Archive for June, 2016

Japanese Knotweed – in your “Beechgrove” garden?

Monday, June 20th, 2016

A Will
Japanese Knotweed is an invasive plant with incredibly strong roots that could cause serious and significant damage to your property.  The plant was introduced by the Victorians for ornamental purposes and it grows rapidly, by as much as 1.5 metres a month in the growing season from May to October.

Japanese Knotweed is not particularly widespread in and around Aberdeen but it does occur.  Fortunately even where it is found there is no need to panic as the issue can be resolved, particularly if caught quickly and treated properly.  You should not try to deal with the plant yourself but rather it should be excavated from the ground and disposed of under license. It is so invasively dangerous to buildings that Japanese Knotweed is a controlled waste that requires controlled disposal under the Environmental Protection Act, 1990. Any excavation will require extensive digging as leaving just a small section could allow it to grow back.  It can also be treated chemically, although any chemical treatment would require to be applied over the course of several years to be effective.  You will see from the methods involved that the treatment is likely to be time consuming and therefore relatively expensive.

Some surveyors make a note on Home Reports that they have not carried out an inspection for Japanese Knotweed as they are not obliged to look for this as part of the Home Report.  However where the issue is evident to the surveyor they will comment on this.  Whilst some mortgage lenders are reluctant to provide a mortgage on properties affected by Japanese Knotweed many in fact will still be happy to lend.  Where they do lend they will look at the particular circumstances of the case and will wish to look for assurance that treatment works have been carried out/will continue to be treated as necessary and that a specialist guarantee has been issued.

If Japanese Knotweed affects your property another issue to check is the availability of buildings insurance for the property.  The insurance company may attach a higher than normal premium to account for the higher than normal risk of damage that could potentially be caused by the invasive plant.

If you are aware of this issue affecting your property I would suggest that you deal with the matter as quickly as possible not only to prevent any significant damage to your property but also to avoid any impact on the value of your property or any potential difficulty in selling your property in the future.  A further caution against ignoring the presence of the weed in your garden would be that allowing the spread of the weed into the wild could be an offence under the Wildlife and Countryside Act 1981 as amended by the Wildlife and Natural Environment (Scotland) Act 2011.

If Japanese Knotweed affects both you and your neighbours then, as with most neighbour issues, you would be best to discuss the matter amicably to reach a practical solution.

Should you have any concerns about Japanese Knotweed at your property or if you are aware of its presence on neighbouring property it is important to act fast before it spreads (and it will definitely spread further if left untreated!) and our Mark Allan (contactable on 01224 563342 or by email at m.allan@jgcollie.co.uk) will be happy to discuss this with you and assist in any way he can.

2016 Starts to Look a Bit More Rosy – Despite the Brexit!

Monday, June 20th, 2016

A Will
By Scott Middleton, Chartered Financial Planner

In our last market commentary in February we were coping with the increased anxiety caused by falling equity markets both in the UK and abroad. This has been replaced by general feeling of wellbeing as the reversal in fortunes of equities has seen an almost total rebound in the UK and an even greater rally in Asia and the emerging markets. The FTSE World Index rose 4.96% and the FTSE 100 rose 4.08% over the period whilst the IA Asia Pacific Excluding Japan Index returned 7.51% and the IA Emerging Markets Index 11.62%.

Why has this happened? Well, in recent times the price of oil has become regarded by many as a barometer for the health of the global economy, if not the local Aberdeen one. Whilst this is not necessarily a valid economic thesis, the sliding price was unnerving to investors and the recent recovery has been the main catalyst for the positive returns across many indices.

One thing that these current market conditions vividly demonstrates is that investors are now more prone to anxiety than prior to the credit crisis. In 2007 investors barely blinked when a run on Northern Rock bank ended in its failure, which with hindsight, was a perfect dry run of the credit crisis that later engulfed nearly all major Western banks. This warning occurred one year before the failure of Lehman Brothers, yet few investors took notice because the confidence in banks and their regulators was so high that a failure beyond an isolated event was unimaginable.

However, as a consequence of this experience investors are now acutely aware of possible unidentified risks and relatively small quantities of bad news can create a significant market reaction. This means that, from an investment perspective, positive news-flow is being received calmly, whilst negative news-flow is echoing around the financial media, reflecting the underlying anxiety of investors.

This anxiety has mostly manifested itself in the high valuations of sovereign bonds. It was once believed, on reasonable grounds, that the lowest possible yield would be zero as it would not make sense for an investor to pay for the benefit of lending their money. However investors are now paying borrowers to lend them money with the default risk transferring from the lender to the borrower in terms of interest payments. The Financial Times now estimates that there is over $10 trillion of sovereign debt worldwide, which is yielding less than zero for investors.

Historians look back with disbelief at some of the investment decisions which led to market instability. The ‘tulip bulb bubble’ reached a peak in 1637 when a single tulip bulb sold for 10 times the average salary of a craftsman. In the 1840’s, railway mania created a speculative frenzy with money pouring in creating opulent stations but little return. Japanese equities peaked in 1991 with dizzying valuations as over-confidence created a greed based cycle of over-investment. It is difficult to imagine negative yielding bonds not joining this list in the future, such is the difficulty in understanding the rationale for buying at these prices.

There are signs that the underlying global economy is continuing to recover. Unemployment has continued to fall in the UK and the USA, inflation has ticked up a little in Europe and global economic growth generally remains positive. There have been a few downward revisions, but not particularly significant.

We expect that the low unemployment level will drive wage inflation higher increasing demand and pushing core inflation higher. The bounce in the commodity cycle will also influence prices adding further upward pressure to inflation. Whilst many market commentators are expecting inflation to remain subdued, we perceive this to be a more temporary situation.

The short term risk facing investors is the Brexit vote on 23rd June. This is a binary event which is likely to lead to a small relief rally in the event of an ‘in’ vote and significant volatility in the event of an ‘out’ vote. The result is too close to call at the moment.

In summary, we expect periods of anxiety to reoccur frequently, but ultimately equity markets will continue to provide attractive returns supported by low levels of global economic growth. Fixed interest markets remain at unsustainably high levels with yields too low to justify the capital risk. US equities are the least attractive market on the basis of valuations whilst Asia & Emerging Markets are relatively more attractive and are further supported by the recovering commodity cycle.

Remember, however, that the value of investments can go up as well as down and past performance is not necessarily a guide to the future.

Should you wish to discuss this market summary, please contact Scott Middleton of James & George Collie Financial Management

Matrimonial implications of the new Succession legislation

Monday, June 20th, 2016

A Will

The Succession (Scotland) Act 2016 was enacted earlier this year and when it comes into force it will introduce not only substantial changes to the Law of Succession in a wider sense but also in relation to matters of particular interest to family lawyers and those who are going through a separation.

Since the Succession (Scotland) Act 1964 came into force, there have been significant changes not only in family law but in society as a whole.  Statutes have been created dealing with parties who cohabit and, indeed, in relation to those who enter civil partnerships.

Until now, the fact of a couple divorcing, or the marriage being dissolved or annulled, did not affect provisions of a pre-existing Will.    The new position will be that the former partner, civil partner or spouse of the person who dies will be treated, for these purposes, as having predeceased the individual who made the Will, will not be deemed to be appointed as Trustee or Executor in the winding up of the estate and will not benefit from the deceased’s estate unless the Will expressly provides as such, even if the marriage is terminated. These provisions are broadly in line with the current provisions in England.

The Act goes further in relation to title to heritage such as land or houses.   At present title may be taken in the name of a couple and the survivor of them.  The effect of this, until the new Act comes into force, is that on the death of the first named individual, title to the entire property automatically vests in the survivor.   If the couple had separated or indeed divorced but title to the property remained in their joint names, title would still have transferred to the survivor unless the parties had entered into a binding Minute of Agreement “evacuating” that provision.  The Act deals with this anomaly by providing that the survivor will be treated as having predeceased the individual who actually dies, the effect being that one half of the land or house will form part of the deceased’s estate for the purposes of the succession. Note that it would appear that these provisions will not affect, for example, nominations of death benefits such as payments for death in service, nominations for payments of pensions etc.

All in all, the aim of this statute is to bring matters of succession up to date.  There will be protections for the disinheritance of a cohabitee and proposals are in hand to extend cohabitee’s claims where a party dies testate i.e. having left a Will.  The Act does not of course cover the situation where a couple cohabit i.e. are not married or are not civil partners.  There are therefore proposals at the moment that a period for lodging a claim by a cohabitant of a deceased person should now be one year from the date of death as opposed to the current six month period.   Important issues which a cohabitant would have to consider before making such a claim would be whether the claimant qualifies as a cohabitant, whether they were cohabiting immediately prior to the death and what percentage of the claim a surviving spouse or civil partner would be entitled to and which the cohabitant could now make.

Whilst the Act will go some way towards taking account of changes in society since the original Succession (Scotland) Act came into force, it is still imperative that clients who are making a Will or who are separating from their spouse, civil partner or cohabitant seek independent legal advice sooner rather than later.

For further advice on any aspect of this article, please do not hesitate to contact Graham A. Garden by email (g.garden@jgcollie.co.uk) or by telephone on (01569) 763555, or any other member of the Family Law Team, or Philip Dawson, Head of our Trust and Executry Department by email (p.dawson@jgcollie.co.uk) or by telephone on (01224) 581581.

FORGET BREXIT – THE RIGHT TO BUY YOUR COUNCIL HOUSE ENDS ON 1ST AUGUST, 2016

Monday, June 20th, 2016

A Property

With the Brexit debate dominating our news headlines for the past few months, you would be forgiven for thinking that this is the most important legal matter of the year. A ‘leave’ vote will end an historic Tory legislative milestone – membership of the European Union.  However, in Scotland, there is another very important piece of Conservative legislation which is ending this year – the Right to Buy your Local Authority property.

You could be forgiven for thinking that this is not immediately pressing for your average tenant, as there is the commonly-held misconception that all Local Authorities have a blanket ban on the sale of their properties. But, there are still a good percentage of tenants able to take advantage of this opportunity.

The Right to Buy your Local Authority property ends on 1st August 2016.  Therefore, all applications have to be submitted to the relevant Council by 31st July, 2016 for their consideration, as this is the end date for the notice period.  The usual criteria apply for being eligible to purchase your home, the main one being that you must have had a tenancy since at least 1st March, 2011, as after that date, no tenant has the right to buy the property from the Local Authority.

There is also a throw away comment at the end of the Right to Buy Regulations.  This states that the Council may still consider selling to tenants after the appointed end date, but this is entirely at their discretion and it would be at full market value, without a discount.  So if you cannot fund a purchase prior to the end date, there is always the potential for an extension, but this is in no way guaranteed.

As mentioned above, should you or a family member wish to exercise this right, or if you wish to assist by partially or wholly funding such a purchase, we can help draft the necessary documentation, and provide the certainty and peace of mind that there is a binding legal obligation on all parties, which cannot be opted out of.  This protects both the owner, and the lender, equally.

Should you have any queries please contact our Jamie L. Robertson, on 01224 581581 or by email at j.robertson@jgcollie.co.uk, who will be happy to assist.