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Hundreds of commercial properties “sitting targets” for waste criminals

It a well known fact that industrial units have always been targeted by waste criminals, leaving premises full of waste, often structurally damaged and with a costly clean-up bill.

Now investigations by the Environment Agency have revealed that ‘baled waste crime’ is on the increase. The waste is often plastic, builders, commercial or household rubbish that cannot be recycled and which has no monetary value.

Click here to read the full press release from the EA on this subject.

What are the risks of waste and how can you prevent yourself from becoming a waste crime victim?

There are several risks to property owners if waste ends up being illegally dumped on your land or premises.

  • Financial: waste illegally dumped will have to be removed to a permitted waste site. This inevitably falls to the property owner and the costs can be high.
  • Reputational: illegal waste dumping can result in considerable local and national media attention. These sorts of activities can damage reputations.
  • Enforcement: anyone involved in the illegal keeping, treatment and disposal of controlled waste commits an offence, in some cases even if it is done unwittingly. The Environment Agency can serve notice on property owners to clean up any waste left on their land if not correctly permitted.

Steps to take to protect yourself

Ensure you understand what your tenants business is:

  1. Ask if your tenant is involved in waste activities on your land
  2. Check if they have the necessary authorisations in place to carry out the activity, including planning permissions
  3. Use the Public Register to check your tenant has a current permit or carrier/broker registration: www.gov.uk/guidance/access-the-public-register-for-environmental-information
  4. Make sure you understand the difference between a site that is permitted by the  Environment Agency and one that is register exempt.
  5. Familiarise yourself with the relevant legislation and the risks posed to you if a site doesn’t meet the conditions of their permit or the terms of their exemption. An operator who registers an exemption yet fails to comply with the conditions set out in that exemption is carrying out an illegal activity.

Carry out rigorous checks on prospective new tenants:

  1. Make sure you secure adequate identification documents and a down payment from a traceable bank account.
  2. Use freely available information such as Companies House Beta. https://beta.companieshouse.gov.uk/
  3. If you are renting to a newly formed company, make sure you meet and initially deal with the Company Director.
  4. Investigate the status of the new company’s finances to ensure they are strong.
  5. Check if the new company has a website and look to see if contact details match those you have been given.
  6. Ensure you know what business they intend to carry out in your unit and that is appropriate for the unit size. Check their business model make sense. Ask for examples or references for work done elsewhere.
  7. Be cautious if your prospective new tenants arrive on foot and not in a vehicle.
  8. Make sure you check out the details of any witness to the lease agreements, to be sure they are plausible and traceable.

Check that tenants are operating properly by carrying out periodic inspections and audits. Any of the following could indicate they are not operating the business they said:

  1. More lorry movements that you would expect for their business
  2. Activities on site at strange hours of the day and night
  3. Evidence of unusual odours and/or pests
  4. Complaints from adjacent tenants about their new neighbours.

Share information on poor practice and suspected wrong-doing:

  1. The Environment Agency are looking for you to share information with a view to building effective partnerships, work together more efficiently and make earlier, more targeted interventions.
  2. You can contact the Environment Agency incident hotline 24/7 on 0800 807060.
  3. Or send information anonymously to Crimestoppers on 0800 555 111 or online at www.crimestoppers-uk.org.
  4. The reports they receive through Crimestoppers help them to identify companies that are illegally operating or exporting waste illegally.

What if it happens to you?

Many property owners policies contain an element of cover for Fly Tipping to pay for the costs in clearing and removing any property illegally deposited so if you do have an occurrence please contact us so we can notify your insurer.

Solicitors and Legal Indemnity Insurance

 

Legal Indemnity insurance is now common place in today’s UK property conveyancing market and if you require an insurance policy you should consider using Arlington Insurance Services because as an Insurance Broker we are a professional firm regulated by the Financial Conduct Authority (FCA) whose prime purpose is to help customers find suitable cost effective insurance protection.

We work with your solicitors or legal representatives to provide the appropriate solution and we have access to a wide choice of products from various insurance markets. We can also give advice on suitable insurance protection and we will provide clear information and documentation and state the costs of the policy including any fees.

For more information about legal indemnity insurance and about how Arlington Insurance Services can help you with this please click here to view our Legal Indemnity information sheet.

Beneficial Ownership Of Overseas Entities Holding UK Property – Draft legislation published

The UK Government has published draft legislation to implement a new public beneficial ownership register for overseas entities of UK real estate, as part of its anti-corruption policy. It will go live in 2021 and will have direct consequences for the UK real estate market.

The proposed new rules follow the introduction in 2016 of the People with Significant Control (PSC) public register of beneficial owners of UK companies, and research conducted by the department for Business, Energy and Industrial Strategy (BEIS). This is a a further step towards creating transparency of ownership of UK assets by overseas legal entities.

The Draft Registration of Overseas Entities Bill (click here to see the document) is intended to force overseas entities owning UK property to name their ultimate owners on a public register or face criminal sanctions (prison sentences of up to five years) and unlimited fines if they try to sell or lease the property without first registering the beneficial owners. The rules would apply not just to overseas companies but to ‘any non-UK registered body with legal personality that can own property in its own right’.

From 2021 it will require overseas entities to register with, and provide details of their beneficial owners to Companies House before the overseas entity can be registered as the legal owner of UK land – whether commercial or residential.  The register will be publicly accessible.

The Government is inviting comments on various aspects of its draft Bill by 17 September 2018 and it is intended that the new rules will come into force in 2021.

For more information on this topic click here for a recent article by Katten Muchin Rosenman LLP. If you wish to know more about our Real Estate propositions our contact details can be found here.

Changes to the taxation of UK real estate held by non-UK residents

Nearly two thirds of real estate investors are concerned by the impact of changes to UK Capital Gains Tax (CGT) according to a report commissioned by Intertrust.

The Government has recently published its response to the consultation alongside draft legislation covering some but not all aspects of the changes to the UK taxation of capital gains realised by non-residents from disposals of UK property.

As part of the Autumn Budget on 22 November 2017, the UK Government announced significant changes to the UK taxation of capital gains realised by non-residents from direct and certain indirect disposals of UK property which will have effect from April 2019. The new rules have the potential to impact significantly on the UK tax liability of non-residents holding real estate.

There will now be a further technical consultation on the draft legislation and the Government’s proposals but it is not anticipated that the main proposals will be amended significantly before they are put in place.

It appears that the Government has listened to feedback from the initial consultation concerning various perceived problematic aspects of the original proposals but with less than a year before the implementation, non-resident investors in UK property should be considering the potential impact of these changes for their existing and planned investments and if it might be necessary to consider a restructuring of existing arrangements.

For more information on this topic click here for a recent article by Katten Muchin Rosenman LLP. If you wish to know more about our Real Estate propositions our contact details can be found here.

 

What you need to know about Islamic Real Estate Insurance

Islamic insurance (known as Takaful insurance) has been introduced as an alternative to conventional commercial insurance which is seen as violating Islamic restrictions on riba (interest), al-maisir (gambling), and al-gharar (uncertainty) all of which are in contravention of Shariah principles.

Generally a special wording is unnecessary but to demonstrate that it is Shariah compliant the wording should contain an Insurer Protocol which will demonstrate to the policyholder how the insurer complies with Shariah principals and also how it will discharge its obligations under the contract. This Protocol will usually take the form of an endorsement to the policy wording.

Policyholders agree to guarantee each other and make contributions to a mutual fund, or pool, instead of paying premiums. The pool of collected contributions creates the takaful fund. A takaful contract, like a conventional insurance, specifies the nature of the risk and period of insurance.

The fund is managed and administered on behalf of the participants by a takaful operator, who charges an agreed-upon fee to cover costs. Much like a conventional insurance company, costs include sales and marketing, underwriting, and claims management.

Any claims made by participants are paid out of the fund and any remaining surpluses, after making provisions for the likely cost of future claims and other reserves, belong to the participants in the fund and not the takaful operator. Those funds may be distributed to the participants in the form of cash dividends or distributions or via a reduction in future contributions.

Recently AXA Insurance have teamed up with Cobalt Underwriting to create a new Shariah-compliant insurance product for the real estate sector. The new product, which is available now, is an add-on to AXA’s existing real estate product. They have devised new premium payment and claims processes to ensure the product adheres to the key principles of Islamic insurance.  To see more details on the AXA product please click here.

At Arlington we specialise in Real Estate insurance and we have a team of friendly people who are immensely experienced at providing specialised risk solutions.

If you wish to know more about our Real Estate propositions, including Takaful insurance, our contact details can be found here.