Summer Budget 2015 – Landlords Reactions

The telegraph needs to put out as many 'real stories' as possible that is what gets noticed.

We have hundreds of homes in a small area housing the most vulnerable people. If we had to fall due to clause 24 there would be a housing crisis in our Borough as all these people would need to be housed we have our own personal manager within the council looking after only us !!!! I really think that would make people sit up and notice really do

Just received this from Mark Smith, after I queried the proposal that converting to a ltd company via the beneficial interest was a breach of my terms and conditions and sent him the terms and conditions to review, he sent it to my accountant, broker and myself

Dear all,

This strategy is being promoted by p118, and has had approval from a leading tax QC.
The t&c you have sent in respect of BM do not prevent this taking place. You are not creating any additional security or charges, nor parting with the property. Nothing in the BICT scheme affects the security that the lender has over the property, and nothing could prevent the lender taking possession and enforcing its power of sale in the event of default. The scheme itself is not a breach of any term or condition. The trust will not appear on the Land registry, and the lender should not be informed of it as a) it does not concern them b) if they are not told of it their interest is protected as they are not 'on notice'.
Can you please send a legible copy of TMW t&c so that I can check that it is the same one we have already seen?
Please arrange a telephone call with me on Monday if you are still concerned.

Yours

Mark W.Smith Barrister
Picture
Cotswold Barristers
4 Royal Crescent
Cheltenham
Gloucestershire
GL50 3DA
01242 639454
Chambers' Website

Reply to the comment left by "NW Landlord" at "20/03/2016 - 11:36":

Olivia from the Telegraph is on holiday this week so Richard Dyson, is taking the lead on property stories this week, his email is
richard.dyson@telegraph.co.uk
I'd advise copying him in too.

Reply to the comment left by "NW Landlord" at "20/03/2016 - 10:33":

What email address did you send it to?

Olivia.rudgard@telegraph.co.uk
Money@telegraph.co.uk

> Mark Smith

I am no lawyer and have no basis on which to question the legal opinion supporting the scheme, or your implementation of it.

However, I have a hard time getting my head round the fact that the scheme is so benign that the lender doesn't even need to know and, even if it did know, that it is within the T&Cs anyway, yet so significant that it triggers a liability for SDLT

To use the example that you cite in your post here, BM. If BM disagrees with the legal opinion on which the scheme is built and does, in fact, call in a mortgage or take other action against the borrower, what happens? Do you / your Chambers / the QC providing the legal opinion / Pump Chambers / a PII policy cover the costs arising for the scheme participant?

Hi Jon,

I would question this also. I can't speak for BM mortgage terms, but, the mortgage works terms make it very clear that you cannot transfer beneficial interest...
5. Additional security

5.1 As a continuing security for payment to us of the debt you charge to us with full title guarantee by way of mortgage the benefit of any interest you have to and in the occupation leases and the rents together with the benefit of any guarantees, suretyships, indemnities, rent deposits or other security (whether proprietary or by way of personal covenant and whether from a tenant or a third party) from time to time or in respect of any of the occupation leases providing that nothing in this condition shall constitute us as mortgagee in possession.

7. Your covenants

7.1 You will at all times during the continuance of the security created by the mortgage:

(f) not occupy the property yourself nor grant any leases or licences or accept a surrender or agree to accept a surrender of any leases or licences of the property nor agree any variations to or any rent reviews pursuant to any such leases or licences except that you can grant an assured shorthold tenancy or tenancies or other tenancy in accordance with condition 31;

(h) unless permitted by condition 7.1(f ) not part with possession or occupation of the property or share such possession or occupation;

(j) not without our previous written consent convey assign, transfer, mortgage or otherwise dispose of the property nor agree to do any of the foregoing acts and you will apply to HM Chief Land Registrar in the mortgage deed for entry of the following restriction in the Proprietorship Register of the property; “No Disposition of the registered estate by the proprietor of the registered estate is to be registered without a written consent signed by the proprietor for the time being of the charge dated [ ] in favour of The Mortgage Works (UK) plc referred to in the Charges Register”;

11. Acceleration

11.1 On any of the following events the security constituted by the mortgage shall become immediately enforceable without further notice to you. We shall cease to be under any further commitment to you to make any advance and the debt shall immediately become due and payable without the necessity on our part of making any demand for payment and the provisions of the mortgage regarding enforcement of the security shall apply:

(b ) you are in breach of any of your other material covenants or obligations under the mortgage either when that obligation is due or within a reasonable period of us requesting you to do so;

(d) an encumbrancer takes possession or a receiver or similar officer is appointed in respect of the whole or any part of your assets and undertaking or those of any guarantor;

(h) any statement, representation or warranty made by or on behalf of you or any guarantor proves to be incorrect or inaccurate;

(q) any change is made in the legal or beneficial ownership of all or any of your or any guarantor’s shares or there is any change of control of you or any guarantor without our previous written approval.

17. Power of attorney

17.1. You hereby irrevocably appoint the following:

(a) us:

17.3 The power of attorney granted by this clause are regards us, our delegates and any such receiver (as you hereby acknowledge) are granted irrevocably and for value as part of the security constituted by the mortgage to secure proprietary interests of and the performance of obligations owed to the respective donees within the meaning of the Powers of Attorney Act 1971.

23. No waivers, remedies cumulative

23.1 No failure to exercise, nor any delay in exercising on our part any right or remedy under the mortgage or any other document will operate as a waiver of such right or remedy nor will any single or partial exercise of any right or remedy preclude any other or further exercise of any other right or remedy. The rights and remedies provided in the mortgage are cumulative and not exclusive of any rights or remedies provided by law. In the event that any matter falls within the scope of more than one of the provisions of the mortgage nothing shall prevent us from enforcing against you the more (or most) stringent provision.

Reply to the comment left by "mark andrews" at "20/03/2016 - 20:27":

Where in these clauses does it say the beneficial interest cannot be transfered? Sorry if I'm being thick but I can't see anything

Reply to the comment left by "Nicholas Dickinson" at "20/03/2016 - 20:35":

(q) any change is made in the legal or beneficial ownership of all or any of your or any guarantor’s shares or there is any change of control of you or any guarantor without our previous written approval.

I think they will assist u know they want to lend and keep the book it's in their interest to work with landords or they are going to have sacks full of keys