Commercial Tenants - Factors To Consider During The COVID-19 Outbreak

With the outbreak of COVID-19 causing mass disruption to businesses across all industries commercial tenants could soon find themselves experiencing cash flow problems.

The March quarter day (25th) is looming and many commercial tenants will be concerned to have to find 3 months’ rent to pay to their Landlord.

In most instances it would be hoped that an amicable agreement could be made between landlord and tenant to ensure business continuity, such as a rent holiday or making smaller more frequent payments. However, what are the implications of not paying?

In this article Mark Hodgson, Partner in the Real Estate team at Wilkes identifies some of the possible ramifications that could arise as a result of non-payment of rent of which commercial tenants should take note.

There are a number of remedies available to commercial Landlord when a Tenant does not pay the rent on its due date, these include the following:

Forfeiture

Forfeiture is the Landlord’s right to terminate the lease where a tenant either fails to pay rent or is in breach of covenant or condition of the lease. The landlord’s right and date for forfeiture is based upon the clauses specified within the Lease, but the right usually arises where rent is overdue for between 14 and 21 days.

There are two options with regards to forfeiture for non-payment of rent. A landlord can either:

  1. Change the locks, commonly using a certificated bailiff to do so; or
  2. Forfeit through court possession proceedings, which can be coupled with a claim for arrears.

However, if after the right to forfeit arises the landlord does something which treats the lease as continuing, the right to forfeit the lease on the basis of those particular arrears will be irrevocably lost. Even if the Landlord formally demands rent, they will waive the right to forfeit.

The tenant does have the option of applying to the Court for relief from forfeiture. In very basic terms if the tenant purges the breach and pays the arrears and any landlord’s reasonable costs the Court may exercise its discretion to reinstate the lease. Tenants have six months to make the application or lose the right to do so.

Sue for arrears

The Landlord may issue a demand for payment, coupled with a threat that County Court Proceedings will be issued on expiry of the deadline set in the demand in default of payment.

Although an effective tool, unless court proceedings are absolutely necessary they are often rejected in favour of other methods of recovery because they can be expensive, and it can take months to receive a hearing date, if there are any grounds to dispute the demand.

Winding Up

The Landlord could proceed straight to winding up (liquidation) of the tenant on the basis that they are insolvent, as evidenced by the fact that they cannot pay debts as they fall due. Normally, a statutory demand will be served, but not necessarily. A statutory demand is a formal demand for payment of the debt, which an insolvency court would rely on in order to make a winding up order if the debt is not paid.

This is an expensive route to go down for the Landlord, especially if the tenant is insolvent. However, if the tenant is not insolvent (and has other assets to protect), winding up is a serious threat.

Commercial Rent Arrears Recovery (“CRAR”)

This procedure allows landlords of a commercial premises to instruct an enforcement agent (for example a certificated bailiff), after giving 7 days’ notice, to take control of a tenant’s goods and sell them in order to recover the value of the rent arrears.

If a Landlord proceeds down this route, it would waive their right to forfeit for the current arrears, although a new right would accrue if rent due on the next rent payment date is unpaid. It really depends on whether the landlord’s primary aim is to get the arrears paid, and continue with the tenancy, or to seek possession.

Pursuing a guarantor

If a person or company has agreed to act as a guarantor for the tenant’s covenants under the lease, it is open to the landlord to consider pursuing them if the tenant is in arrears of rent.

Depending on the provisions in the lease and the guarantee given by the guarantor, the usual way to enforce the guarantor’s obligations would be to issue court proceedings.  A landlord may also, in certain circumstances, be able to claim against a former tenant of the premises.

To conclude, how the landlord proceeds is dependent on the solvency of the tenant and whether the landlord wants to prioritise retaining possession. In the current climate they may appreciate the risk of an empty property if a tenant is evicted.

Mark recommends that the first course of action is to start a dialogue with the landlord to achieve a sensible and reasonable compromise.

The Real Estate team and the Property Dispute team at The Wilkes Partnership are on hand to help if you have questions relating to anything in this article. Please call 0121 233 4333 if you need any advice or assistance.

The Wilkes Partnership Solicitors, Law Firm of the Year

The Wilkes Partnership, has been announced in the shortlist as one of the region’s leading legal experts for Law Firm of the Year (Regional) at the Birmingham Law Society’s Legal Awards 2020.

In its 19th year, the Legal Awards are Birmingham Law Society’s recognition of the best talent in the region and The Wilkes Partnership is one of only four firms to be shortlisted for Law Firm of the Year (Regional).  The judges were very impressed with the calibre of nominees and the quality of work being done in Birmingham.

Wilkes will now have to wait, alongside all nominees across 12 categories, until 27 March 2020 to find out whether it has been crowned Law Firm of the Year.

Ellie Holland, managing partner at The Wilkes Partnership, said: “We are proud to have been shortlisted for this award.“

“Last year was certainly one of progress for Wilkes, bolstering both experience and expertise across teams with many clients expressing just how much they value our consultation and legal expertise as we grow with them. We feel that being shortlisted for this award is public recognition of that value we bring to clients and we want to build on the fantastic reputation we have built.”

You can find out more about the Birmingham Law Society here.

Fact or Fiction? The Reality Of Making A Will

Settlement Agreements can be a useful tool in resolving workplace disputes and for bringing employment relationships to an end in a mutually agreed way.  It is a legally binding contract between employer and employee which settles claims that the employee may have against their employer.

Sarah Begley Solicitor in the Employment Team at The Wilkes Partnership considers how Settlement Agreements work and when to use them, key terms and common negotiation points.

What is a Settlement Agreement?

 

Settlement Agreements, formerly known as Compromise Agreements, are legally binding contracts which can be used to end an employment relationship on agreed terms. They can also be used where the employment is ongoing, but both parties want to resolve a dispute that has arisen between them.   These Agreements can be offered at any stage of an employment relationship and can be proposed by either an employer or an employee, although in most cases it will usually be the employer.

There are specific conditions that must be met in order for a Settlement Agreement to be valid, they are:-

 

  1. The Agreement must be in writing
  2. The Agreement must relate to a particular complaint or proceedings
  3. The employee must have received advice from a relevant independent advisor, such as a Lawyer or a certified and authorised member of a Trade Union
  4. The independent advisor must have a current contract of insurance or professional indemnity covering the risk of a claim by the employee in respect of loss arising from the advice
  5. The Agreement must identify the advisor
  6. The Agreement must state that the applicable statutory conditions regulating the Settlement Agreement have been met

Settlement Agreements usually include some form of payment to the employee and often include a reference.  All Settlement Agreements are entered into on a voluntary basis.

Once a valid Settlement Agreement has been signed, the employee will be unable to make an Employment Tribunal claim about any type of claim, which is listed in the Agreement save for limited claims in respect of pension, personal injury and claims to enforce the Agreement itself.

Reaching a Settlement Agreement

 

A reasonable amount of time should be given to the employee to consider the proposed conditions of the Agreement.

The ACAS Code of Practice stipulates a minimum of 10 calendar days unless agreed otherwise between the parties.

Settlement Agreements are voluntary and parties do not have to agree to them or enter into any discussion about them. There can be a process of negotiation during which both sides make proposals and counter proposals until an agreement is reached or both parties decide no agreement can be reached.

If a Settlement Agreement is not reached and depending on the nature of the dispute or issue, resolution may be pursued through a performance management, disciplinary or grievance process, or mediation whichever is best suited. It is important that employers follow a fair process. If the employee is dismissed, failure to do so may give grounds for a claim of unfair dismissal.

Settlement Agreement Meeting

 

Although there is no statutory right for the employee to be accompanied at any meeting to discuss the Agreement, as a matter of good practice, it is sensible for employers to allow an employee to be accompanied when meetings are held as this can often help progress meaningful discussions.  The Settlement Agreement will specify a date when the employment relationship will come to an end along with details of payment and the timing of that payment.  Payment should be made as soon as practicable after the Agreement has been reached.

Other non-financial terms can include an agreed reference, a confidentiality clause and a clause preventing the employee from making any derogatory comments about the employer.

Ending The Employment Relationship

 

When the Settlement Agreement includes an agreement to end the employment relationship, then employment can end with the required notice, or the timing can be agreed as part of the Settlement Agreement.

Details of payment and the timing should be included in the Agreement; any payments should be made as soon as practicable after the Agreement has been reached.

Sarah Begley comments:  “Employers are reminded that Settlement Agreements provide a very useful tool to resolve work place disputes without the need to undertake legal action. However, Settlement Agreements are technical legal documents which contain important terms regarding employment rights post termination of employment.  Independent legal advice is a legal requirement for individuals but for employers, early professional advice is recommended.”

To discuss anything arising from this update, please contact Sarah Begley on 0121 733 4312 or via email at sbegley@wilkes.co.uk You can also contact any other member of the Employment Team on 0121 233 4333 or email us at employment@wilkes.co.uk.

The Wilkes Corporate team, led by Gareth O’Hara have advised long-standing Automotive client Johnsons Cars on its recent acquisition of four Volkswagen dealerships.

This recent acquisition will see Johnsons take over showrooms in Warrington, Liverpool, Stafford and Stoke which will increase Johnsons VW portfolio to nine dealerships across the UK taking them up to 46 dealerships in total.

Johnsons already has Volkswagen outlets at Birmingham and was selected by the brand in 2017 to run its first pilot ‘store’ at the Bullring shopping centre, a deal which was also advised on by the Wilkes Corporate Team.

Gareth O’Hara, Managing Partner and Head of the Corporate Team at Wilkes said: “As ever it’s great to be working with the team at Johnsons Cars on their most recent acquisition. It’s exciting to be involved with the business and we are delighted to be a part of their continued growth. At Wilkes we are all about long-standing client relationships and we look forward to working with Johnsons again on future acquisitions”.

Mike Berwick, Operations Director at Johnsons Cars commented: “We greatly appreciate the relationship we have with Gareth and the rest of the team at Wilkes. Their understanding of our business, and the retail car business generally, makes what can often be a time consuming and challenging process more straight forward. Wilkes are very used to our approach and method of doing deals.”

This is the latest in a growing line of M&A work for The Wilkes Partnership, following the completion of deals across a range of sectors including Automotive, IT Software, FMCG, Events and Health & Social Care.

Gareth was supported on the transaction by Mark Hodgson (Real Estate), Mike Linford (Corporate) & Lisa Moore (Employment).

For help and advice relating to your business get in touch with Gareth O’Hara on 0121 710 5904 or via email at gohara@wilkes.co.uk.

Jack Ackrill - British Wills and Probate Awards The Wilkes Partnership Solicitors, Birmingham & Solihull

Jack Ackrill, Solicitor in the Contentious Probate Department at The Wilkes Partnership has been short listed for the title of Young Practitioner of the Year at the prestigious and nationally contested British Wills and Probate Awards 2019.

This is the next stage of Jack’s journey since joining The Wilkes Partnership as a trainee and becoming a newly qualified solicitor with the firm at the end of last year. He will now wait until 17 October 2019 for the winner to be announced at the Belfry Hotel and Resort, Sutton Coldfield.

Jack Ackrill, Solicitor in the Contentious Probate Department at Wilkes, says: “Getting to the last three at the National Wills and Probate Awards to be named the best in the UK is fantastic.

“I’ve been working hard with the team at Wilkes and it has taken a lot of hard work, drive and support from the people around me to get me here.

“Getting to the final three is a great achievement, especially given the level of quality that would have undoubtedly been put forward by other firms. It has been a steep learning curve, but with the support I’ve had since joining as a trainee I really feel that I’ve excelled here.”

The Young Practitioner of the Year Award recognises an under 30 who has shown themselves to be an exceptional individual with a high level of involvement and development within the sector or area of practice. 

Kevin Lynch, Partner at Wilkes, says: “This award was created to search for exceptional individuals and I have no doubt that Jack fits into that category. I have had the pleasure of seeing him grow as a person and legal practitioner within our Will Disputes & Contentious Probate team.”

“This nomination is a reflection of his hard work, professionalism and dedication to achieving the highest standards in the legal practice. He has been a vital part of the team during a time of great growth for the Contentious Probate team at Wilkes working on high profile cases that require talent and technical expertise. We’ll all be there to cheer Jack on while he waits to hear whether he has won this prestigious award.”

Wilkes has set itself an ambitious target of raising £10,000 in the next 12 months for Acorns Children’s Hospice, our chosen charity for the year.

Ann-Marie Aston, Partner and Head of CSR at Wilkes, said: “It is fantastic to have the opportunity to work with Acorns Children’s Hospice as our charity of the year. Myself and the rest of the CSR team are busy putting the finishing touches to a busy schedule of fund-raising activities over the next 12 months!”

Acorns Children’s Hospice provides specialist palliative care to babies, children and young people with life limiting and life threatening conditions across Birmingham and the Midlands, as well as support for their families.

It costs £27,000 per day to provide Acorns care and services and the charity relies heavily on local businesses and the community to fund the majority of this amount. In the past year, the charity has cared for more than 780 children and supported over 1,220 families, including those who are bereaved. Funds raised by Wilkes will go towards helping the hospice staff with this vital care.

Vicki Rowles, Head of Partnership Fundraising at Acorns Children’s Hospice, said: “We are delighted that The Wilkes Partnership has chosen Acorns as its charity of the year. We simply wouldn’t be here as a charity without the support of local businesses like The Wilkes Partnership and the community.”

“Its support will help us continue our work to caring for children and families. We look forward to supporting Wilkes with its fundraising efforts over the next year and developing what I’m sure will be a great partnership.”

To find out more about how you can support Acorns, visit: www.acorns.org.uk/support.

The Wilkes Partnership and Coley & Tilley, have announced a merger creating a 185 person strong firm with a turnover of £12 million a year.

This expansion will significantly enhance our offering for corporate clients and expand our expertise in a range of areas including, commercial property, dispute resolution, corporate & commercial, employment, family, residential conveyancing and probate law. The personal injury team will stay under the Coley & Tilley brand as a recognised market leader in the Midlands.

Nigel Wood, Senior Partner at The Wilkes Partnership, says: “This merger continues the long term growth plans that we have for the firm and by joining with Coley & Tilley we have added considerable legal experience in a range of practice areas. We want to provide the best quality legal services to clients and through this merger we are doing that.

We set out with an ambition to continue growing and delivering expertise that is recognised both regionally and nationally. This merger is a huge step in the right direction of realising those ambitions.”

In 2013, The Wilkes Partnership merged with Solihull-based Williamson & Soden, and continued its growth with several promotions in 2018, as well as expanding its senior team by appointing a HR & Compliance Director, Head of Contentious Probate and two new Managing Partners.

James Leo, Managing Partner at Coley & Tilley, added:  “Through discussions with Nigel and other board members at Wilkes we quickly realised that bringing the two firms together would both complement and enhance our offering to clients. We have similar ambitions to deliver quality work that is industry leading and we have taken care that our clients will see a seamless transition to the new firm with their original points of contact.

“This is the start of a new chapter for both Wilkes and Coley & Tilley and one that provides fresh opportunities to expand and grow together.”

For more information please contact rreid@wilkes.co.uk

Kevin Lynch, Partner in our Contentious Probate department advises that it is vital to consider your options where the validity of a will is doubted or the person intending to take out a grant of probate in a deceased person’s estate is unsuitable.

It may be appropriate to file a Caveat to prevent the grant of probate from being extracted so that you can consider instructing solicitors to investigate the matter further. The problem facing most people is knowing whether it is appropriate to file a Caveat.

A caveat is used to prevent a grant of probate in a deceased person’s estate being extracted. Naturally, this will prevent the estate administration and stop the appointed executor from administering the estate. A caveat is a particularly useful tool when investigating the circumstances surrounding the preparation and execution of a Will if you think that it may be invalid. Preventing the grant may also be useful if you believe that the appointed executor should not be dealing with the estate for any reason i.e. they are unsuitable to take out the grant and administer the estate because they have had their ‘hands in the till’.

Filing a Caveat is relatively simple and can be done so with the Probate Registry along with the appropriate fee (currently £20). Once filed and sealed by the Probate Registry, the Caveat will remain in place for six months. It can then be extended for a further six months (provided that this is done at least a month before its expiry) for as long as necessary. If the Caveat is not renewed, it automatically expires.

This may sound simple enough. However, Caveats can become very difficult to deal with if you do not have proper grounds to enter it, or it is opposed. In order to lodge a Caveat, the Caveator must have a contrary interest in the estate i.e. you are a child of the deceased who has been disinherited. A Caveat is not a tool to be used in the event that you are a third party without an interest (and never has) in the estate.

If the Caveator receives a Warning from a party opposing the Caveat, the matter can become very complicated. It is at this stage that the Caveator must consider entering an Appearance (to solidify the Caveat and lock it into place) or allow it to fall away. Entering an Appearance can have serious costs consequences in the event that litigation ensues and the Caveat has been unduly or incorrectly entered.

Even if you believe that there are reasonable grounds for entering a Caveat, it may be the case that your concerns are misplaced or you have not understood the rules in relation to entering a Caveat correctly. It is always prudent to seek independent legal advice when considering potential challenges to a Will or if you have been notified of a Caveat against an estate to which you are an executor or personal representative. Dealing with these issues is not easy and, if done incorrectly, can lead to serious costs consequences.

The Contentious Probate Team at The Wilkes Partnership advises those disputing the validity of a Will and the suitably of the intended executors/administrators.  If you wish to discuss any aspect of these issues, please get in touch with Kevin Lynch on 0121 233 4333 or via email on klynch@wilkes.co.uk.

We are delighted to have launched our new website, fresh for 2019, that will allow visitors and clients to interact with Wilkes in a smoother and more efficient manner across all devices.

Our new website has been designed to offer the ultimate user-friendly experience with improved navigation and functionality whilst allowing visitors to find out about the full range of services here at Wilkes, and the skilled teams that deliver them.

The site’s new and improved news section will provide visitors with an up-to-date, reliable source of legal news for both businesses and individuals.

We will also be maintaining our German website and are in the process of working towards a site wide translation tool that should be available from the Spring.

We would love to hear your thoughts on our new website. Please get in touch on Twitter @WilkesLaw or email us on marketing@wilkes.co.uk with your comments and feedback.

The weather has been unusually mild so far this winter but as is typical of the UK, it could turn for the worse at any time. The Met Office currently predicts that as we head into the New Year, there is the chance of high pressure becoming established close to the UK, with an increasing chance of some snow showers.

Over the last few winters, spates of bad weather caused major disruption to businesses across the UK; the estimated cost to the UK economy is £230 million per day of disruption.

Pam Sidhu, Head of Employment at Wilkes, advises that employers should have a Bad Weather Policy as part of the usual suite of employment policies in the company handbook, so that employees clearly understand what is expected of them in such circumstances and what the ramifications are if they are unable to attend work due to extreme adverse weather.

Traditionally, there appears to be a culture within much of the UK whereby employees consider such weather events to be an opportunity to take a ‘duvet day’ for which they will receive full salary. However, the fact of the matter is that employees are not automatically entitled to pay if they are unable to get into work due to bad weather.

Pam explains that a sensibly drafted Bad Weather Policy would go some way to dispelling  any myth that employees can take paid time off and provide advance clarification to the workforce as to the employer’s expectations in these circumstances.

The fundamental principle of any such policy would be that in the first instance employees are required to make reasonable efforts to attend work. This may include attending a different office that is more easily accessible.

Employers should also be as flexible as possible in their approach and where possible should consider allowing employees to work remotely from home. This  is becoming more and more feasible nowadays, with the increased use of mobile devices and accessibility of work emails from home computers and laptops. It may also be reasonable to allow employees to take annual leave at short notice or even unpaid leave.

Where an employer feels that the policy is being abused they could introduce disciplinary sanctions to counteract this, where for example it is clear that the employee has failed to make any effort to attend work. The employer will need to be careful to ensure that they are consistent in their approach in this respect.

They will also need to consider the personal circumstances of each employee. Some may live in a very accessible area close to their workplace, whereas others may live some distance away or in more rural locations.

Pam explains that ultimately an employer has a duty of care towards the health and safety of its employees and if through threats of disciplinary sanctions, employees are unreasonably forced to make potentially hazardous journeys then this may expose the employer to risk.

Additionally, it should be noted that employees have the right to reasonable unpaid time off to care for various dependants in emergency situations and not be subjected to any detriment in employment as a result. As such, an employee with young children whose school has closed due to the conditions is likely to be entitled to time off to care for them.

Strictly speaking, the right to time off is unpaid but not all employers will take this approach.  If the employer pays, it is important that it adopts a consistent approach to all staff including those without children.

Pam advises that whilst there will never be a perfect solution to the disruption caused by bad weather to the workplace, good planning and communication by the employer will go some way to alleviating the situation when it does arise.

For advice on any employment related matter please contact Pam Sidhu on 0121 710 5815 or  psidhu@wilkes.co.uk.  You can also reach any member of the Employment Team on 0121 233 4333.