To describe 2020 as a rollercoaster would be an understatement. In the course of a year we have faced two national lockdowns, a series of local lockdowns and continue to face restrictions on our daily lives. Health and wellbeing is paramount, but naturally the impact on businesses has been unprecedented and never has it been more important to ensure that your business is up to date and compliant with the current regulations and best practice. Doing so not only can avoid claims and unwarranted disputes, but it can protect and maintain the value of your business for the future.

Key things that you should consider are:-

Employees

‘Furlough’ is the buzz word of 2020 when it comes to employment, with many taking advantage of the government backed scheme to retain staff and maintain livelihoods. Ensuring that your scheme is compliant and that communication with staff is clear can avoid claims and disputes.

Premises

With a nationwide-shift to working from home where you can, it is only natural to consider the use of your premises and if it is still required. Many are finding that their employees are equally as efficient from home and prefer the flexibility. If you find yourself in this situation, you should review your Lease to know where you stand on effecting any changes necessary – possibly saving costs in the long-run.

Contracts

With supply chains disrupted and consumers heavily reliant on quick deliveries, making sure that you have robust contracts in place to deal with the impact of lockdown and the changes in how we do business is fundamental.

Governance

Whether you operate a company or are in a partnership, you should ensure that the documents governing the relationship between your business owners are up to date and properly address the ‘what if’ scenarios that, unfortunately, more recently many have been forced to face. How you deal with the incapacity or, in the worst case, death of a business owner can have a substantial impact on its continuity and ability for the business to survive. If you haven’t reviewed your Articles of Association, Shareholders Agreement or Partnership Agreement recently, undertaking this exercise is key to ensure that not only are the relevant concerns covered off, but that the parties clearly understand the documents in order to avoid a dispute in the future.

 

These are just a few key areas that can have a big impact on your business that you need to consider; this is both in terms of your commercial operations but also in avoiding claims and disputes. But looking at the bigger picture, fundamentally ensuring that your operations are up to date and compliant underpins the value of your business and any potential sale.

As you look to 2021 and the future for your business, you may be considering your own exit strategy. Many businesses do continue to adapt and thrive despite the pandemic and you may find yourself negotiating a sale of your business. Whether this is in 3 months or 3 years’ time, your buyer is going to scrutinise your operations from a commercial, accounting and legal perspective. The question is, will you come up to par? Your offer price would be subject to due diligence and if your buyer unearths legal issues in the course of negotiations, you may find your purchase price reduced or that you become exposed through onerous indemnities to get the deal over the line. To avoid this, you need to ensure that the decisions that you make today ultimately are in your businesses’ best commercial interests, and therefore can still stand to benefit you tomorrow.

The sales process can be daunting, but if you plan your exit and prepare you and your business for the sales process you can address issues in advance and put yourself in the best position necessary and maximise on your sale. Therefore by scrutinising your operations now and ensuring that you are adapting to the pandemic in a compliant manner you are protecting not only your business, but also your own interests in the future.

For information on all our Corporate services, contact Holly Threlfall and our Business Services team on 01604 828282 / 01908 660966 or email BusinessServices@franklins-sols.co.uk.

For just a moment, you might have been forgiven for forgetting that COVID-19 existed. After the initial pandemonium of the first wave, the daily government updates and the long (albeit sunny) months spent indoors in isolation, we, as a nation, achieved what seemed unachievable, that all important R rate went down. We were allowed to socialise with our friends and extended family again, bars and restaurants were opening and we were even being encouraged to ‘Eat Out To Help Out’. Freedom at last! Or so it seemed.

Over the past few weeks infections have been on the rise again, with local lockdowns imposed and the R rate accelerating close to the levels it was at prior to the first lockdown. With the prospect of a second lockdown now on everyone’s mind, it is important to consider whether this will have a positive or detrimental impact on families.

There is no doubt that most parents breathed a heavy sigh of relief when the Government announced that schools were re-opening. Many parents found themselves taking on a new, unexpected ‘career’ as a home-school teacher, that is if they were not setting up their children’s virtual classroom first thing in the morning. Undoubtedly, COVID-19 will have had a damaging effect on children’s learning and mental health, although many are too young to understand the true consequences of a global pandemic. In respect of their learning, millions of children are likely to have lost out on 6 months or more of education, with the majority of children doing very little formal learning each day, especially those from low income families. The true impact of this however is yet to be seen.

The impact of COVID-19 on the family dynamic has also been an interesting one. Whilst some families have found that it has strengthened their relationships as they have been able to spend quality time together, others have been faced with financial hardship. It has also become apparent that lockdown has led to a rise in domestic abuse cases with men and women feeling trapped at home unable to escape their abuser. This is of course an unacceptable price to pay and more needs to be done to ensure that those experiencing domestic abuse are provided with the tools that they need, including access to legal advice. At Franklins we believe that no one should suffer in silence. With a sensitive but firm approach, you can rely on our family solicitors for support, reinforcement, advice and legal action that will put an end to the suffering you are experiencing in your home.

On the subject of family dynamics, it has also been suggested that Covid-19 has led to a spike in divorce enquiries. Although, there is no ‘perfect time’ to get divorced, spending an increased amount of time with your spouse is likely to have fuelled martial problems (where problems previously existed), especially if finances are also strained. Divorce is life changing for all parties involved but through tactical negotiation, on-going support and practical advice, you can rely on our family solicitors to get you on the route to resolution as soon as possible. Divorce is never easy or enjoyable, but with a team of specialists on your side you can rest assured that it will not last any longer than it has to.

If you need advice and assistance, please contact our Family Team on 01604 828282 / 01908 660966 or email Family@franklins-sols.co.uk.

On the 23 March at 8.30pm the nation watched as Boris Johnson announced a full scale lock down, setting out essential travel and social distancing.  How we function as a society has changed and the impact this has had on businesses, schools, health and welfare is far reaching.

The Bank of England have announced they will be putting in place a package of measures to assist businesses and keep people in jobs to help prevent COVID-19 from causing long term economic damage.  Interest rates have been cut to 0.1% which means cheaper loans to business and households and a further £200 billion is to be injected into the economy to help with public spending and continued investment.

Mortgage Lenders are also playing their part, Mortgage Payment holidays through government assistance and for those who qualify will be eligible for a three month payment holiday, this applies to both residential and buy-to-let mortgages.  To find out if you qualify for this you must first speak with your lender, it may also be worth checking if there will be a negative impact on your credit rating.    

However tread carefully; Mortgage Brokers are advising that if you can afford to pay your mortgage without a payment holiday then you should do so, the payment holiday is not free money,  the banks will add up the amount you didn’t pay to your total mortgage and when the three months are up your repayments will go up but with interest rates so low at the moment some are saying this makes little difference.   The general opinion is only take this route if you have little to no other option and get advice from your lender first.

More positive news from lenders is extensions on mortgage offers, you may have seen in the media that some lenders are extending the mortgages offers for clients moving home by a further three  months, it is important to note though that this is for offers on matters where contracts have already exchanged, this allows further dates to be negotiated where moving is not possible during the lock down.  If you have not exchanged and you are concerned that your mortgage offer is due to expire you will need to speak with your lender about extending your offer.   In all circumstances where you are extending your offer the lender may ask for further proof of funds and will be discretionary based on personal circumstances.

The main question I  still get is how will this affect my ability to move and what impact will this have on the value of my property.  The Government have produced more guidelines on house moves during the lockdown, these can be found in the link below, in essence the government are saying you can move if the property you are selling and or buying is empty, limiting the amount of journeys and making it easier to obey the social distancing rules.  If however you are in a chain whilst the government are not saying you cannot move they are strongly suggesting that this is done through a risk managed approach which may include long stop dates and the addition of contract clauses.   The Law Society are supporting house movers but have made it clear that once exchanged the conditions of sale are still enforceable if you do not complete on the legal date agreement.  What does this mean?   If you have exchanged with a fixed legal date and are unable to complete on that date action can be taken against you under the contract, this could result in you forfeiting your deposit.

As a firm we are doing our best to help you navigate through these government guidelines, we are assessing each exchange on a cases by case basis with a risk managed approach.  For further advice and guidance about your matter please speak with your Conveyancer.

In terms of the future impact on the housing market as yet we do not know what effect if any this will have, at this stage there is no firm evidence that this will have an impact on house prices.

Stay safe and keep washing those hands.

We are continuing to monitor the situation together with government and law society guidance. For more detailed advice on your matter please speak with your Conveyancer by calling 01908 660966 / 01604 828282. 

The United Kingdom and the rest of the World continues to deal with the COVID-19 pandemic, with different countries using various techniques to not only take control but keep their economies as stable as possible. Whilst the UK Government has passed emergency legislation on a number of measures including the Business Interruption Loan Scheme, many businesses are either struggling to access this through their lender or have their reservations about using it.

One of the main issues for companies is maintaining their cash flow whilst the economy is virtually remaining on hold for the foreseeable future with no certain timeframe for things getting back to normality. If you or your company has cash tied up in its assets such as property, then there are a number of ways that you can release this cash to help get you through this intense and uncertain time.

Selling property

Whilst most of the residential conveyancing market is on hold due to the issues of moving families during the lockdown period and lenders appearing to withdraw most of their higher percentage mortgages, many investment companies will still be looking to increase their portfolio with more buy-to-let properties. These companies commonly have interest only mortgages which require a much greater percentage of the purchase price to be deposited by the company before the mortgage offer is granted. There is still a market available for these types of purchasers.

Alternatively, if you have enough equity in your property and the buyer does not have enough disposable cash to be a cash buyer, you could sell the property at the market value and take the percentage of cash available from the buyer with the remainder being protected by way of a legal charge over the property for a negotiated period. This would then give the buyer time to seek a mortgage or bridging loan whilst allowing the sale to proceed and improve your cash flow at the same time.

Re-financing or additional security

Whilst many institutional lenders are restricting their availability of products, a number of finance companies are still offering mortgages or bridging loans. Whilst these are likely to be more short term and have higher interest rates, they may allow you to release the cash tied up in your property allowing you to get through this period of economic uncertainty. You may then be able to access a better product and remortgage once the economy has settled. If you have enough equity in the property, a finance company may be willing to take a second legal charge over the property subject to your primary lender giving consent to the same.

Sale of freehold with leaseback

If you own the freehold of a commercial property then you can potentially release any cash available from the equity in the property by selling the freehold reversion to an investor. There are still a number of investment companies with monies readily available such as a pension investment schemes. The freehold can then be sold with a simultaneous lease back of the premises to your company. This allows the company to receive the monies from the sale of the freehold yet still have the occupational benefit of the property. Terms of the leaseback would need to be negotiated with the buyer and further advice should be taken on this to ensure that you are adequately protected.

These options will vary depending on your circumstances and so will the implications of the same. You should take advice from your Accountant or Financial Advisor before proceeding to ensure that you do not have any unwanted tax consequences and that it benefits your business as a whole.

If you need any advice or assistance in relation to these transactions then Franklins are here to help. Please contact Reece Chapman, Solicitor in our Bespoke and Commercial Property team on 01908 660966 / 01604 828282 or by email at reece.chapman@franklins-sols.co.uk.

The Coronavirus pandemic has caused the Government to order the mandatory closure of all schools and nurseries across the United Kingdom, but where does that leave those parents whose children attend independent schools and nurseries? This is a concern that has been raised by many parents who are unsure as to whether they are entitled to a refund in respect of those fees that they have already paid for the remainder of the school year.

Undertaking a review of the terms of any parent contract that you may have entered into with the school and/or nursery in question when your child first joined, is key to understanding the contractual obligations and liabilities imposed upon you and whether you will be entitled to claim a refund for all, or some, of the school fees that have been paid for the following term. Some independent schools and nurseries may not have envisaged a closure of this nature and whilst some are offering a reduction in fees in light of the un-planned closures, this is not the case across the board.

If you have taken out a school fees insurance policy that may provide you with some protection, however careful consideration of the policy wording and terms is required in order to assess whether you will be entitled to claim. In any event, you should firstly make contact with the school and/or nursery to establish how they are proposing to deal with the current crisis.

Understanding your legal position in light of the Coronavirus pandemic is crucial to determining your right to a refund.

If you require any legal assistance with regards to understanding the terms of a parent contract or insurance policy, or if you are in dispute with a school and/or nursery at present and require our assistance to draft a suitable letter on your behalf, then please do not hesitate to contact Christopher Buck, Associate Partner in the Commercial Services Department on 01908 660966 / 01604 828282 or email christopher.buck@franklins-sols.co.uk.

Many employers have now taken advantage of the Coronavirus Job Retention Scheme, placing employees on furlough leave to allow them to be eligible to recover a grant of up to £2,500.00 gross per month (or 80% of the employee’s wages, whichever is lower).

The guidance on the scheme has been amended twice since it was first announced, giving additional clarity to what was a hastily put together emergency scheme. Our employment solicitor, Ben Stanton, has created two videos to advise on the terms of the scheme. Click on dates below and you’ll be redirected to the respective videos:

As these videos were created as soon as any information was released, some of the information has since been clarified by the Government’s updated guidance of Saturday 4th April, although the terms of the scheme are still as outlined in the video.

Disappointingly, the Government has still failed to clarify whether an employee can take annual leave during a period of furlough leave. However, in its stead, ACAS has released its own guidance to confirm that:

“If an employee is ‘furloughed’ (temporarily sent home because there’s no work), they can still request and take their holiday in the usual way. This includes taking bank holidays.”

This confirms that if an employee wishes to take annual leave during furlough leave (or if an employer wants them to take annual leave), the employee can take their annual leave and be paid in accordance with their contractual entitlement, whilst remaining on furlough leave.

As an alternative, the Government announced The Working Time (Coronavirus) (Amendment) Regulations 2020, a piece of emergency legislation which permits an employee to carry over 4 weeks’ untaken leave where it was not reasonably practicable to take it in the leave year “as a result of the effects of the coronavirus (including on the worker, the employer or the wider economy or society)”. Holiday entitlement can now be staggered over the next two years, rather than employees having to take their holiday entitlement when they return to work.

If you would like assistance in placing your employees on furlough leave, or if you are an employee who has been placed on furlough leave and would like to discuss your rights, please contact Ben Stanton on 01908 660966 / 01604 828282 or by emailing ben.stanton@franklins-sols.co.uk.

The Government and businesses alike have raised concerns over lenders’ willingness to grant loans via the Government’s Business Interruption Loan Scheme (the “Scheme”).

Speaking at Downing Street yesterday evening, the Business Secretary, Alok Sharma, expressed his concern that lenders are continuing to offer their business loans and products on their standard commercial terms in the first instance, with interest rates in some cases being charged as high as 30%. If lenders can offer financial support to their business customers whilst utilising their own products and services and without the need to rely upon the Scheme, it appears they are continuing to do so.

One of the current terms of the Scheme states that it is at the discretion of a lender as to whether the Scheme may be used for unsecured lending facilities that are granted for £250,000 or under. For any facilities granted in excess of £250,000, lenders must establish a clear lack of security prior to offering businesses access to the Scheme. Furthermore, it would appear that lenders are continuing to make access to the Scheme contingent upon directors utilising their own property and assets as a form of security in return for obtaining an emergency bailout, which may even include entering into personal guarantees! This is clearly not what the Government had intended when offering the Scheme, as the intention behind the Scheme is to relieve the pressure that is being placed on businesses, not for this to be increased by asking directors to personally guarantee the debt.

Changes to the Scheme are imminent and it is clear that the Scheme has not been implemented as smoothly as the Government may have hoped. The Government has expressed that it intends to iron out these issues and to make the terms of the Scheme clearer in order to make access the Scheme as simple as possible.

If you need any help and assistance in relation to loans or personal guarantees, Franklins are here to help. Please do not hesitate to contact Holly Threlfall, Associate Partner in our Business Services team on 01604 828282 / 01908 660966 or email holly.threlfall@franklins-sols.co.uk.

Many law firms around the UK, including ourselves, have seen an increase in the number of enquiries relating to preparing or updating a Will, mainly from elderly or vulnerable individuals.

In light of current circumstances, key workers, those who are working on the frontline of the pandemic, have also been advised to put their affairs in order. As such, Franklins are currently offering a 50% discount to all NHS staff in Northamptonshire and Buckinghamshire who wish to prepare their Will. 

It is important to remember that a Will not only ensures that your wishes as to who will benefit from your estate when you pass away are clear but also deals with other important matters such as who will care for any minor children that you may have, can specifically gift sentimental items to specific individuals ensuring that certain assets are kept in the family or, with careful planning, can also protect vulnerable beneficiaries. 

There is also a common misconception that if someone were to pass away, everything will pass to their surviving spouse. This is simply not the case. If you pass away without a Will, the intestacy rules confirm the first £270,000 will pass to the surviving spouse, together with all personal possessions. The remainder of your estate, if you have children, will then be divided so that 50% will pass to the surviving spouse and 50% will pass to equally between the children. This could have unintended consequences and could leave the survivor in a very vulnerable position, especially for example if there are children from previous relationships.

Another issue to also remember, is that cohabitees will not inherit under the intestacy rules. This may lead to a cohabitee being left in a vulnerable position whereby they may have to sell their property for example to release the equity to the beneficiaries of your estate. This may have a knock on effect of the cohabitee having to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975 which will in itself incur unnecessary costs and heartache for those left to deal with matters, and which could all have been avoided with the preparation of a Will.

We cannot stress enough how important planning for the future is and here at Franklins we are dedicated to assist where we can. If you would like to obtain advice or guidance regarding the preparation of your Will, please contact our Private Client team on privateclient@franklins-sols.co.uk or call our Northampton office on 01604 828282 / Milton Keynes 01908 660966.