Spear’s Property Advisers Index 2022: Record number of Forsters’ lawyers listed

• 18 March 2022
• News

The Spear’s Property Advisers Index 2022 has recognised a record 11 Forsters’ lawyers from across our top-ranked Residential Property and Rural Land and Business teams:

Property Lawyers

• Lucy Barber, Top Flight
• Helen Marsh, Top Flight
• Robert Barham, Recommended
• Charles Mieville, Recommended
• Anna Jassani, Recommended
• Adam Whitfield-Jones, Rising Star
• Gethen Sasanow, Rising Star

Landed Estates Lawyers

• Henry Cecil, Top Recommended
• Andrew Lane, Top Recommended
• Penny Elliott, Top Recommended
• Idina Glyn, Rising Star

We are delighted that, for the second year in a row, Forsters has the greatest number of lawyers ranked in the index.

The Index features the industry leaders advising private clients on prime property.

The full index can be found here.

Moving House – To Do List

• 20 January 2022
• News

Moving house can be an inherently stressful process. The best way to ensure a smooth transaction is to be prepared with all papers and possible issues in advance, so these do not stall the process due to late discovery, and enabling your solicitor and agent to ensure all matters are properly addressed in advance. We have set out below a short checklist, which is not exhaustive, but should assist in initial preparations so that you can hit the ground running once a buyer is found.

Five top tips for international buyers of UK Residential Property

• 1 August 2021
• News

Buying a property in the UK can be an overwhelming process, made more stressful if the purchaser is based overseas. In order to ensure the process runs as smoothly as possible it is crucial to understand the additional complexities of a cross-border purchase and the particular nuances of buying property in the UK.

We share our top five tips when purchasing a UK property that all international buyers should be aware of.

Choose your lawyer carefully and early in the process

• On-boarding international clients can take longer, and proof/source of funds regulations are very tight. Estate agents often need similar information, so be organised with both address/identity proofs and statements of funds.
• At Forsters, our dedicated team carry out all checks remotely and identity checks are carried out via a mobile phone link, ensuring the process is as efficient as possible. One issue that can delay the transaction is if the funds are in a third party/ company account. 1 In these circumstances further checks would be required to understand the identity of that company/third party. This process is simplified if funds for the purchase are in the purchaser’s own personal account at the point of engagement.
• Estate agents often work regularly with particular solicitors or law firms – instructing one of these may help encourage a seller to accept your offer, as agents will want to know that the transaction will progress swiftly and diligently. We work with many of the well-recognised estate agents both in and out of London, which has helped our clients’ offers be successful in a bidding process.
• Many lawyers do not deal regularly with leasehold properties (very common in Central London), or new build developments. These are part of our core work. We also have a team who are dedicated to rural estates, with expertise in agricultural matters too.

Consider the wider tax and estate planning implications

Stamp duty land tax (SDLT) is a large initial cost. If you are non-UK resident and/or if your UK purchase is not a replacement of your main residence (which you must have sold previously) or it is not your only property anywhere in the world, you could be charged considerably more SDLT. Your property may also be subject to taxes on sale, and inheritance tax on death. Our private wealth team can assist with the correct tax structuring and inheritance planning.

Consider a buying agent

This is a relatively under used concept in the UK – note that the estate agent acts for the seller, and so will not necessarily be acting in your best interests. Buying agents have invaluable market knowledge, understand every type of property offering and often have access to off market properties, helpful at a time when good stock is low. They understand your specific demands and needs to ensure that you are only viewing suitable properties. We work closely with selling and buying agents and can suggest a list of contacts.

Have a survey

A seller is not obliged to disclose any physical defects in the property. We work closely with a selection of surveyors who will be able to inspect the property and check there are no material issues – we would then raise these as points for the seller to address before you complete, or you may be able to reduce your offer price by reference to them.

Familiarise yourself with the different ownership types

There are two types of property in England & Wales: freehold and leasehold.

• Freehold properties are usually houses. The owner of a freehold property owns the property, the land it sits on and usually the space above it. While no ground rent or service charge is payable for a freehold property, the maintenance of the building is up to the owner.
• Leasehold properties are very often flats. A leasehold property is held under a lease which is for a finite period of time and which details the terms of ownership.
• While the owner of the leasehold owns the flat for the duration of the lease term, the landlord (freeholder) owns the land and building. You cannot have a freehold flat, but you can have a lease of a flat which has a share in the freehold of the building (owned collectively with all/ some of the other tenants in the building). Flats will be subject to a service charge, which may include contributions to a sinking fund, and they may also be subject to an annual ground rent charge. The legislation around ground rents is currently under review and it is crucial to get legal advice on this in order to understand the nature of the property you are buying.
• Ground rent and service charge are usually collected by the landlord in order to pay for the maintenance of the building and land.
• Leases also generally restrict an owner’s ability to carry out works (for example opening up walls, moving bathrooms and kitchens, fitting air conditioning or subletting the property). In some cases, the landlord does not have to provide consent. As part of the legal process we would provide you with a report which would include an explanation as to what you can or cannot do.
• You may have a statutory right to extend your lease or to club together with other tenants to acquire the freehold of the building.
• You may be required to provide personal, professional and/or financial references when buying a leasehold flat, and sometimes a rent deposit (which might typically equate to 1 or 2 years’ service charge). It is important to be organised with these references so that they do not hold up the buying process.

The process of buying a property is predominantly the same irrespective of the property type, but the conveyancing process for leasehold transactions can carry an extra layer of complexity. Your conveyancer must review (amongst other things) the length of the lease (80 + years is preferable), any unfair ground rent or service charge provisions and any supplemental documents required to register you as the legal owner of the flat with the landlord.

Our Residential Property and Private Client teams regularly work together for our international clients purchasing property in the UK, advising them on both the transaction process and the long-term wealth planning requirements of owning UK property.

For further details on the tax considerations for international buyers please do read our recent article for Bloomberg here.

Please do get in touch with any member of the team to find out more about how we can help.

Spear’s Property Advisers Index 2021 – Full House for Forsters

• 25 March 2021
• News

Listing only the key advisors in the UHNW real estate sector, the Spear’s Property Advisers Index 2021 features the industry leaders advising high net worth individuals on prime and super-prime residential property.

We are delighted to announce that all of our Partners in the Residential Property team have been recognised as ‘the best property lawyers‘ in the index this year, with the following rankings:

Top Recommended

• Lucy Barber, Head of Residential Property
• Chris Myers, Residential Property Partner
• Helen Marsh, Residential Property Partner

Recommended

• Charles Miéville, Residential Property Partner
• Robert Barham, Residential Property Partner

In addition to our Partners, Adam Whitfield Jones, Senior Associate in Residential Property, has been recognised as a Rising Star.

With a total of five lawyers, Forsters is the firm with the greatest number of advisers ranked in the index. The recognition is a testament to the unparalleled reputation and strength of the team and their expertise.

The full index can be found here.

As the largest specialist team dedicated to Residential Property in London, our lawyers can provide an unrivalled level of service to clients. To learn more about our lawyers, and the services they can provide for you, please visit our luxury property hub.

How to protect the “bank of mum and dad” when your child is cohabitating

• 19 March 2021
• News

Q&A: I have recently provided my daughter with funds to buy a flat in her own name and she wants her boyfriend to move in. Could he have a legal or financial claim on the property if they split?

Unmarried, cohabiting couples are the fastest-growing type of family, with an increase of over 25% in a decade.

As house prices continue to rise faster than average incomes, many young people are turning to the “bank of mum and dad” to help with their first property purchase.

Whilst such scenarios are increasingly common, they give rise to a number of legal issues.

Funding a purchase for a family member

It is important to think carefully about the help you are agreeing to provide, and to be clear with your daughter about the terms on which you are providing it.

Will you be lending the funds, or making a gift? There can be tax advantages to making gifts during your lifetime but a gift is irrevocable, and you should only make a gift if you can truly spare the money. You also need to bear in mind that, once you have made a gift, you have very little control over what the recipient does with it.

A loan does not have the same tax advantages of a gift, but it can provider greater flexibility. It is important to be clear about the terms of any loan – what it is to be used for, when it is to be repaid, and whether interest will be charged.

You also need to bear in mind that a court may look behind the loan documents when deciding whether there is a true expectation that a loan will be repaid. There are many cases where courts have decided that a loan between family members is “soft” and that the lender will not in reality insist on repayment.

A properly drafted loan agreement, clearly setting out the terms of the loan, is essential. If the loan is to assist with a property purchase, you should consider registering a charge against the property, in the same way a bank or building society would, so that you are notified if the property is sold or another loan is secured against it.

Finally, you need to think about who you are making the loan or gift to. If your daughter and her boyfriend were purchasing the flat in joint names, for instance, you should be very clear that you are making the loan or gift to your daughter, not to the two of them jointly, and you should insist that is reflected in the ownership of the property.

Cohabitation agreement

Ordinarily, your daughter’s boyfriend cannot acquire an interest in her property simply by living in it. However, in reality, it is all too easy for situations to arise whereby he does acquire an interest.

For instance, if the boyfriend received an inheritance, which he used to fund an extension to the property, he could potentially claim that a “resulting trust” had arisen, whereby he acquired an interest to the value of the contribution he made, and any increase in value attributable to that contribution.

Or consider a situation where your daughter and her boyfriend decide to start a family. The boyfriend is in a less well paid job and offers to give it up and become a stay at home father, but he expresses concern that doing so would leave him economically vulnerable if they split up. To reassure him, your daughter promises that “what is hers is his” and that he will always be entitled to half the sale proceeds if they split up. In such a case, there is a real risk the court would decide that a “proprietary estoppel” had arisen, and that your daughter should be held to her promise, because the boyfriend had relied on it to his detriment.

Both those scenarios, and many others, can be avoided if your daughter enters into a cohabitation agreement with her boyfriend. Such an agreement can record the exact terms on which they own and occupy the property and can deal with issues such as:

• If the boyfriend is paying rent or a contribution towards outgoings
• Whether they expect he will acquire a right to occupy the property, or an interest in it
• Who will pay the bills
• What will happen if your daughter asks him to move out
• Whether furniture will be jointly owned or earmarked as owned by one or other of them.

Marriage

Finally, if your daughter and her boyfriend decide to marry in the future, then the situation changes dramatically. Spouses can make financial claims against one another on divorce, irrespective of how property is owned, and the divorce court can order transfer or sale of property as it sees fit to ensure the parties needs, and those of any children, are met. Where one party has acquired assets before the marriage, or expects to inherit assets during the marriage, they are strongly advised to insist on a prenuptial agreement.

Simon Blain is a Partner in the Family team and Helen Marsh is a Partner in the Residential Property team.

The Life Cycle of Family Wealth

From growing a business to starting a family or handing over control of that business to the next generation, every individual has their own goals to aspire to. Our Private Wealth lawyers advise our clients throughout this family life cycle, providing the legal advice required for specific transactions such as purchasing a home or selling a business, whilst also advising on the long-term opportunities for succession and estate planning.