Canada: Financing Leasehold Interests: How To Manage The Risks

This article discusses, from a lender's perspective, some of the more effective methods of reducing risks in structuring a leasehold financing program, including a combination of careful underwriting analysis and the inclusion in the leasehold mortgage of specific mortgagee protections unique to leasehold mortgage financing.

The explosive growth in commercial and residential real estate mortgage lending in the United States is due to several factors, including lower interest rates and the growth of secondary markets for the trading of securities derived from such mortgages, which has enormously increased the liquidity available to mortgage lenders. While real estate lenders have traditionally made loans secured by fee interests in real property, where the borrower owns the real property outright, lenders are increasingly being asked to underwrite loans to property owners who own leasehold rather than fee interests in real property.

This article deals principally with leasehold mortgage financing in today's lending market and specifically with the risks that mortgage lenders typically face when making loans secured by mortgages encumbering leaseholds rather than fee interests in real property. This article also discusses, from a lender's perspective, some of the more effective methods of reducing risks in structuring a leasehold financing program. Such methods include a combination of careful underwriting analysis and the inclusion in the leasehold mortgage of specific mortgagee protections unique to leasehold mortgage financing.

The methods and guidelines set forth in this article, it is hoped, will permit lenders to better manage the risks inherent in financing leasehold interests and to successfully structure commercially sound leasehold mortgage lending programs to meet the investment criteria in today's secondary mortgage market. These guidelines should also help rating agencies evaluate leasehold mortgages that are destined to be sold in the secondary markets as part of mortgage pools securing mortgage-backed securities.

As ground and other long-term leases have for various reasons become more common means of ‘‘owning’’ real estate, lenders, including institutional lenders, are increasingly being asked to consider financing these leasehold interests. Although technically mortgages can encumber a leasehold interest of any duration, because of lending policies and underwriting criteria common to most commercial mortgage lenders and rating agency requirements, leases whose unexpired terms are less than 20 years are generally not considered suitable for mortgage financing. A typical leasehold mortgage would encumber a long term (generally over 49 years) ground lease, pursuant to which the lessee/mortgagor would be required to pay real estate taxes and all other property expenses in addition to the rent due under the lease. The proceeds of the mortgage would typically be used by the lessee/mortgagor to either build or renovate an income-producing property, such as multi-family housing, an office building or shopping mall, on the site.

A mortgage secured only by a leasehold interest in real property, as opposed to a fee interest, is inherently riskier for the mortgage holder than a mortgage secured by a fee simple interest. These risks arise from the nature of a leasehold being (i) legally subordinate to the fee interest and (ii) subject to the terms of the lease creating such leasehold interest. As a result, the mortgage holder whose security is a leasehold interest in real property is also subject to the interests of the fee owner and to compliance by the lessee/mortgagor with the terms of its lease. In fact, since the lessee/mortgagor is subordinate not only to the fee interest but also to all liens and claims that encumber such fee interest, including fee mortgages, the mortgage holder is also subordinate to such liens and claims.

The risks associated with leasehold mortgage financing have been recognized by the rating agencies which have established specific criteria for the analysis of leasehold mortgages that are now commonly part of commercial mortgage-backed securities. For example Moody's Investors Service considers the obligations inherent in a ground lease as an additional liability of the lessee/mortgagor, similar to additional property secured financing which would have priority over the leasehold mortgage. In Moody's view, a ground lease creates a form of synthetic debt that increases the financial leverage of a transaction and can effectively turn a first leasehold mortgage loan into a subordinate financing position. As such the existence of the ground lease liabilities (primarily ongoing rent obligations) would have a credit impact on the proposed financing equivalent to the credit impact of superior mortgage financing.¹

The five primary risks to the holder of a leasehold mortgage are the following:

• Defaults by the lessee/mortgagor under the lease creating the leasehold interest. Such a default may result in the termination of the lease, which would terminate the leasehold interest and thus effectively eliminate the lender's security (the leasehold mortgage) for the loan.
• Interests that are superior to the leasehold interest. Because a leasehold mortgage encumbers an interest in real property that is subordinate to the fee interest in that real property, the mortgage is subject not only to the potentially competing interests of the property owner, but also to interests held by third parties, such as mortgages or other liens (e.g., mechanic's liens) that encumber the property owner's fee interest and which are superior and potentially adverse to the interests of the mortgage holder. A default by the fee owner under any of these competing interests and the enforcement or foreclosure of those interests by the holders thereof may also result in the termination or impairment of the leasehold.
• The lender in any foreclosure action will remain subject to the lease. If the lessee/mortgagor were to default under the leasehold mortgage, and if the mortgage holder were to foreclose the mortgage, the mortgage holder, or its designee, would not become the owner in fee simple of the encumbered property, but would become the tenant under the lease formerly encumbered by the leasehold mortgage and would automatically become subject to all of the terms and covenants contained therein. In addition, the mortgage holder may also become liable to cure any prior lease defaults by the lessee/mortgagor as the previous tenant under the lease.
• Increased credit risk. The holder of a mortgage on a leasehold is subject not only to the bankruptcy or insolvency of the lessee/mortgagor, but also to any financial reverses affecting the fee owner, whose bankruptcy or insolvency could potentially impair the lessee/mortgagor's leasehold interest and the mortgage holder's security. This risk is increased if the fee interest were itself subject to financing liens. In view of this, it is important that a lender contemplating making a leasehold mortgage underwrite the credit of the fee owner in addition to that of the lessee/ mortgagor.
• Reduced Control Over Insurance Proceeds and Condemnation Awards. The holder of a mortgage encumbering a fee interest in a property, following the occurrence of a casualty or condemnation, is generally in control of insurance proceeds and condemnation awards. However, since a leasehold mortgage holder is subject to the terms of the lease, the mortgage holder's ability to control insurance proceeds and condemnation awards would be subject to the competing claims of the fee owner and its mortgagee.

Each of these risks to the holder of a leasehold mortgage may be mitigated or eliminated by a prudent lender. The following is a brief description of the methodologies that may be considered in negotiating a leasehold mortgage:

Subordinating the fee: The most effective way to reduce the risks associated with leasehold financing is to have the fee owner execute the leasehold mortgage together with the lessee/mortgagor, and have the fee owner agree to have its the fee interest in the property also subject to the mortgage. This is generally referred to as ‘‘subordinating the fee’’ to the leasehold mortgage. To maintain this subordination the fee owner should also execute all modifications, replacements, spreaders, and other amendments to the mortgage. The fee owner would typically agree to subordinate its interest to a leasehold mortgage if the proceeds of the leasehold financing are used by the lessee/mortgagor to construct or renovate a building on the property or otherwise substantially improve the property. In this case if the lessee/mortgagor were to default under the leasehold mortgage and if the fee owner declined or were unable to cure the default, the fee interest would be subject to foreclosure together with the leasehold interest. The foreclosing mortgagee would then have the option of eliminating the leasehold estate entirely, becoming (or its designee becoming) the fee owner of the property, or retaining both the leasehold and fee estates as distinct entities, unless under applicable state law there is an automatic merger of estates. On the other hand, if the fee owner were to terminate the lease following a default by the lessee/ mortgagor thereunder, the fee interest would remain subject to the leasehold mortgage. Additionally, if the fee owner subordinates its interest to the leasehold mortgage and if a casualty or condemnation were to occur, the disposition of insurance proceeds and condemnation awards would be governed by the terms of the mortgage. However, it is not common for property owners to agree to subordinate their fee interests in this manner as it puts the owner's interest in the property at risk and would make it difficult for the fee owner to obtain commercially reasonable mortgage financing.

Protecting the leasehold mortgage holder without subordinating the fee: If the fee owner will not agree to subordinate its interest in its property to the leasehold mortgage, a lender may reduce its risks by requiring that any lease which is the security for its leasehold mortgage include the following provisions:

1. Lease Term: The lease to be encumbered should have a remaining term (not including options to extend or renew the term, unless they are exercisable at tenant's sole option at a specified rent) of at least twenty years beyond the scheduled maturity date of the leasehold mortgage. A significantly shorter term would make it difficult for the lessee/ mortgagor, or a successor, to sell or refinance its leasehold interest on the maturity of the leasehold mortgage. There should be no right on the part of either the landlord or the lessee/mortgagor to terminate or cancel the lease term prior to its scheduled expiration date (or any such cancellation or termination should not be binding on the holder of the leasehold mortgage), except by landlord following tenant's uncured default.
2. Memorandum of Lease: A memorandum of the lease should be recorded in the public land records of the jurisdiction in which the property is located. The memorandum should specify, at a minimum, the lease term and the number and duration of extension or renewal option terms; any other rights or options, such as purchase option, available to tenant; cure and other rights available to the holder of a leasehold mortgage and provisions relating to the subordination of fee mortgages. The effect of this recordation is to make the lease superior to most liens which may subsequently encumber the property.
3. Rent: The dollar amount of the rent payable under the lease for the entire lease term should be specified, or should increase by a specified or ‘‘capped’’ amount or percentage, so that actual rent amounts can be used in underwriting the loan. Rent increases linked to the consumer price index are impossible to estimate over the long term, and would make it more difficult to underwrite the loan, unless such increases are ‘‘capped.’’ Rent increases based on ‘‘market’’ are impossible to estimate and any portion of the lease term for which the rent is to set or reset at market rates should not be considered part of the base term. In order to further reduce the risk of a rent default leading to a termination of the lease, a leasehold mortgage holder may consider requiring a lessee/mortgagor to make monthly escrow deposits covering anticipated rent and additional rent, including real estate taxes, due under the lease.
4. Other Charges: Most long-term leases are ‘‘net leases’’ under which the lessee/mortgagor pays all of the expenses relating to the operation of the property, such as taxes, maintenance of (and repairs to) the buildings and other improvements located on the property and the installation and provision of electricity, gas, HVAC and other utility services. The lessee/mortgagor should not be required to pay any costs not directly related to the operation of the leasehold property, such as the debt service on any fee mortgage or other liens encumbering the fee interest in the property, or any transfer, income or capital gains taxes or mortgage charges related to the sale, transfer or financing of the property owner's fee interest.
5. Landlord's Interest: The landlord under the lease must be the fee owner of the property, and not itself a tenant under a prior leases to which the lease to be encumbered by the leasehold mortgage would also be subordinate.
6. Right to Mortgage: The lessee/mortgagor must have a broad right to mortgage its leasehold interest without the consent of the holder of the fee interest. Lessee/mortgagor's right to mortgage its leasehold interest should be conditioned only on there being no uncured monetary or substantial non-monetary default by lessee/mortgagor, unless such default will be cured simultaneously with the closing of the loan.
7. Opportunity to Cure: The holder of the fee interest must be obligated to give the leasehold mortgage holder notice of lessee/mortgagor's defaults under the lease, and a reasonable opportunity, at its election, to cure such defaults, which would preferably be in addition to the cure periods available to the lessee/mortgagor, as a condition to the fee owner's right to exercise any remedies under the lease, including termination. Any cure period available to the leasehold mortgage holder must be ‘‘tolled’’ during the period it is foreclosing on the lessee/ mortgagor or otherwise attempting to gain title to, and/or control of, the leasehold estate.
8. New Lease: In the event the lease is terminated for any reason, whether as a result of lessee/ mortgagor's default, rejection or disafirmance of the lease in a bankruptcy filing by lessee/mortgagor or the fee owner, or the failure of the lessee/ mortgagor to exercise a renewal or extension option, the fee owner should be required to offer the leasehold mortgage holder a new lease on the same terms and conditions as the terminated lease for the balance of the lease term, with the same extension or renewal terms available. The leasehold mortgage holder should have a minimum period (e.g., 60 days) in which to execute a new lease, during which time the fee owner cannot enter into any new lease or leases for the premises. The fee owner should also agree that if it were to sell the property during this period, the contract of sale must provide that such sale is subject to the leasehold mortgage holder's right to enter into the offered lease.
9. Fee Owner Bankruptcy Issues: The leasehold mortgage should provide that in the event of the fee owner's bankruptcy, the lessee/mortgagor is prohibited from acquiescing in a rejection or disafirmance of the lease by the fee owner or its trustee in bankruptcy under Section 365(h) of the Bankruptcy Code. The lessee/mortgagor must also agree to timely object to any attempt by the fee owner's bankruptcy trustee to sell the property free and clear of the lease under Section 363(f) of the Code.
10. Estoppel Certificate: The fee owner should agree, at the request of the leasehold mortgage holder, to give a certificate to the holder in which the fee owner certifies as to the status of the lease and the performance by lessee/mortgagor of its obligations thereunder, including rent payments. Receipt of a certificate annexing a complete copy of the lease as an exhibit, specifying the remaining term of the lease (including all options to extend or renew the term), and certifying that the lease is in full force and effect, that there are no defaults thereunder and that all rental payments are current, should be a condition of the leasehold mortgage holder's obligation to fund the loan. This will help ensure that are no ‘‘surprises’’ in store for the lender, since the fee owner will be effectively estopped from asserting any default under the lease with respect to the period prior to the date of the certificate.
11. Assignment and Subletting: The lease should give the lessee/mortgagor broad rights to assign or sublet at any time during the term without the fee owner's consent or the fee owner's right to ‘‘recapture’’ the premises, and without any participation by fee owner in the assignment consideration or sublease rents. Lessee/mortgagor's right to assign or sublet should be conditioned only on there being no uncured monetary or substantial non-monetary default. If the fee owner will not agree to this, the lease should at least give the leasehold mortgage holder, or its designee, and their respective successors and assigns, broad assignment and sublet rights if they should succeed to the lessee/mortgagor's interest in the lease. The lease should provide that all (i) subleases must be subordinate to any leasehold mortgage, and to all extensions, renewals, modifications and amendments thereto, and to all replacements thereof, and to all advances thereunder, (ii) subleases prohibit the prepayment of rent for more than one month in advance, or that any such payment not be binding on the leasehold mortgage holder, or its designee, as successor sublandlord, or to any successor landlord whose interest derives from the foreclosure of the leasehold mortgage or the exercise of any remedies thereunder following default by lessee/mortgagor, (iii) subtenants under each sublease agree to attorney to the leasehold mortgage holder, or its designee, or to any successor landlord whose interest derives from the foreclosure of the leasehold mortgage or the exercise of any remedies thereunder following default by lessee/mortgagor, and (iv) subtenants under each sublease agree that the leasehold mortgage holder, or its designee, as successor sublandlord, not be liable for any prior landlord defaults and not be required to perform any work at the premises.
12. Fee Mortgages: If there are any mortgages or other liens encumbering the fee estate, they must be subordinated to the lease and to all extensions, renewals, modifications and amendments thereto, and to all replacements thereof, including any new or replacement lease which may be given to the holder of the leasehold mortgage. The holder of the fee mortgage should execute a subordination agreement in favor of the leasehold mortgage holder and its successors and assigns, which should be recorded contemporaneously with the leasehold mortgage. The lease must not provide that it is subordinate to future fee mortgages. It is preferable (although not strictly necessary) for the lease to explicitly provide that any future fee mortgages will be subordinate to the lease and to all extensions, renewals, modifications and amendments thereto, and to all replacements thereof.
13. Lease Modifications: The lease should provide that any modification, amendment to, or voluntary termination of, the lease requires the consent of the leasehold mortgage holder, and no such modification, amendment or termination should be deemed effective or binding on the leasehold mortgage holder, or on its designee, or any successor landlord whose interest derives from the leasehold mortgage holder, without its prior written consent.
14. Limitation of Leasehold Mortgage Holder's Liability: The lease should provide that no principals, employees, members, officers, directors, partners, shareholders, etc., of lessee/mortgagor shall have any liability under the lease. If this is not possible, the lease should provide this limitation of liability to the leasehold mortgage holder, or to its designee, and to any successor landlord whose interest derives from the foreclosure of the leasehold mortgage or the exercise of any remedies thereunder following default by lessee/mortgagor. The lease should also provide that the leasehold mortgage holder or its designee or any such successor landlord shall (i) not become liable for the obligations of the lessee/ mortgagor under the lease unless and until it becomes the successor tenant (by foreclosure of the leasehold mortgage or by lessee/mortgagor delivering an assignment of its interest in the lease) and has control and possession of the premises, (ii) no longer be liable for the obligations of the lessee/ mortgagor under the lease from and after the date it shall assign its interest as tenant under the lease, and (iii) not be liable to perform any work at the premises other than routine maintenance.
15. Benefits Accruing to Institutional Lenders Only: Certain leases may limit the benefits available to leasehold mortgage holders to those holders that meet certain specified criteria which would customarily be associated with ‘‘institutional’’ lenders. These limitations are potentially problematic because even if the initial leasehold mortgage holder meets these criteria, or the lease is modified to make these benefits explicitly available to the initial leasehold mortgage holder, both the lessee/ mortgagor's ability to refinance and the leasehold mortgage holder's ability to sell its mortgage will be limited by such a provision.
16. Notices: The lease should provide that copies of all notices from the fee owner to lessee/mortgagor, including, in particular, default notices and notices relating to extension, renewal, purchase and other options, be sent simultaneously to the leasehold mortgage holder, and that such notices shall not be deemed effective unless such copies have been sent and deemed received.
17. Insurance Proceeds: Both the lease and the leasehold mortgage should provide that the leasehold mortgage holder and its successors and assigns be named as loss payees under the casualty insurance policies covering the buildings and other improvements on the premises. The leasehold mortgage holder should have the right to approve any settlement with the casualty insurer. Insurance proceeds should be paid to the holder to be applied, at its discretion, either towards amounts due under the leasehold mortgage or towards restoration of the buildings and improvements. Any proceeds that remain after completion of restoration should be paid to the holder of the leasehold mortgage to be applied towards its unpaid indebtedness. In no event should either the fee owner or the lessee/mortgagor have any right to terminate the lease in the event of a casualty. If this is not possible, the right of termination should be conditioned on payment to the leasehold mortgage holder of sufficient funds to satisfy the entire indebtedness due under the leasehold mortgage.

If the lease itself does not include all of these provisions, the fee owner, leasehold mortgage holder and lessee/mortgagor should enter into a separate agreement, often referred to as a subordination, nondisturbance agreement, and attornment agreement (‘‘SNDA’’) which would include these provisions.

If the fee owner refuses to subordinate its fee interest in the property to the leasehold mortgage, the lease should be carefully reviewed to determine how it deals with insurance proceeds and condemnation awards since those provisions will have priority over any provisions to the contrary contained in the leasehold mortgage. The following are some of the issues that a leasehold mortgage holder should consider in reviewing a lease being offered as security for its leasehold mortgage:

Application of insurance proceeds and condemnation awards to the leasehold mortgage indebtedness: The preferred approach from the leasehold mortgage holder's standpoint is to have the lease provide that as long as the mortgage remains outstanding all insurance proceeds and condemnation awards should be paid to the leasehold mortgage holder for application, at its option, to amounts due under the leasehold mortgage.

Application of insurance proceeds and condemnation awards to restoration: If the lease requires that insurance proceeds and condemnation awards be applied first to restoration of the buildings on the premises before they can be applied to the leasehold indebtedness, all of such amounts should be payable to the leasehold mortgage holder for disbursement as restoration progresses, with any amounts remaining after completion of restoration being available for application to the leasehold indebtedness. Disbursement of proceeds and awards to restoration should be subject to customary conditions for disbursement of construction proceeds, including leasehold mortgage holder's approval of the plans and specifications for the restoration, all permits being in full force and effect, no intervening mechanics' liens, and undisbursed amounts being sufficient for completion of the restoration.

Additional conditions to application of insurance proceeds and condemnation awards to restoration: If the lease requires that insurance proceeds and condemnation awards be applied to restoration, it must specify conditions to such application. These conditions generally include the following:

1. neither the lease nor the leasehold mortgage is in default;
2. the casualty is not considered ‘‘major’’ (expressed either as a specific amount necessary to restore the property or as a percentage of the property's value or poor area);
3. the anticipated proceeds or awards are sufficient to restore the property and pay operating expenses relating to the property, including debt service on the mortgage, through the date that it is anticipated that the project will generate adequate cash flow (or if they are not sufficient the lessee/mortgagor will deposit any shortfall with the fee owner, independent trustee or the leasehold mortgage holder);
4. the restoration to the former use or to another economically viable use is legally, physically and economically viable; and
5. the restoration can be completed within a specified prior to the end of the term of the lease.

If any of these conditions are not met, or if the fee owner and lessee/mortgagor elect not to restore the buildings, the lease should give the leasehold mortgage holder the right to apply the proceeds and awards to its indebtedness. The lease should preferably give the leasehold mortgage holder the right to determine whether these restoration conditions have been met. If this is not the case these conditions should be sufficiently clear that it will be relatively straightforward to determine whether they have been met. Any dispute between the leasehold mortgage holder and the fee owner regarding whether these conditions have been met should be subject to arbitration or other resolution by an independent expert.

Disbursement Agent: With respect to how the proceeds and awards are held pending disbursement, and regardless of how such funds are ultimately applied, the lease should designate the leasehold mortgage holder as the party who will hold such funds on behalf of itself, the fee owner and the lessee/mortgagor pending disbursement. If the fee owner will not agree to this arrangement the awards and proceeds should be paid to an independent trustee pending disbursement. Both the leasehold mortgage holder and the lessee/ mortgagor should resist having any insurance proceeds or condemnation awards paid to the fee owner.

If the lease does not specifically provide for an acceptable arrangement regarding insurance proceeds or condemnation awards, either the lease should be amended or the fee owner should enter into an SNDA with the leasehold mortgage holder pursuant to which the fee owner would agree to an arrangement regarding the insurance proceeds and condemnation awards that is acceptable to the leasehold mortgage holder. Under no circumstances should the holder of any fee mortgage have any rights to insurance proceeds or condemnation awards.

Leases Between Independent Parties: The strength of a leasehold mortgage holder's negotiating position when it is asked to finance a lease will, to some extent, depend on why the lease was created in the first instance. If the leasehold and fee interests have historically been in separate and unrelated ownerships, as is often the case for properties held by large institutional owners who often prefer to be passive investors, such as universities, religious corporations and family trusts, and the lessee/mortgagor acquired a pre-existing leasehold interest, the lessee/mortgagor may have little control over the fee owner and the fee owner has little incentive to accommodate either the lessee/mortgagor or the leasehold mortgage holder. In this case the fee owner has an economic interest in the project which is distinct from that of the lessee/mortgagor, and the leasehold mortgage holder may not be able to achieve all of its goals in structuring its leasehold financing arrangement. However, even in this situation the leasehold mortgage holder should insist on being given notices of default under the lease and an opportunity to cure such defaults. In addition, insurance proceeds and condemnation awards should be applied to restoration, if restoration is feasible, and if not, they should be applied first towards the leasehold mortgage indebtedness before being paid to either the fee owner or the lessee/mortgagor.

Leases Between Related Parties: Occasionally a lender will be asked to accommodate a property owner who owns fee title to the property it intends to finance and who wishes to bifurcate its interest in the property by creating a leasehold interest in the property with an affiliated entity. This may be done for estate-planning or tax reasons, or simply to protect the owner's long term interest in the property from the risks of a failed real estate project. In this situation, the security that is offered to the lender is a mortgage only on the leasehold interest that is being created. In cases such as these, or whenever the fee and leasehold estates in a property are owned by affiliated entities, the lender should insist on having the fee owner subordinate its interest in the property to the mortgage since the fee owner is related to the lessee/mortgagor. If the fee owner refuses to subordinate its fee interest to the mortgage, the leasehold mortgage holder should insist on the protections outlined earlier in this article. Additionally the fee owner should have no control of insurance proceeds and condemnation awards since it does not have an economic interest in the property that is independent of the interest of the lessee/mortgagor.

Fee Mortgages: If the leasehold and fee interests have historically been in separate and unrelated ownerships, and the lessee/mortgagor acquired the tenant's interest in a pre-existing long term lease which is subject to a pre-existing fee mortgage held by an entity unaffiliated with either the fee owner or the lessee/ mortgagor, the leasehold mortgage holder could agree to have its mortgage subordinated to the fee mortgage provided that the fee mortgage not exceed a specified dollar amount and not be amended or modified without the leasehold mortgage holder's consent. These restrictions should be included in the lease itself and also in the memorandum of lease that will be recorded. In addition, the holder of the fee mortgage should agree to ‘‘standstill’’ provisions pursuant to which it agrees not to foreclose its mortgage while the leasehold mortgage holder is pursuing its remedies under its mortgage or is attempting to cure defaults under the lease.

The creation of long-term leasehold estates in real property effectively increases an owner's and developer's financial leverage when developing its real property assets. In addition, the creation of these interests increases the range of development opportunities and investment vehicles available to real estate investors. But as we have seen, this additional leverage and the additional investment opportunities come with increased financial and legal risks, both to the owner/ developer and to the mortgage lender. Using the analytical tools described in this article, and incorporating the protective provisions suggested into loan documentation, will help to manage these risks to enable real estate projects which include such leasehold interests to move forward expeditiously.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.