The Lawyer Africa Elite 2014 features an in-depth look at 46 leading independent firms’ strategies in 15 key sub-Saharan jurisdictions, as well as the views of in-house counsel from some of Africa’s largest companies... Read more
This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
Advising overseas buyers or tenants on UK property deals is fraught with danger for the uninitiated
Amazon as your tenant? Would you say no? Amazon is taking 12 floors at 60 Holborn Viaduct, the company’s second major office acquisition in central London in a year.
We’re seeing a particularly strong trend of foreign money coming in to the top end of the UK property market – either high-net-worth families and funds investing in iconic London buildings or big international brands developing their UK/European footprints.
Recent examples include the purchase of the Lloyd’s building by Chinese insurance company Ping and the acquisition of the London Stock Exchange HQ by Canadian fund Ontario Municipal.
Good news for property lawyers in a depressed market? Perhaps, but also a dangerous temptation for those tempted to dabble in deals they are unused to handling. The issues can be very different from the typical fare.
One thing that can be assumed is that Amazon and companies like it will have taken care to arrange their acquisitions in tax-efficient structures – something that is equally important for residential buyers from abroad. The chancellor aims to cut corporation tax to 20 per cent by 2015, making the UK an attractive location. But at the same time he is attacking perceived stamp duty land tax (SDLT) avoidance by buyers acquiring high-value residential property through companies, raising SDLT rates to 15 per cent on purchases over £2m and adding an annual charge. Property tax advice has never been more important.
What about landlords and sellers? In dealing with a UK resident, certain assumptions about capacity and how legal documents are executed can be made. This is not so for buyers and tenants from abroad. How do landlords or vendors satisfy themselves that the lease/contract is within the powers of a foreign company to enter into and that signature formalities have been adhered to? Opinion letters may help, but for many jurisdictions, particularly the US, it is unusual for lawyers to give them.
There are possible problems when your tenant or buyer is not resident in this country. Hopefully, the rent and service charge will be paid, but what happens if there is non-payment? How does a landlord enforce? Big and reputable companies or individuals may be less of a problem, but they are not the only acquirers of property. Will substantial deposits or onshore guarantees be required? If you do not have them you can get judgment in a UK court, but will that be recognised in the home country of the tenant? And even if it is, how do you enforce it there? Do you have to go to the foreign courts and get judgment?
The area is fraught with problems. Any lawyers eyeing up the market, thinking the work is only a small step up from advising on similar deals in the UK could be scarily unprepared for some of the traps. Anyone unused to advising overseas clients should tread with care. And clients should take care to select lawyers who know what they are doing.