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When we act on the sale of a leasehold property one of issue we often come up against a is the management pack. With a leasehold property the owner of the property owns the building but not the land and this is retained by the landlord otherwise known as the freeholder. The freeholder will have control over the common areas such as landings stairs gardens etc, these are generally managed be a management company who then charge the flat owners a charge known as a service charge. . When the property is being sold the seller will be requested by the buyer to provide a management pack and this will detail the service charge for the property, what services are provided, what anticipated service charges are for the future etc.

The problem we have is that the management company can charge varying sums for such packs and quite often the seller has not allowed for this is the sale fees.  We are not able to tell the seller at the outset what the cost of the management pack will be until the management company have informed us and most management companies charge different amounts.  the other issue with the management pack is that it can take time to come through.

At Fidler and pepper we have a dedicated team that deal with leasehold property and will try and obtain the management oack for you right at the outset to avoid delays.

If you are planning to sell a leasehold property then please contact Maddie Sault our specialist leasehold fee eraner and she would be more than happy to provide you with a fixed fee quote for the work.




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Commercial, commercial property, Lease, Uncategorized    No Comments

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If you own a commercial property or are thinking of investing in a commercial property with a view to letting the property out you should consider investing by way of a SIPP or a SSAS.


A SIPP stands for Self Invested Personal pension and a SSAS is small self administered scheme.


My clients who have invested through such pension schemes already either own the property and let it to their company or are buying it with a view to letting it to their company. What happens then is that the rent from their company is invested into their pension scheme.


The benefits of investing through a SIPP or SSAS include:-


– contributions into the scheme receive tax relief

– the rent received by the pension scheme is not subject to income tax

– the property when sold has not capital gains tax liability

– in most circumstances there will be no Inheritance tax liability on death

– the ownership of the property prevents the pension being an asset that could be claimed in bankruptcy


If you are thinking of investing in a commercial property by way of a SIPP or a SSAS I would be happy to handle the legal part of the transaction for you at a fixed fee price. please feel free to call me on 01623 663244

Christie Limb






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imagesCAX34LB7Investing by SIPP and SSAS

 What are they?

A SIPP is a self invested personal pension and a SSAS is small self administered scheme.

Why are they of interest?

They provide for some a tax efficent way of investing.

Why look at investing by way of a SIPP or a SSAS

– growth is free from CGT

– tax relief at the individual or company’s highest rate

– rental income received by a pension scheme attracts no UK income tax

– on retirement 25% of the pension fund can be paid as a tax free lump sum

– on death before retirement the whole payment under the pension fund could be paid as a tax free lump sum i.e. no inheritance tax

The difference between a SIPP and a SSAS


small occupational pension scheme set up by the directors

– members are usually employees or directors of the employer

– each member has a a notional share of the SSAS funds

– more flexible on investment

– can lend to the company


SIPP is a personal pensions set up by an insurance company or specialist SIPP operator.

– open to anyone

– usually a minimum fund size

-There are usually higher running cost


Christie Limb

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Don’t worry this is not a blog about Engelbert Humperdink!, I just wanted to share some thoughts with you on the subject of equity release, as we have found in recent months that the number of client’s enquiring about equity release plans has increased quite significantly.

Equity release plans are a way for homeowners over the age of 55 to release some money on the basis that the loan is secured against their property and is only repayable upon sale of the property or in the event of death or leaving the property to go into permanent long term care.

equity release pic

The main type of equity release plan available is known as a lifetime mortgage. With a lifetime mortgage, you borrow a proportion of your home’s value. Interest is charged on the amount at a fixed rate which is compounded or ‘rolled up’ over the period of the loan, but nothing usually has to be paid back until you die or sell your home.   Lifetime mortgages allow you to retain full ownership of your property and offer a flexible way of releasing money in later life without the worry of meeting regular monthly repayments.  Most lifetime mortgages offer a no negative equity guarantee which means that the amount repayable under the plan will never be more than the amount the property is sold for.

Lifetime mortgages are not right for everybody.  The fact that a compounded interest rate is applied means that it is likely that by the time the loan is repayable the costs of doing so are three or four times higher than the original loan amount.  This will of course mean that the value of your estate could be substantially reduced which might not be your plan! Entering into a lifetime mortgage could also have implications on your eligibility to receive certain welfare benefits and could also affect your tax position.

Whilst it is possible to shop around and compare the different equity release plans available yourself, we would strongly advise you to consult an independent financial advisor to gather information on the various products available and to find the right plan to suit your needs.  Make sure that you enquire about all the fees that are involved with any products offered to you as you do not want to be caught off guard!

Once you have found the equity release plan that suits your needs and you are happy to proceed with it, you will be asked to provide the contact details of a solicitor to act on your behalf.  We would be happy to help and to provide you with a clear fixed fee quote for guiding you through the legal process culminating in the release of funds to you.  For further information feel free to contact our Mr Luke Rees on 01623 663246.

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I often get asked about VAT on commercial properties. Commercial properties are exempt from VAT however this exemption can be waived.

It is important for a tenant to check at the early stages of the lease negotiations as to whether or not VAT  is payable. If it is then VAT at the appropriate rate will be payable on top of the rent. If the tenant is registered for VAT this is not much of an issue it will just effect cash flow in that the tenant will have to pay the VAT out and then reclaim the VAT payment back. The problem is when the tenant is not VAT registered as they will pay VAT on the rent and will not be able to claim it back.

There is then the additional problem in that even if VAT is not payable when you initially tkae on the lease it could become payable during the term of the lease as the landlord can opt to charge VAT on the property at any time.

Is there anything the tenant can do?

Yes. In the initial negotiations if VAT is payable and the tenant is not VAT registered he can try and negotiate a lower rent

If the VAT  is not payable at the start of the lease and the tenant wants to ensure that this remains the same throughout the term of the lease, then the tenant can a negotiate that a clause be included in the lease to state that during the term the landlord will not opt to charge VAT.

Any landlord realistically will wish to avoid both of the options above this is why it is important for a tenant at the early stages of negotiations to instruct a solicitor so that the tenant is aware of all the options available to them and  to ensure that they negotiate the best rental terms.

If you are a tenant and are thinking of taking on a lease please feel free to call me on 01623 663244 and I would be happy to assist with any enquires.


Christie Limb

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One of the key issues to consider at the start of a business sale is whether the assets of the business, or all the shares in the company  will be sold. These two methods may have significant implications for each of the Seller and the Buyer and should be considered by both parties when structuring the transaction.

Asset sale or share sale?

If the business is run by a sole trader or a partnership then there will be no shares to buy. The assets, including contracts and goodwill of the business, will be sold  in an asset sale.  However, if the business is a limited company, then the Buyer can choose whether to buy the assets or the whole of the company itself.

Broadly speaking, a Buyer will normally prefer an asset sale, and Seller will normally prefer a share sale.  The following article will explain a few of the reasons why.

buying a business

 Asset sale

Under an asset sale, the Buyer acquires some or all of the assets owned by the Seller.  The Buyer will generally prefer to buy the assets  of a company, as this will enable them to cherry pick exactly which assets they are buying and identify precisely those liabilities they wish to take over, giving the Buyer a great degree of flexibility.  The Seller’s business name may or may not be included in the sale and the licences and contracts may or may not be transferred to the Buyer,depending on the terms agreed.  All other liabilities will be left with the Seller, meaning that the Buyer does not have to take over liabilities that they wish to avoid.  The Buyer therefore potentially takes on less risk.

One asset that cannot be cherry picked by the Buyer in an asset sale is the existing employees of the business.   All employees automatically transfer on their existing terms and become the responsibility of the Buyer who must consult with the employees prior to completion.

If an asset sale involves property or land then the Buyer will be faced with paying Stamp Duty Land Tax at a rate of anything up to 4% of the price attributed to that particular asset.  If the asset sale is deemed as a transfer of a going concern, then it is deemed to be outside the scope of VAT.  The Buyer may be able to claim Capital Allowances for the price paid for equipment and industrial buildings.

Share sale

Under a share sale, the Seller is the  individual shareholders of the company.  The Buyer acquires all the shares in the company and indirectly obtains ownership of all assets and all liabilities.

The Buyer steps into the shoes of the Seller as shareholder.  The contracts and assets remain in the company’s ownership. There is therefore no need for the assets of the company to be transferred and this means a share sale can often be completed without any third-party involvement making it far more discreet.  When a Seller sells shares in a company they achieve a complete break in the relationship between themselves as shareholders and the company.   Assuming the Seller has not given personal guarantees, they will not have liability for the debts of the business following completion as they will remain with the Company.  As the Buyer indirectly assumes all of the of the company liabilities(whether known or unknown),they are generally at greater risk in a share sale.

The Buyer in a share sale is not restricted with how they can deal with employees in the same way that they are under an asset sale.   They can potentially change terms of employment and take other measures if they are necessary

Tax wise in a share sale, a Buyer must pay stamp duty of ½ % of the price paid for the shares.  Share purchases are entirely exempt from VAT.  A Seller is likely to prefer a share sale as the tax implications are generally more favourable than an asset sale,as they may be entitled to a relief of 50% on the Capital Gains Tax payable on the sale of the shares.

Whether the transaction is structured as an asset sale or a share sale, it is essential to obtain independent legal, tax and accounting advice so that the parties understand the implications of the transaction.  For specialist legal advice, contact Luke Rees or a member of the Commercial Department at Fidler & Pepper on 01623 451111.







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Simply put, a Shareholders Agreement is a document that every company with more than one shareholder should have. It contains the rules by which the shareholders agree to operate the company and in general terms provides the basis of a legal agreement between them.  Shareholders Agreements ensure that the running of the company and the responsibilities of the shareholders are properly clarified so there is certainty as to what can or cannot be done and decisions are taken by consensus and discussion.  As a result, having a Shareholder’s Agreement in place is more likely to reduce the potential for conflict between shareholders and this will help the company to be run smoothly and profitably.

london image

So why have a Shareholder’s agreement?

A Shareholders Agreement works in conjunction with a company’s articles of association, but will give shareholders greater protection than can be provided by the articles alone, not least because companies are often set up quickly and cheaply just with standard articles that will not include much detail regarding protective provisions for shareholders or define the limits of their responsibilities..

Ordinarily a company is subject to control in accordance with the Companies Act that governs how a company should be run.  However, a Shareholders’ Agreement can contain any arrangement agreed between the shareholders and can vary what would otherwise be the legal position without it.

A Shareholders Agreement is a cheap way to minimise any potential for business disputes between shareholders by making it clear how certain decisions are made and also by providing a framework and procedures for dispute resolution. Common sense and tolerance may not be enough to end a dispute where a specific action is called for. A Shareholders Agreement will force an end to a dispute, by providing a structure within which the parties have to abide. In the event of a stalemate situation a Shareholders Agreement will provide a procedure to allow the parties to go their own ways.

A Shareholders Agreement  can make provision for what happens in the event that a shareholder’s personal circumstances change to safeguard the remaining shareholder’s financial interest in the company in the event that a fellow shareholder dies or wishes to leave/retire.   A common provision in a Shareholder’s Agreement is a right of pre-emption, or first refusal. This means that if a shareholder should die or wish to exit, their   is offered to the remaining shareholder’s who have a specified time period in which to make an offer for the shares.  It is only in the event that the remaining shareholders do not wish to exercise their right of first refusal that the departing shareholder’s shares may be offered and sold to a third party.  Needless to say, this is an extremely important provision as it ensures that the remaining shareholders do not have an unwelcome new partner forced upon them!

Shareholders Agreements can control minority shareholder by placing restrictions on them if they leave the company and compelling them to transfer their shares in certain circumstances such as when the majority wish to sell the company to a third party.   A Shareholders Agreement can also protect the rights of minority shareholders and the investment value of their share holding.  Without an agreement, majority shareholders may force issues that are not in the minority shareholders’ interests.  Once in place a Shareholders Agreement can only be amended with the agreement of all of the shareholders, whereas the company’s articles of association can be changed by a 75% majority meaning that a shareholders agreement provides better protection for minority shareholders.

If you require a Shareholders Agreement for your company, call Luke Rees a solicitor in our commercial team on 01623 451111 for a fixed fee quote.

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Most leaseholders of flats in England and Wales have a legal right to  purchase at market value a new lease at a peppercorn (i.e. nil) ground rent within deadlines laid down by law.  A leaseholder who has lived in their flat for two years and has a lease with a term of over 21 years remaining is entitled to negotiate a new 90-year lease extension on top of the existing unexpired term.

For a leaseholder, acquiring a lease extension is an important way to protect the value of your flat.   With any lease, the length of time left to run has a major impact on the value. If the lease has only a few years left then its value drops dramatically as any purchaser will not be willing to part with a lot of money in return for only a short period of ownership. Extending the lease increases the value.

lease extension pic

It is important if you are selling your lease to widen the market for the property. The problem with short leases is that prospective buyers will struggle to find a mortgage if the term is not long enough. Extending the lease increases the market for its purchase.

A lease extension can be used  to correct any defects or problems that the lease may have. If for example the flat is held under a lease that was created many years ago then it is possible for some of the clauses to be redundant or irrelevant. The new lease can be drafted in a modern manner and benefit both the leaseholder and landlord.

The law puts the leaseholder in the driving seat as the leaseholder can start off the statutory extension process by serving a notice on the landlord.  The notice must contain certain specified information, such as a proposed price for the lease extension.  This price must be reasonable and so it will be necessary for the leaseholder to obtain a valuation from a suitably qualified surveyor.  The statutory procedure sets out a formula for calculating the value of a lease extension.   The leaseholder is responsible for paying the landlord’s costs of the extension and may be required by the landlord to pay a deposit of 10% of the proposed premium.

The landlord has two months to issue a counter notice confirming whether they admit the leaseholder’s request for an extension and what terms the landlord wishes to negotiate (usually the price!).  A period of six months is set aside for the landlord and leaseholder to agree terms and within two months of these terms being agreed, the new lease extension must be entered into. Once the process has been started, the right to acquire the lease extension can be transferred by the seller to the buyer upon completion of the purchase of a flat.

The statutory procedure for lease extensions provides a clear and certain process for both leaseholder’s and landlords to follow.  However, the process is very strict with regards to the information that must be supplied and the time limits that must be followed and so consequently there are a number of potential traps and pitfalls along the way.  Whether you are a leaseholder seeking to extend your lease or a landlord faced with a notice of extension, we can help you.  Contact a member of our commercial team for further advice on 01623 451111.

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Lease, leasehold, Property, Uncategorized    No Comments


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Lease enfranchisement


What is it?


When you buy a leasehold property you own the leasehold title but a third party owns the freehold title. Lease enfranchisement allows the leaseholder owner to acquire the freehold.


Why would you want to acquire the freehold?


If you own the freehold it allows you to:-


1. grant lease extensions yourself;

2. control the management of the building  and

3. if the lease needs variation etc then this allows you the freedom to do so.


Can I apply? 


To qualify to apply for enfranchisement the following must be satisfied:-


1.there must be at least two flats in the building;

2. at least 2/3 of the flats, must be let to “qualifying tenants”


What is a qualifying tenant?


1. the lease must be for 21 years or more (certain other leases do qualify);

2. at least 50% of the flat must join in the application, if there are only twp flats both must participate;


What is the procedure?


There is a set procedure for the application starting with the tenant serving a notice with required information on the freeholder. I would suggest that a solicitor be involved at this stage to ensure that the procedure is followed.


What will the tenant have to pay?


1.Usually the tenant will have to pay certain fees of the freeholder and

2. the purchase price for the freehold the price depends on a number of factors such as the length of the leases and the value of the flats. If the lease term is over 80 years less value will need to be paid.


If you require any assistance with such an application Fidler and Pepper have a specialist team who handle such cases and we would be happy to provide you with a quote for the work. Please call Christie on 01623 448302 for further information

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A lease is a contract between the landlord and tenant. Like all contracts, it is negotiable. A tenant should understand the basic lease terms before entering into negotiations to take on a new lease.  As the tenant, you are likely to find yourself negotiating the lease with an agent, rather than the landlord himself. Whilst you might think that the agent is neutral, they are in fact paid to market the premises for the landlord and to negotiate the best deal for them, not for you.

The savvy operators will always speak to a solicitor early on in the process to ensure that negotiations are strategically considered.  Usually, after an agreement in principle has been made, the agent drafts a ‘heads of terms’ document (often referred to as the ‘HoTs’). This details the principal terms and is circulated to solicitors as the starting point for them to draft the legal documentation.

The following is a list of the main commercial terms that you will need to agree as part of the HoTs:

Duration of the lease

Leases of commercial premises nowadays seldom run for longer than 10 years.  Tenants should usually expect to have the right to end the lease early (a break clause) in leases of 6 years or longer.  A break clause gives you as a tenant the vital flexibility of being able to terminate the lease early.  It is also an easier way out of a lease than trying to sell it on or subletting.   Usually, when negotiating a break clause, the landlord will want to insist it is mutual i.e. the landlord can serve notice to break the lease as well as you.   You should try to resist this if at all possible as obviously you do not want the landlord threatening to break the lease if your business is doing well!

You may hear or see reference in the HoTs to the lease being ‘excluded from the protection of the Landlord and Tenant Act 1954 (the “Act”)’. The Act gives business tenants the right to renew a tenancy when it comes to an end. If the landlord refuses to allow for the lease to be automatically renewable you may want to consider a longer lease term.


To get an idea of what a fair rent is for the premises, you should find out an average rent for other similar properties in the area. Often there is more payable than just the basic rent – including, building insurance, utility costs and so on. You should also check if the landlord has opted to charge VAT on the rent as this will inflate the rental figure you actually pay in real terms.

Leases for a term longer than 5 years normally contain rent review clauses which allow the Landlord to initiate a review of the rent at set intervals.  Landlords normally stipulate that rent reviews should be upward only so do not expect your rent to go down!   It goes without saying that the longer the interval between rent reviews the better as your rent will remain stable.

It may be that you want to make changes to the premises to fit them out for your particular use.  In such circumstances you should ask the landlord for a rent free period in order to compensate you for the time and costs of  making  changes.  Rent  free periods  are common in the current market and will improve your cash flow.

Another issue you will need to consider when negotiating the lease term and rent is stamp duty land tax (SDLT). SDLT on leases involves a complex calculation and the amount payable (if any) will vary according to the length of the lease term and the amount of rent. One way of reducing SDLT liability is to take a shorter lease term.

Service charge

If the premises form part of a larger building, the landlord may also charge a service charge.  A service charge covers the costs of maintaining and repairing the shared areas of the larger building.  So that you can get an idea of your likely financial obligations under the service charge you should ask the landlord to estimate the average year’s service charge,how this is calculated for the premises and to confirm the service charge for each of the last three years.   If there is a service charge,  you should request that it is capped to avoid a very nasty shock when the landlord asks you for your share of the cost of something significant such as replacing the roof!


Being liable for repairs can be very onerous for a tenant. You do not want to find yourself responsible for extensive repairs way out of proportion to the length of time you will be renting the premises. You should, therefore, negotiate repairing obligations which are appropriate to the term of the lease and, significantly, the condition of the premises.  If the premises are in anything other than a perfect condition, you should insist that a survey called a schedule of condition is undertaken.   A schedule of condition is a record of the condition of the premises at the start of the Lease and it can be made  clear that you do not have to put the property into any better state of repair then it was at the start of the Lease as evidenced by the schedule.


A tenant usually likes to be able to deal with their rented premises in the most cost-effective way, even if this means subletting or selling (assigning) the lease – in legal terms, ‘alienating’ the property. Landlords, on the other hand, prefer to exercise fairly strict control over alienation, by seeking a guarantee that any assignee or sub-tenant will be able to pay the rent and perform the tenant’s obligations.


Another area landlords like to control is when structural or other alterations to the premises are to be carried out by the tenant. A normal clause in the lease would state that any such alterations will require the prior written consent of the landlord, but that consent should not be unreasonably withheld or delayed. To save time and costs in the future you should get all signage and initial alterations that you wish to make approved before signing the lease. If you wait until after the lease has been completed, you may be required to complete a formal licence and pay the landlord’s legal and surveyor’s fees.

Other terms

There are many other terms in a commercial lease.   It is far more difficult to renegotiate terms at a later stage than at the time when both landlord and tenant are keen to secure the deal. Make sure you obtain professional advice at the outset, in order to avoid committing yourself to a lease that could unduly restrict you and drain your finances.

One final piece of advice is that the agent may request that you pay the landlord’s legal costs  in connection with the lease.  It is not standard practice for the tenant to pay the landlord’s costs and so do not agree to this.  You may have your own legal costs to pay and it is only fair and reasonable that the landlord pays their own bill!!

For further advice or a quote, please contact  a member of the commercial team on 01623 451111



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