Managing Your Property Obligations
https://www.businessconnectionslive.com/ Managing Your Property Obligations
On tonight’s edition of Business Connections Live, we talk to Peter Levaggi, Partner at Charles Russell Speechlys. Peter is a Solicitor Advocate with Higher Rights of Audience. He has a thriving commercial property litigation practice dealing with every aspect of contentious landlord and tenant work.
Many SMEs (and larger companies) have been affected by the use of interest rate hedging products by banks as part of their lending apparatus over the last five years. Commercial occupiers (retailers, professional businesses, and businesses leasing premises of all kinds) have all been affected and faced very difficult times with their banks during this period.
Managing Your Property Obligations
The financial downturn created an unprecedented rise in the number of receiver appointed by banks over mortgaged commercial property. Sometimes these receiverships are referred to as LPA Receivers (as they are nominally regulated under the Law of Property Act 1925 – although most standard charge documents vary and/or exclude the provisions of the Act, giving the bank and their receivers extremely wider powers).
Meanwhile a substantial number of the same commercial occupiers (alleged to be in default with their banks) have been determined to be victims of a serious bank mis-selling scandal. The majority of small and medium size companies were sold interest rate hedging products (IRHPs) by their banks.
The misselling of these IRHPs was subject to the Financial Conduct Authority (“FCA”) (the Financial Services Authority (“FSA”) as it then was) review. The FSA found serious failings in the sale of many products to small businesses.
IRHPs are products that were sold to protect against interest rate movements. A variety of products were sold to purportedly protect customers including caps to limit interest rate rises, swaps to enable a customer to fix their interest rate, collars to place a cap on interest rate rises to within a range (i.e. a ceiling and a floor) and the complicated structured collars. These overly complex arrangements often caused businesses serious losses. Where an IRHP was mis-sold, the banks are having to compensate these businesses to a cost of billions.
6 key features
- How best to deal with Bank finance in relation to property
- The necessity of taking proper advice in relation to alleged bank default
- Managing liabilities when vacating a commercial premises
- Seeking and obtaining redress in the case of these mis sold hedge products
6 key benefits
- When negotiating an exit from a commercial premises, a business can save substantial amounts of money if proper legal advice is taken. Liabilities owed to banks and landlords depend greatly on the terms of the subject mortgage or lease.
- Landlords are bringing an increasing number of dilapidations claims at the end of the lease. However such claims should be resisted particularly when it is apparent that the landlord intends to redevelop the property.
- Lease liabilities are often a question of detail — in relation to the terms and conditions of the lease. Landlord sometimes purport to be able to recover costs and expenses in circumstances where the lease does not allow.
- Negotiating comprehensively before the lease is executed is essential to avoid misunderstandings and unreasonable liabilities arising.
Peter has a strong reputation in the property litigation field and has a substantial national client base. He also specialises in insolvency issues arising in the context of property. He is the Head of the Property Insolvency Group and the Property Litigation Group. He is named as leader in his field in Legal 500 and Chambers who say he “heads up the practice and is extremely well reputed for his crisp delivery and deep knowledge.” Peter regularly writes articles and books on property and insolvency issues (he was the author of the Law Society’s Guide to Enforcement Law published in 2008 – second edition published in December 2014 and Jordon’s Property Insolvency published in 2009 – second edition published to be published February 2015). He chairs the Lexis Commercial property series of webinars, and is a regular speaker for the Property bar Association, the Law Society and RICS.
Business Connections Live Programme 67
This is the Business Connections Live Business Channel on YouTube Business Connections Live Programme 67. Broadcast 14th January 2015