If you’re buying a property with someone else, you will need to decide which type of joint ownership is right for you. When you own a property jointly, you can either own it as joint tenants or as tenants in common.

Which option will be best for you will depend on your circumstances. The different options give you the chance to protect your interests and ensure that your share of your property will be used in the way that you wish.

 

Joint tenants

If you choose to own the property as joint tenants, then you both own the whole property together. Neither of you will own a specific share. This means that when you sell, you are each entitled to half of the proceeds. Should one of you die, the other automatically owns the whole property.

Ownership as a joint tenant means that you cannot leave your share of the property to someone else in your Will. Problems may arise with this type of ownership in later life. For example, you can’t leave your share of your home to your children.

While the other owner may intend to leave the whole property to your children when the time comes, there is no guarantee that this will happen. They might remarry, with the property going to their new spouse. They could also lose the value of the property in an unsound investment or be required to use it to pay care home fees.

Tenants in common

When property is owned as tenants in common, each party owns a specified share outright. This could be 50%, but it can also be any other division that you agree upon. For example, if one party paid the deposit from their own funds then you could agree that their share will be 75%.

On the sale of the property, the net sale proceeds will be divided according to the agreed split, which is generally set out in a Deed of Trust or Declaration of Trust at the time the property is bought.

If you own a property as tenants in common, you can leave your share in your Will to your choice of beneficiary.

How to choose between joint tenants and tenants in common

If you are happy for your share of the property to ultimately pass to your co-owner, then a joint tenancy might be the right choice.

However, if you are making unequal contributions towards the purchase price, a tenancy in common could protect your interest. It also gives you the opportunity to ensure that your share of the property is passed on to your loved ones after you die.

You can leave it in your Will, but also give your co-owner a life interest in your share, meaning they will be able to stay in the home for as long as they wish. Once they no longer need the property and it is sold, your interest would be passed on in accordance with the terms of your Will.

It is always advisable to have a Will in place to let your loved ones know how you wish your estate to be shared after your death. However, if you will be owning a property as tenants in common, it is particularly important to make a Will.

Our experienced property and Wills advocates can discuss your situation with you and advise you on the best method of property ownership. We can answer any questions you may have and ensure that the right documentation is in place to protect your assets for future generations.

 

Contact our Isle of Man conveyancing team

If you are thinking of buying a property on the Isle of Man and you would like one of our experienced Isle of Man conveyancing advocates to represent you, we will be happy to hear from you. To speak to one of our expert Isle of Man property advocates, ring us on 01624 665522 or email us: hello@quinnlegal.im.

 

About Kathryn

Kathryn is the Head of Property at Quinn Legal

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For those entering into a lease for commercial premises, paying turnover rent may be an option. Turnover rent is calculated, wholly or in part, based on the turnover of the business that is leasing the property.

It is commonly used by retailers and can be useful for start-up businesses who are unable to afford full commercial rent.

 

How does turnover rent work?

The details of a turnover rent agreement will be negotiated in each individual case. It is advisable to work with a commercial property expert to ensure that your interests are properly represented and that the lease is in your best interests.

The agreement will often require the tenant to pay a base rent. Where this is the case, a cap can also usually be agreed upon so that even if turnover exceeds a set limit, there will not be any further increase in the rent. Alternatively, the whole rent can be based on turnover.

The actual rent paid each month or each quarter can be a fixed amount, with an annual reconciliation where any extra rent due under the turnover agreement will be settled.

This type of commercial lease can give tenants some flexibility during difficult market conditions and help prevent them from defaulting on a lease. This can be advantageous to a landlord as well, who might find it hard to find a new tenant.

 

Negotiating turnover rent

A lease including turnover rent can be complex and there are several key points to negotiate. These include how the rent will be calculated, whether the rent will be capped and how the tenant’s financial information will be verified.

The landlord may want to include online sales in the figures, while the tenant will want to exclude these. A compromise might be to only include online sales that are dealt with at the premises. The landlord will generally have the right to ask for the tenant’s books to be audited. This could be a considerable expense.

The fixed part of the rent will often account for around 75-80%. The percentage of the turnover paid might range from 5-12%.

The smaller the fixed rent, the higher percentage of turnover the landlord will want.

Where the goods being sold have a low profit margin but are sold in a large quantity, the tenant will only want to pay a low percentage of their turnover. Conversely, where goods have a large profit margin but a lower volume of sales, the landlord will want a higher percentage of the turnover paid.

It is always advisable to use an expert in commercial property to deal with the negotiations and the drafting of the agreement to ensure that the deal that is agreed is favourable and fair.

 

Implications of turnover rent

The tenant will need to keep their books very accurately and ensure that figures are up to date. The calculations can be complex when issues such as VAT, bad debts and returns are factored in.

The agreement should deal with confidentiality issues, as the landlord will be privy to sensitive information about the business.

Turnover rent can help a business cope with a downturn in sales and give a landlord the potential to benefit in the event of an increase in profits in return. But the agreement will work best when the relationship between the parties is good.

 

Contact our Isle of Man commercial property team

Thinking of leasing a commercial property on the Isle of Man?  Speak to one of our expert commercial property advocates, ring us on 01624 665522 or email us: hello@quinnlegal.im. We will be happy to hear from you.

 

About Kathryn

Kathryn is the Head of Property at Quinn Legal

Click her photo below to find out more!

 

 

 

 

 

When a property owner adds or removes someone from the title of the property, this is referred to as a transfer of equity. The property could be transferred into joint names or from joint names into a sole name.

There are a number of considerations before going ahead with a transfer and you need to understand the implications to ensure that it is the correct move.

Why Property Is Transferred To Joint Names

There are several reasons why you might want to transfer a property into joint names, such as wishing to share ownership of your home with your partner, wanting to own a property with another family member or for tax or inheritance reasons.

If you wish to retain any control over what happens to the property you should take legal advice before carrying out the transfer. For example, you may want to own the property in unequal shares and ensure that, should something happen to your co-owner, you would not be forced to sell the property.

Most wishes can be accommodated, but it is important to put the right legal framework in place if you are contemplating a transfer.

Which Type Of Joint Ownership Is Right For Your Circumstances?

There are two types of joint property ownership. You can either own as joint tenants or as tenants in common.

Joint Tenants

Owning a property as joint tenants means that, should one of you die, the other owner automatically owns the property and it will not form part of your estate. This means that you cannot leave your share in the property to anyone in your Will.

Tenants In Common

If you own a property as tenants in common you can choose to own unequal shares. Your share will pass in accordance with the terms of your Will or, if you have not made a Will, under the Rules of Intestacy.

If you and your co-owner will be putting different amounts of money towards the property or someone, such as a parent, has gifted money which they would like to safeguard, this type of ownership may be preferable.

A deed of trust will generally be drawn up setting out the way in which the property is to be owned. This can include more than two owners if you wish.

The Transfer Of Equity Process

You should start by speaking to an experienced property advocate to ensure that the transfer is in your best interests and that you will have the right type of joint ownership for your circumstances.

Your advocate will then need to obtain a copy of your title and draw up the legal transfer document. If there is a mortgage over the property, you will need to seek the lender’s permission to the transfer and they will generally go through a process similar to approving a mortgage application before agreeing to add a second person to the title and the charge.

There will be a new mortgage deed to be executed as well as the transfer document to be signed and witnessed. Once these have been signed, your advocate will arrange for registration of the transfer at the Land Registry.

If the property is leasehold, it may also be necessary to notify the freeholder of the transfer, and your advocate will make sure that the correct notice is served to fulfil this requirement as well as obtaining their consent, if required. The freeholder may also ask for the new joint owner to sign a deed of covenant agreeing to abide by the terms of the lease, which your advocate can deal with.

For more information in respect of our services, see our page on transfer of equity Isle of Man.

If you will be transferring a property into joint names as tenants in common, it is also recommended that you have a valid Will in place. We offer a comprehensive Wills service and will be happy to discuss your needs with you.

Contact Our Isle Of Man Conveyancing Team

If you would like to transfer Isle of Man property into joint names, Quinn Legal’s property team can discuss your options and advise and represent you.

To speak to one of our expert Isle of Man property advocates, ring us on 01624 665522 or email us: hello@quinnlegal.im.

 

About Olivia

Olivia is a Conveyancer within the QL Property Team.

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If you are a commercial landlord, you have a right to be compensated if your premises fall into disrepair while a tenant is in occupation.

You may need to bring a claim against the tenant to enforce these rights, either during the period of the tenancy or at its end. This type of action is known as a dilapidations claim.

 

Making a dilapidations claim

The lease that you have entered into with your tenant will include repairing obligations. Where the tenant has not met these, you can make a claim for compensation to allow the property to be put back into the state it should have been in, had the lease been complied with. The first step is generally to ask an expert dilapidations surveyor to prepare a schedule of dilapidations. This will list any breaches of the terms of the lease and give details of the work necessary to remedy the situation.

The claim can also include compensation for failing to keep statutory documentation up to date, such as electrical safety certificates, as well as for loss of rent while the property is undergoing work.

In addition, you can request that the tenant pays your legal fees and surveyor’s fees in the claim.

The schedule should be served on the tenant with a full breakdown of the amount claimed. Where the claim has arisen because the lease is at an end, the claim will ideally be made within a couple of months of the tenant leaving. The lease may set out a process for dealing with dilapidations, and this should be followed exactly.

The tenant may choose to defend the matter and is likely to instruct their own surveyor to carry out an assessment of the condition of the property.

Once their report is available, you may be able to enter into negotiations with them or their advocate to try and agree on a settlement. If the tenancy is ongoing, the tenant can arrange for the necessary repairs to be carried out. If the tenancy is at an end, you may be able to come to an agreement as to how much they will pay.

 

Resolving a dilapidations claim

If it is not possible to reach agreement, then alternative dispute resolution may be helpful. This will allow you and your tenant to explore ways of reaching a settlement that you can both agree on without the need for a court hearing.

Options include mediation and arbitration. The courts prefer that parties attempt to resolve issues before proceeding to a hearing wherever possible.

If the court is asked to decide the issue, it will cap the amount awarded to the lower of either the cost of the remedial work required or the reduction in value of the property. Settlements are

generally agreed on the basis of the cost of the works and dilapidations cases do not often reach court.

Our commercial property team are experts in negotiating dilapidations claims and will work with your surveyor to put together a strong case on your behalf.

 

Contact our Isle of Man commercial property team

If you are dealing with dilapidations or you would like other advice concerning your role as a commercial landlord, we will be happy to help. To speak to one of our expert Isle of Man commercial property advocates, ring us on 01624 665522 or email us: hello@quinnlegal.im.

 

 

 

 

 

 

Buying a new build home comes with more complications than a normal house purchase. The documentation is far more extensive and buyers are usually pressured for a fast exchange of contracts.

At Quinn Legal, we understand the pressures of buying a new build home.  Our experienced conveyancing team will work quickly and efficiently to meet even the tightest deadline.

Buying A New Build Home On The Isle of Man

The Advantages Of Buying A New Build Property

As well as the obvious bonus of living in a brand new house with no repairs or remedial work to be carried out, buying a new build has other advantages. With rules governing energy efficiency, a new home will generally have lower running costs. You will also usually be given a ten-year structural warranty, covering you for any major structural problems that may arise.

The New Build Purchase Process

Once you agree to buy a new build, you will usually be asked to exchange contracts within a set period of time, often 28 days. This is much quicker than a usual exchange.  It is therefore crucial to instruct advocates straightaway.  Choosing ones with considerable new build experience wherever possible.

They will receive a large packet of contract documentation which they will need to work through.  Raising any questions with the developer’s advocate. They will also need to request any necessary searches quickly to ensure the deadline is met.

Your advocate will ensure that the legal title to the property is in order.  To include all issues such as ownership of the roads, adoption of the sewers, planning consent, building regulations approval and adequate obligations on the part of the developer to maintain common areas.

On exchange of contracts, a deposit will be paid to the developer’s advocate. It is generally possible to use the deposit on a related sale if there is one. If the property has not yet been finished, then the contract will usually state that notice of completion will be given.

It is important that your advocates understand the new build process and that they are ready to move quickly once the notice is received. They will need to arrange for your mortgage advance to be sent in readiness and ensure that last minute searches are carried out.

Completing A New Build Purchase

On the completion day, your advocate will send the balance of the purchase price to the developer’s advocate, who will authorise release of the keys to you.

When you move into a new build, you are advised to check the property thoroughly for so-called snagging items, ie. any issues with the build or finish that need to be attended to. The builder should deal with these within a reasonable time frame.

It is open to you to have a snagging survey carried out by a professional surveyor. Ideally, this would be carried out before exchange of contracts, but often developers will not consent to this or the property is not ready for an inspection. In that case, you can arrange the survey as soon as possible and provide the developer with the results so that they can deal with the points raised.

Contact Our Isle Of Man Conveyancing Team

At Quinn Legal, our property team has extensive experience in dealing with new build property purchases and we will be happy to hear from you if you are intending to buy a new build home on the Isle of Man.

To speak to one of our expert Isle of Man property advocates, ring us on 01624 665522 or email us: hello@quinnlegal.im.

Alternatively, you can fill out our online questionnaire and we will contact you.