March 2020 - Vymans

25th March 2020

Rent Payments and Covid-19

We are getting numerous enquiries from both landlords and tenants in relation to requests for rental concessions during this Covid 19 pandemic.

Landlords are increasingly being faced with requests for rental payment holidays or other concessions.

Similarly, tenants may be having severe cash flow difficulties, particularly those in the hospitality and leisure sectors, and now all retailers (other than supermarkets and pharmacies) have to close.

It is also common knowledge that lenders are supposed to be giving their borrowers (i.e. landlords) a 3-month mortgage payment holiday.

In the circumstances, what to do? Here is a checklist of things you may wish to consider:

Evidence of Hardship: Some tenants may be seeking rental concessions as a matter of course. As a landlord, you may wish to see actual evidence of financial hardship before simply agreeing.

Mortgage payments: Bear in mind that although your mortgage payments may be deferred, ultimately, you will at some point have to pay them as well as any interest on them.

Form of rental concession: What form of rental concession are you willing to agree? There are various alternatives:

- Percentage reduction.
- Payment holiday.
- Deferral.
- Change to payment dates and periods (e.g. from quarterly in advance to monthly in advance).
- Combination of the above.

Formalities: Ideally, whether you are a landlord or a tenant, any change should be formally documented. If you are a tenant, you may wish to seek a variation to the terms of your lease or tenancy. On the other hand, if you are a landlord, you may prefer merely to provide a voluntary concession which can be withdrawn at any time. To avoid unanticipated rights or obligations arising, careful thought is required.

Guarantors: If the lease or tenancy obligations are guaranteed, it is probably wise that guarantors are also party to any change to avoid them consequently arguing that they are no longer bound.

Termination of concessions: Consider when and how the concessions may be terminated, e.g.:

(i) On notice
(ii) On any dealings with the lease
(iii) On any breach of the lease terms or the terms of any variation or concession

Parties to the concession: You may wish to consider whether other parties (e.g. successors in title or assignees) should be bound or have the benefit of the concession, or whether it should be personal to the current landlord and tenant only.

Time period: You may wish to agree that the concession will automatically come to an end at a certain time. The drawback of this is that if you continue to apply the concession beyond that time, it may amount to a continuing agreement which becomes binding.

Interest: If payment is deferred or delayed, consider whether interest should be payable and at what rate.

Rent Review: If a rent review is pending, consider what the effect of any concession will be on the rent review.

We are more than happy to advise you in connection with any of the issues raised above and in helping you to document any variations, concession arrangements or agreements. Please do not hesitate to contact us.

25th March 2020

Lay-offs and Covid-19 Job Retention Scheme

Many businesses are considering laying off staff and taking advantage of the Government Job Retention Scheme.

Job Retention Scheme

This applies to ‘furloughed workers’. Please click here for more details. A brief summary is below:

Employers will need to designate which of its employees will be furloughed workers.
The Government will fund 80% of wages up to a maximum of £2,500 per month.
The scheme is intended to run for 3 months but may be extended.
This applies to any employee who was on the payroll on 1 March 2020.
The Government expects to make grant payments by the end of April 2020, and they will be backdated to 1 March 2020.

Employment Law Issues

Employers do not have an automatic right to lay off staff. In most cases, any enforced lay off will amount to a repudiatory breach of contract on the part of the employer which would entitle the employee to resign and claim constructive dismissal, or, where no pay is provided, an unlawful deduction from wages.

Complications can arise where some but not all staff need to be laid off and it may be necessary to go through a selection process. Any selection should be reasonable and based on similar criteria to those used in redundancy. It is advisable to try to agree the criteria with employees or their representatives.

Collective Redundancy?

This may also amount to a redundancy situation.

If employees are laid off for longer than they need to be, they may be able to treat themselves as redundant and be eligible for redundancy payments.

Consultation

If it is a redundancy and 20 or more employees are proposed to be laid off during a 90-day period, there is a statutory consultation period.

There is an obligation to notify BEIS (the Secretary of State for Business, Energy and Industrial Strategy) in advance and to consult with employees individually and with elected representatives (or trade unions). If these consultation rules are not followed, the employer can be liable to a fine, plus a claim for protective awards from employees of up to 90 day’s gross pay. In addition, if the procedure that is followed is not fair, this could expose the employer to claims for unfair dismissal.

There is an exception in special circumstances where it is not reasonably practical to follow these procedures. We would have thought that the present Covid situation would amount to such ‘special circumstances’. Nevertheless, all employers are under an obligation, as far as possible, to make efforts to comply with the requirements.

Agreement with Employees

It is obviously preferable that in all cases, agreement is reached with the relevant employees and the agreement is confirmed in writing.

If you have any queries regarding any of the above, please do not hesitate to contact us.

24th March 2020

Wills, Covid-19 & Social Distancing

Whilst it is not something that most of us would like to think about, the Covid 19 situation has brought into sharp focus the need to think about succession planning and prepare a will and lasting powers of attorney.

The Sunday Times on 22 March 2020 reported that law firms have witnessed a soaring demand for will services. People are spending time at home, speaking to their families, and thinking about elderly relatives as well as young children.

Wills

By making a will:

you (rather than the Government) will decide who gets your assets,
you (rather than the Government) will decide who administers your estate,
you have an opportunity proactively to tax plan,
you can appoint guardians of your choice if you have young children,
you can provide for dependants if you have any, and
quite significantly in these times, make provision for charities of your choice.

Lasting Powers of Attorney (LPAs)

These allow attorneys you appoint to make decisions on your behalf if you become mentally incapacitated. There are two types: (1) health and well-being; and (2) property and financial.

Your Business

If you are running a business or are director of a company, you should also think about making sure you have plans in place if you are not there, so that the business can continue, hopefully after the Covid-19 situation settles down.

Digital Assets

Another important thing to think about is your digital assets and accounts. Think about your Facebook, LinkedIn, Spotify, Apple, photograph, email, and other electronic accounts. You should think about giving somebody authority to deal with these if you are not able to do so. Maybe you should keep your usernames and passwords with your will.

Social Distancing

People may be worried about meeting with us face-to-face in order to discuss and prepare such documents. In most cases, however, we will be able to do everything over the telephone and by email including, taking initial instructions, sending drafts by email, discussing the terms with you, making any necessary changes, and guiding you through the signing and execution process.

Please do not hesitate to contact us if you have any questions or concerns regarding any of the above. We are happy to help.

23rd March 2020

Covid Job Retention Scheme

We are getting many enquiries about the above Scheme.

This is a massive state intervention in business activity. Many businesses are going to be forced into hibernation or animated suspension. The scheme will enable businesses to retain their employees so that when this crisis is over, they can hopefully restart with minimal disruption. It offers business and employees an extremely valuable lifeline.

Furloughed Workers

The scheme applies to ‘furloughed workers’ only. ‘Furlough’ is a term which is typically used in the US and means putting employees on temporary leave of absence, where they do not work and do not receive pay, but are retained on a the books to be brought back when needed.

Key Benefits

The key benefits of the scheme are:

The Government will fund 80% of wages up to a maximum of £2,500 per month. It is up to the employer whether to make up the balance.

The scheme is intended to run for 3 months but may be extended.

Importantly, these are grants not loans.

This applies to any employee who was on the payroll on 1 March 2020.

The Government expects to make grant payments by the end of April 2020, and they will be backdated to 1 March 2020.

Employers will need to designate which of its employees will be furloughed workers.

A new HMRC online portal will be established through which details will then have to be submitted, together with details of each employee’s earnings.

The details are still a bit sketchy and more details of the scheme will emerge over the next few weeks.

Risks

Fraud. Tt is important that employees are genuinely ‘furloughed’. If an employee is continuing to work and is placed on the scheme, this, in our view, amounts to tax fraud. Employers therefore must be very careful in how they offer the scheme and how they implement it.

Employment Laws. Employers also must comply with the usual employment walls. Any change to anyone’s employment terms must be made in accordance with existing laws and employment contracts. In practice, this means placing someone on the scheme must be voluntary and by mutual agreement.

Discrimination. You must also select employees in a fair way and must not discriminate against any employees e.g. based on age, disability or pregnancy.

We do expect all laws to be rigorously enforced if not now than later.

If you need any further guidance, please do not hesitate to contact us.

16th March 2020

Covid-19 – Vyman Solicitors Social Distancing Policy

Taking into account the Government’s guidance in relation to the Covid 19 situation, we have adopted a social distancing policy applicable to our staff and our dealings with our clients, contacts and third parties.

We will be continuing to provide legal services as before, but the method of delivery may be adjusted as set out below.

We are encouraging certain members of staff to work remotely.

We are encouraging alternative methods of “meeting”, for example, using telephone, conference facilities, or video conferencing facilities. We have established appropriate arrangements in order to effect this.

Where meetings in person are being held, we request all participants to withdraw if, in accordance with Government guidance, they have any Covid 19 symptoms (coughing, difficulty breathing or fever) or have been in contact with persons who have displayed such symptoms within the last 14 days.

Where meetings are being held, we would request all participants to maintain a healthy distance and avoid physical contact.

We of course remind everyone of the need for being vigilant in relation to guidelines about hand washing and hygiene.

We thank you for your understanding and cooperation in relation to what we hope will be short term measure. In the meantime, we wish you all the very best of health.