Legal Implications of Construction Decisions: Converting a Country House into a Hotel - Assignment Example

Legal Implications of Construction Decisions: Converting a Country House into a Hotel Submission: Contents Contents 1 Legal Implications of Construction Decisions: Converting a Country House into a Hotel 2 Setting Up of the Company 2 Advantages of Using a Corporate Structure 5 A corporate structure is merited for providing a diverse team for managing an organization that has diverse individual interests and specializations, which is necessary for maintaining high levels of competitiveness for the company. The organization is presented with diverse ideologies that influence the communication processes and decision making, which are vital in organizational growth and development. Corporate structure will provide a decentralized decision making system and processes, and hence improve organizational decision making, whereby different responsibilities are divided within the management and directors as per individual specializations, abilities and capabilities (Payne, 2014). 5 Leasehold versus Freehold 6 Conveying the Property Title 7 Restrictive or Easement Covenants 8 Securing Planning Approval 9 Property Development and Tort 9 Security of Tenure 10 References 10 Bernier, H., Hollis, A., Johnson, R. & Michael, E. (2014), Litigating disputes over easements and restrictive covenants. Eau Claire: National Business Institute. 10 Enever, N., Isaac, D. & Daley, M. (2014), The Valuation of Property Investments. Hoboken: Taylor and Francis. 10 Gregory, J. (2014), Central counterparties: mandatory clearing and bilateral margin requirements for OTC derivatives. Chichester, West Sussex: Wiley. 10 Horsey, K. & Rackley, E. (2013), Tort law. Oxford: Oxford University Press. 11 Payne, J. (2014), Schemes of arrangement: theory, structure and operation. Cambridge: Cambridge University Press. 11 Radosavljevic, M. & Bennett, J. (2012), Construction Management Strategies a Theory of Construction Management. Hoboken: John Wiley & Sons.  11 Legal Implications of Construction Decisions: Converting a Country House into a Hotel Setting Up of the Company There are many requirements for the formation of a company in London, as guided by rules and regulations. The formation of the company will start off from the formulation of a unique company name, as regulated by London authorities. There will be a search of the Company House’s register to ensure that the formulated company name does not exist in the register or be closely similar to another company’s name (Gregory, 2014). The company name must not contain misleading words or expressions and must not suggest any connection with the government or other authorities in West London. This will ensure that there is no infringement of copyright and intellectual property rights, as well as adherence to the provisions by the Company House. Before registering the company’s name, there will be a consultation or check with the trade mark register to ensure that it can be registered as a trade mark. There will be development of a business name, as formulated from the registered company name to facilitate easier conducting of business activities. The formulation of the company name, trade mark and business will result from extensive consultations and agreement amongst all the associates, in the form of consensus where every associate will provide suggestions to each of the three (Gregory, 2014). On the other hand, the registration of the company will be followed by the development of a unique company address as required by the Company House, HM Revenue and Customs, and other concerned authorities, as well as an address for clients. The company address will be a physical address registered in London, which is the planned company’s location. This will ease the management of corporation tax and the accessibility of the company in the Company House’s register. Each of the associates will become a director and shareholder of the corporation. There will be a collective formulation of an article of association or memorandum of association amongst the associates. This will facilitate the communication and decision making processes within the organization, and hence improve efficiency through effective coordination and cooperation (Gregory, 2014). The formulation of the article of association will be followed by the initiation of shares for the declaration of the statement of capital. The total number of shares will be declared and each of the directors’ and shareholders’ names and addresses declared and registered with the company (Gregory, 2014). The statement of capital will include the details about the prescribed particulars of the shareholders, which includes the types of shares held by each of the shareholders and their respective dividends, the rights of the shareholders on their shares, the contribution of the shareholders in the organization’s decision making processes, and the number of votes each of the shareholders is entitles to in case of voting during decision making processes (Gregory, 2014). Additionally, the shares of the company will be declared as per the initial contribution of each of the shareholders, who are the initial associates, and the shareholding rights will be formulated from the declared types of shares. The shareholding of the company will not be limited to the associates, and hence room will be created for future shareholding from other interested parties who are ready to invest with the company (Payne, 2014). The memorandum of associated will be formulated together with the articles of association amongst the associates as an agreement of partnership and formulation of rules governing the registered company. Formally, the associates will collectively agree to form and register the company, which will utilize the memorandum of association template provide b the Company House. This will ensure that the company’s documents are valid. The articles of association and the memorandum of association will be formulated and written as the rules and policies governing the company. This will specify on the company’s decision making processes. The successful completion of the company registration process will lead to the acquirement of a certificate of incorporation, which formally and legally recognizes the company’s registration and registration of its trade mark, including the company number and the formation date. The associates will be appointed as the company’s board of directors, or they will choose a group amongst themselves to act as directors and run the company (Payne, 2014). Furthermore, the registered company will set its Corporation Tax through provision of specific company information to the HM Revenue and Customs (HMRN) authority within the first three months of business (Gregory, 2014). This will help the HMRC in establishing the specifics about the company’s payment of Corporation Tax, through the formulation of the Unique Taxpayer Reference that formalizes the provision of company information to the HMRC, and the development of an online HMRC account for disbursement of Tax Returns and Corporation Tax. HMRC will be provided with the company’s formulation and registration date, company name and registration number, the physical address, type of business, and the date for creation and declaration of annual accounts. The HMRC will also be notified on the company’s interest in acquiring the country house and reconstruction into a hotel, and the subsequent lease to the hotel management company. The company will provide the name and address of the country house and its owner(s) (Gregory, 2014). Advantages of Using a Corporate Structure A corporate structure is merited for providing a diverse team for managing an organization that has diverse individual interests and specializations, which is necessary for maintaining high levels of competitiveness for the company. The organization is presented with diverse ideologies that influence the communication processes and decision making, which are vital in organizational growth and development. Corporate structure will provide a decentralized decision making system and processes, and hence improve organizational decision making, whereby different responsibilities are divided within the management and directors as per individual specializations, abilities and capabilities (Payne, 2014). Additionally, change implementation and management is easier and more effective in corporate structures as compared to other forms of organizational structures. Organizational change can be easily implemented and implemented through improved organizational communication channels that ease decision making processes. On the other hand, there is an experienced high response and adaptability to organizational change due to decentralization of the management and decision making (Payne, 2014). The management can easily interact with the employees and clients, and hence the improvement of organizational communication channels and environmental monitoring. Additionally, a corporate structure is characterized by strong project coordination and product development that are vital in enhancing organizational growth and development. Effective change management and project coordination within the organization with corporate structures ensures flexibility in the use of available resources, in addition to effective organizational budgeting. Corporate organizational structures are also efficient and convenient for the implementation of support systems and the effective implementation of organizational change (Payne, 2014). Corporate organization settings have easily set goals and objectives and convenient division of responsibilities, and hence experience high organizational performance and productivity. In corporate organizations, organizational policies are easily flexible. It is easier to manage a corporate organization and maintain standards of practice due to the simplification of management and ease of access to the communication process and decision making processes (Payne, 2014). Leasehold versus Freehold Based on the company’s objectives and investments, the property will be freehold to ensure the viability of the property and the company in the long term, which is to purchase and refurbish the courthouse and lease it to a hotel management company. A freehold property is one that the company will own both the property and the land on which it is built on (Enever, Isaac & Daley, 2014). As a matter of fact, owning the country house will make the company a shareholder in the hotel, and is hence a long term investment. This will be advantageous in that the company reserves the right to monitor and oversee the effective use of the property, and have the right to redesign and refurbish the country house to the desired state at any given time. During the lease period, making structural changes in the country house will require the approval from respective authorities, though the company will still enjoy the intellectual property rights and the right of ownership and control. The company has its objectives and may decide to use the refurbished country house for its own business activities or production in the future. Additionally, purchasing the country house as a freehold for the company may be costly initially but will eventually reduce future costs, such as payment of annual ground rent that will be paid by the hotel management company during the lease. The company will also reserve the right to maintain and/or refurbish the country house, and evaluate the property at any suitable charging rates (Enever, Isaac & Daley, 2014). On the other hand, a leasehold property provides for rights to access or use a property for a given period of time. The incurred purchase costs are for a short term, and hence the buyer does not reserve the rights of ownership to the property (Enever, Isaac & Daley, 2014). Purchasing a leasehold property would imply that the company will be liable for paying ground rent to the property owner or leaseholder, and the ownership of the property will be automatically granted to the owner after the expiry of the lease period, which ranges from 99 years to about 999 years (Enever, Isaac & Daley, 2014). However, purchase of leasehold properties is relatively cheaper than freehold properties since the developer incurs most of the costs. Additionally, leasehold properties are safer to purchase due to credibility of land titles and ownership rights, and the fact that the developer is liable to maintenance costs on the property until the expiry of the lease period. Nevertheless, the purchase of a freehold property for the company will make the property viable in the long term, despite the high costs to be incurred in securing the freehold property and refurbishing it. The hotel management company will become the owner of the leasehold property after signing lease agreements with our company (Enever, Isaac & Daley, 2014). Conveying the Property Title According to the Town and Country Planning Act 1990, land development is nationalized in England, and hence every individual or group has right to access and/or purchase existing land or properties for development and other commercial uses. It is a consolidation of regulations and policies for the town and country planning, with an exclusion of special controls in buildings with special architecture or historic interests, and infected or polluted buildings that can become a hazard during development. As provided for by the Town and Country Planning Act 1990, an application should be sent to the local planning authority for permission to develop the property. An approval of the application further requires an application to the Secretary of State, especially for listed buildings, as provided for by the Planning (Listed Buildings and Conservation Areas) Act 1990. The Planning Act 2008 provides for the establishment of the Infrastructure Planning Commission and its functions, and also provides the national significance of town and country planning (Gregory, 2014). Restrictive or Easement Covenants In case of presence of restrictive covenants, an application may be made directly to the Secretary of State, who will determine a resolution mechanism to allow for the purchase and/or development of the property in question, or refer the matter to the local planning authorities for conclusive actions. The costs incurred or to be incurred during the application process and any other costs will be incurred by the company (applicant) as provided for by the Town and Country Planning Act 1990 and the Planning Act, in addition to the costs of developing the acquired property. Covenants may be restrictive or positive, depending on the legal and physical statuses of the property. In the presence of a restrictive covenant as the only alternative to securing the title for the country house, the company will employ effective strategies to ensure that the covenant is not compromised, and the development of the property is effectively implemented. In the case of an easement covenant, the company will be liable for any expenses brought about by agreements between the covenant house owner and the buyer (company), which will be partly extended to the leaseholder as caution to avoid compromise on the covenant (Bernier, et al, 2014). Securing Planning Approval The establishment of the Town and Country Planning Act provides for the comprehensive basis for the control of development in England, and is further anchored by the National Planning Policy Framework (NPPF) and other government authorities. The quest for approval for planning will involve applications to the local planning authority in West London and the Secretary of State for redress. The Planning (Listed Buildings and Conservation Areas) Act 1990 provides for the approval of any purchase or development of listed buildings, and hence applications should be timely made to the local planning authority and other concerned authorities, during the process of freehold or leasehold purchase of the country house. The country house is subject to evaluation and inspection by the relevant authorities for the establishment of development activity viability and the safety of the property purchase (Bernier, et al, 2014). Property Development and Tort Tort laws provide for the avenues for justice to individuals harmed by the actions or negligence of other individuals, groups, or company (Horsey & Rackley, 2013). The construction industry may be liable to multiple issues due to negligence of individuals, such as the directors, managers, or employees. To prevent the company form this, the due purchase of the country house will be effectively monitored, with initiation of inspection and evaluation procedures by both the company and respective authorities. This will help in conducting a thorough risk management and control procedure for the control or elimination of potential threats, that is, before the start of the property development. Effective risk management strategies will be applied by the company through collective decision making by the board of directors. The condition of the house will be closely evaluated and safety measures implemented effectively to prevent or reduce any injuries during or after the property development. Effective risk management will ensure that the company does not incur any to expenses in the future due to tort liability. Environmental hazard will be evaluated and dealt with, such as the presence of asbestos and other harmful substances. The company will provide for effective protective gear for the employees during the renovation process (Horsey & Rackley, 2013). Security of Tenure The Landlord and Tenant Act 1954 regulate the rights and responsibilities of tenants and landlords who are in business property agreements, and provides that the tenant of the business property has a security of tenure until the end of the lease agreement. The tenant has a right to occupy the premises until the expiry of the lease agreement and also has the right to legally seek a new lease agreement. However, the leaseholder has the right to withdraw and regain possession of the property if they require it for further development and planning for own occupation of the property, or if the tenant has a history of delayed or lack of rent payment, or the violation of the lease covenants (Bernier, et al, 2014). References Bernier, H., Hollis, A., Johnson, R. & Michael, E. (2014), Litigating disputes over easements and restrictive covenants. Eau Claire: National Business Institute. Enever, N., Isaac, D. & Daley, M. (2014), The Valuation of Property Investments. Hoboken: Taylor and Francis. Gregory, J. (2014), Central counterparties: mandatory clearing and bilateral margin requirements for OTC derivatives. Chichester, West Sussex: Wiley. Horsey, K. & Rackley, E. (2013), Tort law. Oxford: Oxford University Press. Payne, J. (2014), Schemes of arrangement: theory, structure and operation. Cambridge: Cambridge University Press. Radosavljevic, M. & Bennett, J. (2012), Construction Management Strategies a Theory of Construction Management. Hoboken: John Wiley & Sons.  Read More