor Fertilisers Overseas PTE Ltd. Discovery had been obtained in order to assist the claimants in pursuing proceedings in multiple jurisdictions.
The judgment paved the way to allow the discovery to be put into evidence.
Click here for the full Judgment.
Sherrards advise European logistics company with an international boardroom dispute
One of the founders and principal shareholders sought to declare unilateral independence and break away from the company. They were in breach of all covenants, restraint of trade and the shareholder agreement, to set up a rival organisation and attempt to take over a number of the company’s overseas offices, staff and clients.
This led to High Court proceedings supported by injunctive relief on a global scale. The team were successful and the case was settled in our clients favour and their client base was protected.
With over 20 years’ experience in Litigation, Matthew takes a pro-active and commercially minded approach. Whilst his emphasis is on dispute prevention, where disputes do arise, he seeks an early and cost-effective resolution, offering strong strategies to ensure a swift outcome for his clients, often utilising processes such as Mediation.
When matters are litigious, he acts for both Claimants and Defendants and has experience in commercial disputes, breach of contract claims, professional negligence claims, disputes between partners, associates, directors, trustees and beneficiaries, as well as in property and construction related disputes.
Matthew has acted in numerous disputes between high-net-worth family members, where his experience and empathy have been welcomed by his clients.
He has a wealth of experience acting for collectors and dealers of classic cars.
Matthew is regularly instructed by overseas clients, particularly from the Middle East, North Africa (notably Egypt), India, Europe, China and Hong Kong. He is a longstanding member of both the Arab-British Chamber of Commerce (ABCC) and the Egyptian-British Chamber of Commerce (EBCC). He is also a member of the Arab Bankers Association (ABA).
He is regularly instructed by foreign law firms and many clients in the Middle East and North Africa see him as their first point of contact when wanting to do business in the UK.
Matthew knows his stuff and does not look to overly complicate matters.
Clients say “his advice and attention to detail is second to none. A real pleasure to work with!”.
We trust that held your attention.
Brexit and the legal industry explored
In a recent article, published by the Law Society of England & Wales, Diana Bentley explores the impact of Brexit on the English legal market by interviewing leading figures in the English legal industry, including Paul Marmor, Head of the Disputes Resolution department.
Paul explains how our membership of the Alliott Global Alliance has assisted our transition into the post-Brexit world. Click here to read the full article.
Foreign investment into the UK limited by national security concerns?
Paul Marmor spoke at the recent annual Alliott Global worldwide conference in Vancouver, on the UK government’s concerns over foreign investment and national security. Looking from a UK perspective, Paul talked about the growing trend, particularly among Western governments, towards scrutinising foreign mergers and take-overs, and even intervening, where there is a perception that national security could be at stake. It is clear from recent British government pronouncements that the UK plans to give ministers more powers to intervene in take-overs of British companies and assets, where national security could be at stake. This marks a real shift for Britain, which has historically been one of the most open and liberal when it comes to foreign direct investment and deals. Paul’s view, having read the British government’s recent papers and listened to what the commentators are saying, is that in practice the British government only expects to block deals in the rarest of circumstances.
Richard Kaplan of New York Alliott Group member, Golenbock Eiseman Assor Bell & Peskoe, presented a US perspective at the conference, commenting that, “While the US has for decades had a national security based regulatory regime governing foreign acquisitions of US businesses (called CFIUS), recent 2018 amendments to the law have widened its scope and given regulatory authorities greater powers to review and approve transactions.” The takeaway, in Richard’s view, is that M&A practitioners in the US going forward will need to consider carefully CFIUS and its broader coverage in every transaction where a foreign buyer is involved.
Paul Marmor added: “Much of the discussion concerns China, which continues to grow as a powerhouse in the global economy. And, of course, with the Trump administration raising tariffs to China, this will have an impact of its own on world trade, but that is another story!”
While at the Vancouver conference, Paul also presented alongside Jeffrey Berger, from Golenbocks, showcasing a separate project on which their two firms have worked together across the Atlantic, highlighting the benefits to their respective clients of being part of a global alliance of law firms. Let’s just hope that governments can also take the view that alliances do work and that global co-operation is the way forward!
That’ll be two Hamburgers, please??
Sherrards’ Nicole Marmor attended a recent gathering of the Alliott Group German-speaking members in Hamburg.
The meeting of German-speaking representatives from the alliance firms included members from all over Germany, Austria, Switzerland, Luxembourg, Belgium and the Netherlands, as well as Nicole, with most of the meeting being conducted in German.
Topics included the impact of Brexit on continental Europe and the issues and opportunities arising, the development of the “gig” economy and closer co-operation between alliance members.
Michael Kohler of Audalis with Nicole Marmor
Chair of the Alliott Group German circle, Michael Kohler (senior partner of Audalis, Kohler, Punge & Partner), comments, “We really appreciate the input from Nicole, particularly her contribution on ways in which German-speaking members of our alliance can continue to work closely together with our British counterparts, following Brexit. It’s really helpful that our respective firms can provide our clients and contacts with an over-arching perspective on what’s happening.”
Nicole Marmor comments, “Sherrards can only benefit from this level of insight. Speaking specifically from a global mobility angle, whatever happens with Brexit, we now live in a very global world. Our clients – whether they’re British, German, Spanish or French or any other nationality – are really going to need to handle their personal affairs across borders, so estate-planning, management, legacy issues, immigration or employment support are more important than ever. To be able to call upon this level of support across Germany and Europe is incredibly valuable to us.”
Sherrards bring China’s largest bike-sharing platform to UK
Sherrards’ China and South-East Asia team helped China’s largest bike-sharing platform company move into the UK and Europe in 2017. The company had built a successful business in China and at the time of its investment into the UK, was valued at up to $2 billion. Their goal was to diversify into the UK and set up a UK base of operations with the maximum of ease.
The team, including Laurel (Xueying) Zhang, a UK qualified and bilingual Chinese lawyer and corporate partner Jean-Paul da Costa, worked with the bike-sharing company on establishing their UK operations. Within 18 months, the company had established businesses in Cambridge, Oxford, Norwich, London and Sheffield.
Sherrards’ corporate and property lawyers moved swiftly through the legal requirements to establish a UK branch of the company with a compliant legal structure. They helped address concerns about data protection, registered trademark applications and negotiated commercial contracts and IT agreements. The firm has also provided support on the legal front in relation to the areas of property, employment and immigration.
The Sherrards team addressed initial concerns about UK regulations by introducing the company to the Department of International Trade (DIT). DIT put the firm in touch with local authorities at the right level, which was pivotal to the company’s success in the UK.
The CEO of the company had been looking for a like-minded team to help him take his business to the international market. Sherrards’ international focus and corporate expertise, as well as Laurel Zhang’s ‘can do’ attitude and passion for the UK as an investment destination, were very helpful in the company choosing the UK for its multi-million pound investment.
The Sherrards team has helped many Chinese investors move into the UK, including a leading provider of genomic services and solutions, a boutique investment bank, a large Shenzhen construction group and a corporation with transport, construction and real estate interests.
In addition to our China desk, we also have a Russia & CIS desk and specialist French and German desks, led by bilingual specialists in those jurisdictions. Other focus areas include the USA and India.
Legal Directories- Part 3: Why do law firms and general counsel work with legal directories?
Sherrards’ head of international and litigation, Paul Marmor, who is also an Officer with the Law firm management committee of the International Bar Association, has moderated a Webinar for the IBA on Why General Counsel and Law firms work with law Firm Directories with a panel including Janet Mcarthy Group Legal Director BUPA, Matt Wilson Associate General Counsel EMEA Uber, David Burgess Publishing Director Legal 500 and Melissa Davis managing director MD Communications. With over 850 registrants from 80+ countries this was a truly international event.
The IBA’s Law Firm Management Committee recently presented a webinar on the growing role that Legal Directories are playing in the legal profession across the globe focussing on why General Counsel (GCs) and law firms work with the legal directories. This is the third instalment in a box set series of the growing influence of legal directions in the legal industry across the globe.
The webinar can be viewed here and below is a detailed summary for readers preferring something to read in black and white.
Moderated by Paul Marmor LFMC Co-Outreach and Education Officer and Head of Litigation at Sherrards Solicitors, the discussion touched on diversity within the sector, improving engagement with GCs and clients, and the benefits of legal directories.
Sometimes considered an unnecessary nuisance, presumably due to the submission process, legal directories are in reality a remarkably valuable resource. Janet McCarthy explained how they can come into their own to help supplement research which can be useful in the context of entering new markets where it can be difficult, on occasion, to access material about firms; she explained that “The research they (the directories) put into independently assess and value…the numerous campaigns and pitches law firms can be an additional reason to use them as a further source of information to corroborate our findings”.
With a previous stint at Arsenal Football Club, though disappointingly not on the pitch, and now as Associate General Counsel for Uber EMEA, Matt Wilson reiterated this view. Due to the nature of the industry, where there are new developments and challenges constantly arising, there is a need for strong external players that can react to any number of issues faced by the business. He explained that “Using the directories is…incredibly valuable, especially when we are looking at markets that are less familiar to us, including some of the markets in the developing world”. The vetting done by the directories helps GCs and clients to gain a sound understanding of suitable firms that have the necessary background and skillset to provide effective solutions for the matter at hand.
Diversity in the legal sector
David Burgess, noted however, that in recent years there has been a shift away from the traditional approach of solely looking at practice areas and client base with diversity becoming an area of focus. “We want to look at what firms are doing to actually improve their diversity and inclusion policies and… to make their law firms a more inclusive place”, he commented amid an explanation of how The Legal 500 is pushing firms towards achieving a fairer balance, in terms of gender for instance, as well as ensuring that talented individuals are better recognised for their work. There is undoubtedly more that directories can do to encourage diversity and inclusion in the sector and David welcomed ideas from attendees to the chat, and more widely, on how to improve further.
Inviting questions from the audience during the webinar, the speakers were asked whether a diversity requirement would work as a pass/fail criterion in a tender – in short, the consensus was that such a feature would in fact function as a deciding factor where competency between competing firms is of the highest level. David notably mentioned that the definition of diversity and inclusion, however, is not consistent across regions as is the case with the US and Asia where requirements of this kind are measured in varying ways.
Matt explained that “One of the reasons why we [Uber] value diversity so much is because it gives us that diversity of thought, background and perspective that allows us to make better decisions”. By working with a diverse team in terms of gender, ethnicity and even experience, the customer base is better represented. Law firms that therefore showcase diversity and inclusion are more attractive to GCs and clients as they are able to demonstrate a better understanding and awareness of the changing market.
Janet agreed adding that utilising “Diversity to solve complex legal problems is consistent with the values and ethos of Bupa’,” and undoubtedly those of many other businesses; the profiling of firms by directories is useful as it provides a good indicator of firms’ appreciation of the modern world as well as the needs of clients. The way in which information is presented by legal directories is key then, as acknowledged by David. He reassured that The Legal 500 was looking at how to “incorporate diversity and inclusion into the rankings in a meaningful way” so that GCs and clients can truly see how firms are actively improving diversity by using their platform and through introducing new policies.
Improving submissions and engagement
Sound submissions to legal directories are of the utmost importance – firms must ensure that the information provided not only evidences all their strengths but is also up-to-date and accurate. David commented that the process is “a fantastic opportunity to do an internal audit” and advised that firms treat the directories as potential clients for whom they need to provide a 30 second overview. He suggested firms ask themselves:
- How can we get across what we do differently?
- What do we have to offer the client?
- How do we understand the client’s business?
- What have we done in the last 12 or so months that can help the client in a way that their current firms cannot?
Melissa Davis, Managing Director of legal PR agency MD Communications, emphasised the value of reliable references. She explained that referees are crucial in influencing rankings and so it is essential that they are firstly, available and happy to provide feedback to directories and secondly, that there is an ongoing working relationship with them. There is little worth in putting forward names if there has been minimal or no interaction with the client in the last year as any commentary from them is unlikely to provide a true picture of the firm’s current position and ability. Time should therefore be taken to select appropriate referees to best support the submission for both team and named indviduals, and to avoid referees being duplicated across departments within the same firm.
A collective point of frustration among the GCs that firms should take note of was the lack of advance warning before their names are given to directories for references. As a matter of courtesy, firms should strive to contact GCs and clients beforehand to acquire their consent; not only does this demonstrate a level of respect and professionalism, but it also helps to maintain that all important working relationship for the future.
Benefits of legal directories
The submission process is often perceived as lengthy, but ultimately the benefits associated with legal directories are worth it. Janet remarked early on in the webinar that not only do the directories save GCs from having to independently research firms, they also function as a reliable tracking tool for any changes within firms.
Aside from profiling, the rankings awarded by legal directories are considered an excellent guide for GCs and clients in assessing the best suited firm, but there are also advantages for the firms themselves. Naturally, how the ranking is used is up to the firm whether referenced in email signatures, in tenders or however else, but Paul expressed his view that that rankings are especially helpful for recruitment, retention and staff morale in a crowded market in the quest for good talent.
Matt added, in response to a question from an attendee of the chat, that the rankings provide a benchmark when receiving advice from a number of firms and also, in ensuring that the firm in question is best placed to provide the necessary advice. As global markets evolve, and new areas of specialism appear, he appreciates honesty about capability. Although directories provide incredibly valuable insight into a firm, it is far better for a firm to be candid about whether their practitioners have the necessary expertise as getting caught out can only have detrimental consequences.
Key lessons to take home
Janet: Directories are really useful to GCs and if they are not already being utilised, they should be! It is important that there is an “alignment of shared values and purpose” between firms and GCs and to approach business with the same set of values – “if you can get that trust element right, then you’ve done extremely well to building a long-term sustainable relationship”.
Matt: GCs rely on directories as a vetting tool, especially in industries that are rapidly expanding; the information provided helps to benchmark when reviewing, from a panel for instance, and get a reliable overview of a particular firm. Aside from this, firms should bear in mind that communication and engagement is key – GCs are usually happy to feedback to directories where a firm has performed well, but advance warning is inevitably preferred for a more favourable reference.
Melissa: Directories and the rankings they award can be indicative of performance, but also can help firms themselves in terms of recruitment and retention so it is beneficial to be proactive – not only do submissions need to be supported by strong references, but information in the public domain should be kept updated to allow researchers for the directories to get a better idea of the firm as a whole.
David: Directories are very “plugged into the market’” and there are constant conversations with GCs about what firms are doing so there should be real regard for the overall culture and attitude that may be perceived externally – there has been a shift away from focussing only on practice areas so firms must be able to demonstrate their awareness of the changing world by continuing to interact regularly with clients and GCs.
As a final note, the IBA Annual Conference is set to take place in Seoul later this year. Running from 22-27 September, the conference is a great opportunity to join the debate on the future of law and build invaluable connections with leading international practitioners.
For more information on the conference, and to become a member of the IBA, click here.
The IBA’s Law Firm Management Committee will be holding its own open forum in Seoul on 24th September so please do join us there, or alternatively contact Hanim Hamzah to get involved with the committee.
Business Brexit Checklist
A few businesses are already setting up subsidiaries in the UK and the EU to deal with many of the issues arising from Brexit.
Whether you are already operating from the UK or managing a production line across the Channel, considering setting up or buying a business, here are some tips to bear in mind in the event of a “no-deal Brexit”:
- Mergers & acquisitions – if you can manage the risk of currency volatility, then at law, the event of “Brexit” is unlikely to have a major impact on the regulations relating to UK share sale/purchase transactions unless they are affected by competition regulation.
- Employment – Unless special arrangements are put into place by the UK, employing and recruiting new EU nationals in the UK will require work and residence permits. Each European country (UK included) is currently setting out their own set of rules.
- Shorter contracts – Your business model should allow enough margin to absorb currency fluctuation which will also have an adverse effect on your ongoing contracts if they cannot be terminated on short(er) notice.
- Transfer of EU data to the UK – It is not expected that the EU will confirm on short notice that the UK legislation is “adequate” to allow the transfer without additional protections of personal data to the UK from say a French or German company. Until then, businesses will need to use EC Standard Model Clauses. However, these clauses do not cover all circumstances.
- Intellectual property rights (IPR) and parallel imports – IPR will need to be registered both in the UK and in the EU. In addition, UK businesses will no longer benefit from the EU doctrine of exhaustion, which prohibits IPR holders from enforcing their rights in respect of the resale of goods originally sold in the EU with their permission. This will give more opportunities to EU businesses to block parallel imports in Europe from their UK competitors. Consider also changing your “.eu” domain name now.
- Cross-border traders – Suppliers are advised to set up companies in the UK to ensure the continuity of the production and reselling chain and keep their market share in the UK. If you buy your components from local suppliers, have you thought about conducting an audit of where they source their materials?
- EU regulations – Review your contracts to address issues such like a reference to Italian/EU law as the applicable law to the contract, or a EU court (say Paris court) being competent to hear a dispute, or where the territory of your contract states “the EU”, or where the contract refers to a EU regulation. For example: is your business subject to the EU’s eCommerce Directive? Or what steps might you need to take to comply with separate UK and EU regulators in the future?
- Distributors’/resellers’ insurance documents and trade/VAT/import papers should be in place and in this context, consider some of these questions and consider training staff:
- Are you familiar with terms such like: INCOTERMS, or being registered with an EORI number, being an Authorised Economic Operator, processing a customs and Safety and Security Declaration, the temporary tariff schedule for imports to the UK?
Do you know which country would be best suited to support your supply chain to EU customers/suppliers?
- Do you have access to bank guarantees required by Fiscal Representatives?
- If you are a business that is stockpiling, have you checked with your insurer or insurance adviser on whether you are still fully insured?
- Are you familiar with terms such like: INCOTERMS, or being registered with an EORI number, being an Authorised Economic Operator, processing a customs and Safety and Security Declaration, the temporary tariff schedule for imports to the UK?
Your business does not have to deal with Brexit alone. Please contact Paul Marmor as well as your tax advisors who should be able to assist.