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Wednesday, 16 January 2013

Green Deal or Green Steal?

The Government anxious to meet its ambitious targets for reducing carbon emissions has launched a new scheme called "Green Deal" for homeowners and businesses to encourage them to retro-fit homes and workplaces with a variety of measures designed to increase the energy efficiency and insulation of the buildings.  This scheme is officially launched on 24th January 2013.  The concept is that homeowners and businesses will get an audit of their properties and Green Deal Assessor will come up with recommendations.  This could be a simple as increasing the insulation in your loft to recommending heat exchange systems are installed replacing conventional boilers.   There will be fully Government accredited Green Deal Installers who will carry out the works.  There is up to £10,000 available for each homeowner in funding from the Green Deal Initiative and it is understood that this will be funded with a loan at a interest rate expected to be around 6% per annum repayable over a number of years by a deduction from the homeowner's or business's electricity bill. 

The attraction for the homeowner or business is that you get to reduce your energy bills, do your bit for reducing greenhouse gas emissions without any upfront cost. 

Is there likely to be a stampede as with the solar panel installation debacle which was so popular, the government had to drastically reduce the benefit to homeowners via the feed in tariff?  

The devil is in the detail as with so many government initiatives.  How much will the initial assessment cost and will homeowners be willing to pay this?  Will the charge that attaches to the property put off future homebuyers as the terms of the loans may be as long as 15 years?  Will the accredited Green Deal installers be offering the best prices for these improvements and equipment or could the homeowner/business get a better deal on their own and by funding their improvements through a loan or further mortgage advance?  What improvements will the Green Deal Assessors come up with?  What if the homeowner wants more radical improvements?  What if the homeowner disagrees with the assessments? 

Whilst heat exchangers and heat sink systems are becoming increasingly more economic and efficient, they often rely on the house being well insulated first and sometimes with older properties, there is only so much you can do in terms of improving insulation and heat efficiency. 

A lot of interest will be focused on the early adopters.  If the initial assessment was free, then a lot of homeowners would have the survey done to explore the possibilities especially as energy bills have been soaring recently and are putting massive pressure on low-income households.

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Thursday, 4 March 2010

10 things I wish I had known when I was 17



I have 3 sons and a daughter. My eldest son is 17 years old next week and I shall be having a chat with him during his 17th year probably over a pint. There are certain things which I wish I had been told at the age of 17 which might have made things easier and which might have helped me to get to where I am now more quickly. Of course, that is not to say that any of this advice will be heeded and such is the nature of youth that you think you know better. Also some of the advice is boring and requires hard graft. I just feel it needs to be said even if it is not heeded.

So here is my list of things:

1. Read more. I am vociferously wading through loads of books now which are expanding my thoughts and giving me so many invaluable ideas. Some of the books I have read have changed my life. I just think what I could have achieved if I had read some of these books earlier in my life.

2. A goal is just a dream with a deadline attached to it. It is important to have dreams because with dreams comes passion and you need to have passion in what you do. Passion is vital. If you are not passionate about what you do then you are effectively wasting your life.

3. Analyse your gifts and your talents. What do you do that no one else does as well. What do you absolutely love doing and everyone says you do really well. It could be dealing with people, it could be working outdoors, it could be nature, working with deprived people. Then having identified them, try to build a future that incorporates those talents / gifts. Remember as Confucius said if you love what you do, you will never have to work another day in your life.

4. Avoid settling down too early. When you have a wife and children, your priorities change and it is more important to make sure you have a steady income to pay the rent and feed the hungry mouths. If you have no commitments, you can sleep on floors and live on a shoestring and sleep on sofas and it doesn't matter. I wanted to be a film composer and a good way to get into the business is to be an assistant to an established composer who will teach you the trade. However, you cannot expect to get paid for a while and so sleeping rough (even in the studio) is the reality until you get established and your mentor deems you worthy of paying. You can only do this if you have no wife and children.

5. Don't waste your life watching TV and playing video games. There really is nothing of benefit to be achieved from these activities. Sure, watch a bit of TV and play the odd game but life is so rich and so varied, there really must be better things to do with your spare time (like reading).

6. Don't lose contact with all of your friends. Your friends will do all sorts of interesting things and you never know when you can both be of mutual benefit to each other in the future. Facebook and Linked In are great for keeping in touch with a wide circle of friends even when they dissipate all over the world. Use these valuable tools and try to give some value to all of these friends.

7. Give value first. In fact, you could go further and say give without expecting to receive back. By giving without receiving you increase the respect people give to you and you increase your influence. Read Seth Godin's Linchpin on this. He is spot on in his analysis and is one of the world's great thought leaders.

8. Build relationships to further your success. Relationships are the key to the whole portfolio of skills most young people are going to need moving into the connected digital future. This links with the point about friends. However, this goes further and means you are trying if you can to build a tribe of followers. This can be done with blogs, myspace, bebo, twitter. Pick your tools.

9. Think about your core values and write them down. This is your moral compass for the life ahead. This is your code of ethics, your modus operandi. If you are religious, this is easier to do but if you are humanist, it is about treating others fairly and giving back something to society.

10. Remember to respect your family at all times. You will need them in the years ahead. They could be the best mentors you ever have. Make that weekly phonecall to your parents if you have left home, keep in touch with your siblings. Share your achievements and try to help them. Don't just see them as a source of investment or top up cash.

OK that's enough for the time being. As I said, I will have that conversation but who knows how much will go in but I have to pass it on because I wish someone had done when I was 17.

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Tuesday, 2 March 2010

The business lessons to be learnt from Katie Price



She provokes more scorn and derision than a career criminal and appears to lurch from one PR disaster to the next but the plain fact is Katie Price (the model formerly known as Jordan) is one of the hardest working women in glamour.

The press pour venom and vitriol on her attacking her endless cosmetic surgery enhancements and car-crash lifestyle. She even insisted her current cage-fighter boyfriend succumb to cosmetic surgery before the lucrative glossy mag photoshoot of her nuptials.

Her relationships occupy miles of column inches throughout the press but are there some business tips we can take from her? Bear in mind, she started life as a topless page 3 Sun model which traditionally is a very short career. They often say once you take your top off in modelling, this limits your options instantly and rules out a whole arena of lucrative avenues such as TV ads and television. But Katie Price is constantly reinventing herself and finding ways to leverage her fame. Her auto-biography has been published in 3 books and she has had 2 novels ghostwritten but boy do they sell staying at the top of the bestsellers lists for weeks on both sides of the pond. She has launched clothing lines, lingerie and perfumes. You name it, she has done it.

However, there is behind all of the thousands of television appearances, a strong motivation to succeed and it is clear that she must graft from dawn until dusk to keep up the phenomonal work output.

So distilling her achievements into take home lessons for aspiring entrepreneurs, here is my attempt to condense this into instant wisdom:

1. Be focused in your goals and have a clear long term vision. This clearly underlies Katie's master plan.

2. Be aware that the public is fickle and needs constant stimulation. This includes courting publicity with controversy if this fits in with what you are trying to achieve.

3. Getting to be worth multiple millions, comes not from focusing on money but focusing on tirelessly battling against all adversity and external criticism and working to achieve written goals with single-minded focus. Remember you have to fight your internal demons constantly telling you to give up as well as the external demons in her case being the continual ridicule of the press.

4. Once you have achieved fame try to leverage this in as many ways as possible and then when you hit upon a winning formula really focus on producing regular dependable and saleable output which is what we have seen with her published works including a range of children's novels, one of which has been nominated for a children's book award. This takes serious effort. There may be some ghost writing involved but there is still a brand to be protected and the books have got to be readable.

5. All wealth eminates from writing. Read Scott Ginsberg's blog posts on this. Just Google that quote.

6. Identify your core strengths and then make sure that asset is protected for the future. Katie's is her looks and so the cosmetic surgery is ensuring that the phenomenon that is Katie Price continues well into her sixties and beyond just like celebrities like Joan Collins has done.

7. There is no doubt she has built up an enormous fan base and there are millions of girls who would love her life. This fan base is her instant income in whatever avenue she chooses whether it be food, equestrian products, perfumes or childrens books. Once you have a brand, it is important to keep the brand alive using creativity and innovation.

8. You have to be able to laugh at yourself. During her latest stint in the jungle, you could see that all of the other celebrities were fascinated but almost repulsed by her but she exhibited a solid feet on the ground sensibility which was surprising. She proudly introduced herself as a businesswoman and that is the reality. By some estimates she is worth in excess of £40m which is pretty good going for any business or company let alone an individual. There are undoubtedly an army of loyal staff and advisers who make this possible but there is no shame in delegation.

Look at your organisation / firm and see what lessons you can draw from her success. I would predict she will still be going strong 30 years from now with her shrewd business sense and marketing acumen. It is hard work being Katie Price though. Don't think for a minute, you achieve that without sheer grind and gritty determination.

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Friday, 8 January 2010

11 Reasons Not to Negotiate a Lease Without a Legal Adviser



In these recessionary times, it is very tempting to think you can avoid legal costs by re-using a Lease you have granted before especially if you have the Lease in electronic form. However, I have seen some real howlers which have been drafted by clients and which have ended up costing the client tens of thousand of pounds and in one case hundreds of thousand of pounds. All for the sake of a modest legal bill. You are probably not looking at more than £750 plus VAT for a simple lease with no extra documents. Here are some of the pitfalls I have come across for clients wanting to do a DIY job.

1. Rent review clauses are a minefield and a mistake can be very costly as the error will come up every time there is a rent review. An assumption the new lease is on a "best rent" can lead to a massive hike to take into account a special bidder, Landlord's trigger notices which propose an exorbitant rent and if the Tenant does not respond become binding, false assumptions which result in enhancements of the rent, an assumption that the lease being reviewed is the same as the current lease excluding rent review provisions which means the valuer assumes a lease without rent review provisions which could produce a collossal rise in the rent. I have seen all of these in DIY leases and it has cost the client dearly.

2. The Tenant's break clause is inoperable because it is subject to pre-conditions which effectively mean the Landlord can thwart the break option. For example, the break can only be operated if the Tenant has complied with all of the obligations in the Lease. Any trivial breach of the lease will render the break option inoperable. If a solicitor missed this, you would have a negligence claim just like that.

3. The Lease does not contain adaquate rights for the tenant to use the premises or grants the Landlord intrusive rights over the property which make it impossible to assign/sub-let.

4. The Lease needs registering at the Land Registry but the Lease does not contain the prescribed clauses required in order to register the lease. The Landlord then demands hefty fees to cover his legal fees in varying the lease to include the prescribed clauses.

5. The lease plan is defective and the Land Registry refuses to register the lease or a dispute later arises over what was and was not included in the demise which is only resolved by costly litigation over what the parties' intention were when they granted the lease.

6. There is no mutual enforceability covenant in the Lease so the ground floor tenant cannot get the Landlord to enforce the upstairs tenant's repairing covenants. The resulting damage to the ground floor unit caused by a leaking roof is not covered by insurance because it is a defect in the Lease and the Tenant has got anyone to sue because they dealt with the lease themselves. This was resolved by paying the Landlord a hefty premium to vary the lease.

7. The notice under the Landlord and Tenant Act 1954 was not served (despite the lease containing exclusion provisions) and the Tenant never made a statutory declaration so the Tenant got security of tenure. The Lease contained no rent review provisions and so the renewal negotiations broke down and the matter went to court and the court ordered highly tenant-favourable terms on renewal which the tenant then renewed a further two times. This landlord's loss was considerable because of the loss of a decent market rent and because they were stuck with an unprofitable tenant paying a very low rent for 10 years.

8. The Lease imposed unlimited service charge which resulted in a crippling liability for the tenant who went into liquidation subsequently.

9. The Lease contained extreme restrictions or an absolute prohibition on assigning, sub-letting or charging the premises which means the Lease could not be sub-let, assigned or charged. Another very costly omission.

10. The repair clause failed to take into account the dilipidated state of the premises resulting in the tenant having to put the premises back into a high standard of repair when the repairing obligation should have been qualified by reference to a schedule of condition limiting the tenant's repairing obligation to no better than the condition shown in the schedule.

11. The Lease did not exclude latent defects/environmental liability for past contamination resulting in the tenant having to repair damage caused by negligent design and to cover clean-up / remediation costs imposed by the environment agency resulting in loss running into the hundreds of thousands.

Now the cynical amongst you will say that I am bound to emphasise the importance of using a legal adviser as I have a personal interest in doing so. All I would say is that all of the above examples are based on numerous real-life examples I have come across and in practically all cases the experience was a chastening one because the losses were so large. For no more than £750 on a simple lease, you are tapping into 23 years of practical experience, 3 years at uni studying law, 1 year at law college and 2 years apprenticeship. Not a bad investment really. Is it?

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Wednesday, 9 December 2009

Employee ownership of businesses


I was listening to a fascinating podcast this morning from Peter Day's In Business Programme on BBC Radio 4. He was looking at alternative structures for organisations and in particular structures where the employees own all or part of the shares of the business. These companies have consistently out-performed the FTSE 100 companies and it is not difficult to see why. The employees have a sense of ownership in the business and have a vested interest in promoting and making the business succeed. Employees feel more fulfilled and have a direct say in how the business is run. Companies who had such schemes reported all sorts of unexpected benefits. There was an example of a construction company who had prior to the launch of the employee share scheme repeatedly lost expensive machinery. After the scheme was launched they only lost 1 machine in 17 years. This was not because employees were stealing the machines but because employees were taking more care to ensure the machines were locked away.
There are two possible ways of achieving this. One is for the employees to have shares in a trust and the trust owns the company. This has the advantage in that employees are not constantly buying and selling shares. The shareholders do not have dividends issued to them. This is how the John Lewis Partnership is constituted which has been in existence since the 1950's.
The other way is by way of direct ownership. Companies often give a percentage of the shares of the business to the employees. The percentage of shares which companies choose to distribute varies. The construction company on the podcast had handed out 25% of their shares to their employees free of charge based on the number of employees. However, there would be nothing to stop a larger percentage being distributed.
The businesses which had launched schemes highlighted on the programme varied from architectural firms to cash and carry companies.
The key point made was that in these troubled times, normal shareholders are fairly detached from the companies they invest in whereas employee shareholders have a direct impact on the business. They are not short termist but are genuine looking to build long-term sustainable growth.
There couldn't be a better time to be thinking of these structures especially as it often means that you do not have to rely on bank funding or normal equity investment to build and grow your company. Of course, if the company fails, the employees have more to lose. The recent collapse of Lehman Brothers where the loss to the employees was even more exacerbated because most of the employees had been rewarded in shares serves as a timely reminder of the downside employee ownership but may be it is no bad thing for employees to share some of the risk with the proprietors of the business.

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Friday, 13 November 2009

"Your friend is the man who knows all about you and still likes you" Elbert Hubbard

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Wednesday, 11 November 2009

24 Things Homebuyers should look out for on an inspection



OK so you have decided now is the time to buy a property and the estate agent has sent you a load of particulars. What should you be looking for when viewing a property? Here's 24 suggestions for you to possible consider.

1. Look out for unauthorised alterations, that is to say, which have been carried out without necessary planning permissions, building regulation approvals or if leasehold without Landlord's consent. Ask the Seller questions if they are present during the viewing. Classic issues which can arise where a property has been extended several times and outbuildings, greenhouses or conservatories which go beyond the permitted development limits. The government planning portal has good information on this which can be found here

2. Look out for other properties enjoying rights over the property. Tell tale signs might be a gate in the garden fence leading to another property or such similar signs of rights enjoyed by third parties.

3. Is the property right next to a highway maintainable at public expense or does it appear that it is necessary to pass over private land to get to the property. Ask what the rights are? Has the Seller had to contribute to maintainance of the access road? Have there been any problems using the private accessway?

4. Does the property appear to need rights over adjoining or neighbouring properties?

5. Is any part of the property subject to commons rights? These are historic rights to use land for recreation purposes, to graze cattle or to cut turf or to hunt or shoot. These rights are common in the country and not many inner city properties are affected by these rights. The local authority search should reveal commons rights registered at the County council.

6. Is the property near to a church which might result in liability to repair the chancel (the area of roof over the altar)? This liability can be substantial. A simple search can reveal if the property is within the boundaries of a parish which could have chancel repair liability.

7. Is the property on land with a potential contaminative history such as an old landfill site, old brickworks or gas works. You can sometimes tell by the name of the road the property is situated in eg. Old Brickworks Lane, Pottery Close, Station Road, Gas Works Avenue etc. There is an environmental desktop search which can reveal these matters but lots of Buyers choose not to do this search. Environmental clean up costs can run to the hundreds of thousands so it is false economy for a search which costs about £50 and takes 48 hours to do.

8. Is there a development nearby which might affect the use and enjoyment of the property? Tell-tall signs to look out for are open fields or countryside near to a modern housing estate which might have the potential for being re-designated from green field land to housing stock. Other developments can be very worrying such as large commercial redevelopment for say a supermarket or car park which could affect transport and traffic.

9. It is a good idea to come back and see the property you are interested in at 9pm on a Saturday night to see if there are noise issues or youth disorder concerns. You may also pick up on noisy neighbours and parking issues. Go undercover and do a bit of sleuthing.

10. Make enquiries of neighbours and at local shops. Do they know of any issues or problems? There is no guarantee they will tell you but it might unearth some issues.

11. What schools are in the catchment area of the property? It can be really difficult to get children into good schools out of the catchment area. What criteria do the schools apply? Do they have an admission policy? Entrance exam? These questions may not affect you but they could affect your buyer when you come to sell.

12. If the property is leasehold, is the Landlord an absentee landlord? Has this caused problems with managing and repairing the building? It is possible to get an indemnity policy to cover the risk of there being a problem but you may feel that an indemnity policy is not really a solution if the building needs repair and no one seems to be taking responsibility.

13. If the property is leasehold, is the building being well-managed? Ask the Sellers and other residents in the building. Gather as much information as possible. Have the tenants ever tried to buy the freehold? What price did they offer? Were there any tenants who did not want to participate? You need at least 50% of the flat owners to serve a notice. What are the service charge levels like? Are there any major items of expenditure looming such as lift replacement, roof repairs or car park resurfacing? All of these might affect your decision to proceed.

14. Has the property had new double glazing / front or back doors fitted since 2002? Does the Seller have building regulation approval for this or a FENSA certificate if the fitter was part of the trade association.

15. New central heating systems/boilers also need building regulation approval now. Has the system been recently replaced?

16. Is there evidence of dry or wet rot in the property? Test the window sills by gently squeezing them. Can you see woodworm in the beams if it is an old property? Does the Seller have guarantees for any woodworm treatment? These areas will be covered by your survey but the surveyor will often omit an opinion on this and suggest specialist reports.

17. Can you see any signs of subsidence, movement or settlement? Are there any large cracks in the walls? Have any underpinning works been carried out? Is there are a guarantee for the work? Do the buildings insurers cover the subsidence now?

18. Can you see any tell-tale signs of dampness in the property such as flaking paint on walls or ceilings, running water or dampness, condensation on the windows, a smell of dampness when you go in certain rooms? Ask the Seller whether the property has an effective damp course and/or ventilation. Are there any guarantees for work carried out?

19. Is the driveway to the property shared with another property? What rights would you have in respect of the drive? Could you resurface it? Who would contribute to the costs? Have there been any disputes over the use of the drive?

20. This is especially important for flats and terraced or semi-detached properties. What are the noise insulation properties of the property like? Can you hear the neighbours? Can they hear the Seller? Does the flat above have laminate or hard wood flooing? This noise can drive you mad especially late at night. Are the walls to adjoining properties paper thin? This can be a big issue for modern properties which have very insubstantial walls.

21. Do the drains pass over land privately owned or do they connect straight to mains drains in the street? Look out for inspection covers which may give clues as to the route of the drains/sewers.

22. For leasehold properties, does the flat have an allocated parking space or spaces? Where do visitors park? Is it easy for visitors to park? Is there a legal right in the lease for visitor parking? What about bicycles? Is there a cycle rack/shed? What rights are in the lease to put bicycles there? Is there a limit on how many bicycles you can park/store there?

23. For leasehold properties again situated on the upper floors, does the block have a lift ? You would be amazed how many upper floor flats have no lift access which can be a major headache for bringing furniture etc. into the Flat. Does the lift work or is permanently vandalised/broken?

24. Leasehold properties: gardens: Do you have a right to use the garden? Is this exclusive or shared with other flats? Does this cause problems? What about garden sheds and refuse areas? This can be a major issue for homebuyers and needs to be flushed out.

One final thing which you may wish to consider which is not in the standard legal enquiries, is whether the property is haunted or has experienced any paranormal activies. You may laugh but a friend of mine bought a flat and the shower doors kept exploding in the morning. Turns out the property was situated on the site of an old mental institution where many unfortunate inmates passed away in distressing circumstances. I would definitely want to know about anything like that leaving out whether I believed in ghosts or not!

Anyway, I hope you will find some of these issues helpful. They are based on issues which have been raised by clients in the past some of which have proved to be enough for the buyers to pull out. Many of the issues will be flushed out by a good thorough conveyancer and surveyor. So don't feel you need to tick off every point. It is not usual for conveyancers to inspect the property themselves but you may find that this is necessary if there are problems. Many conveyancers are happy to do this as part of their service. We certainly are so do shout if you need us to view the property with you if a particular concern arises from this checklist.

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