Ground rent speculators E&J Capital Partners were “compelled” to sell pensioner Trevor Nowell the freehold to his Taylor Wimpey leasehold house for £38,000.
Once Mr Nowell, 79, began the enfranchisement process, the valuation of the property’s freehold was decided by the professional advisors employed for both sides (which Mr Nowell ended up paying for, as is the case with statutory enfranchisement).
Pensioner paid £38,000 for Taylor Wimpey freehold to ground rent speculators E&J Capital Partners
As a result, Mr Nowell has ended up paying far more for the freehold to his house than would have been the case had Taylor Wimpey sold this asset to him directly.
Mr Nowell feels his case should be considered for the Taylor Wimpey redress scheme.
The issue was raised with Taylor Wimpey and E&J Capital Partners by LKP.
Taylor Wimpey has not chosen to respond at this point.
The full statement from E&J Capital Partners, which is headed by James Tuttiett, is below:
“We have looked into the case you raised relating to Mr Trevor Nowell.
“On 3rd September 2015 E&J received a notice from Mr Nowell’s legal advisers exercising his statutory rights to compulsorily acquire the freehold of his property. As required under current legislation E&J were then required to obtain a valuation for the freehold, an external valuer was appointed and following this the external valuer engaged with Mr Nowells chosen valuer and a price of £38,000 was agreed between them.
“The reason for the increase in the valuation of the freehold was in large part a reflection of the significant reduction in interest rates which had fallen to an all-time low. Throughout this process Mr Nowell was fully represented both legally and by way of his appointed valuer. Mr Nowell was under no obligation to purchase the freehold, even after understanding the valuation, E&J were compelled to sell to Mr Nowell by Mr Nowell.
“In addition to the freehold valuation, you state that Mr Nowell paid £4,000 in legal and other costs, it’s a requirement for any leaseholder who wishes to compulsorily purchase a freehold that they pay the costs of a lawyer and valuer to represent the freeholder. E&J’s costs relating to Mr Nowell’s request to purchase the freehold totalled £1,920 including VAT and comprised valuers costs of £780 and legal costs of £1,140. The cost of those appointed by Mr Nowell must have been higher than those of the E&J appointees.
“We trust the above is clear and also that E&J in no way planned a sale to Mr Nowell but rather were compelled.
“You will appreciate that we cannot comment on the actions of Taylor Wimpey in relation to this case and note you have contacted them directly.”
Related posts:
Pensioner paid £38,000 for Taylor Wimpey freehold to ground rent speculators E&J Capital Partners
Adriatic Land now wants £54,000 for my freehold that Taylor Wimpey said would cost £6,000
MailOnline forensically examines Taylor Wimpey couple stuck in leasehold house with £590pa to Adriatic Land
Telegraph reports case of Taylor Wimpey pensioner who has paid £38,000 for his freehold … and now won’t help him
Marie Rimmer MP: how can a modest Taylor Wimpey leasehold house in St Helens pay out £185,850 to freehold investors over 60 years?
What’s the probability that government leasehold statistics are still useless?
Bad law makes for inequity. The 1993 Act is as much to blame for the premium and fees. Did the freeholder publish their valuation that the leaseholder paid for?
Landlords are not obliged to counter notice with their valuation. They can argue any figure.
Reading cases determined at UT and the arbitrary one sided clauses in the Act, suggests determination to extract as much theologically derived profit as possible and leave scope for new excuses.
The 1993 Act came before online evidence. Does anybody check if these entirely theological valuations translate ever to actual market value?
Had our victim gone to tribunal there is no guarantee more blood would not have been squeezed.
The 1993 Act needs repealing and replacing. No more law written by landlords for landlords.
Erratum: Wrong Act! Obsessed with flats. I am sure the formula and process for buying the freehold of a house is perfectly balanced, open and above reproach, and all valuations must be published to the person paying all the bills before any agreement is reached as to a fair, real world price.
On the other hand, reading UT cases arguing a wide spread in valuations for the same property…
Having just read the house freehold process here…
https://www.lease-advice.org/advice-guide/leasehold-houses-valuation/
I am somewhat glad I own a flat. I love this… “The valuation process required by the law is complicated so it is often difficult to form a clear view of the price at the beginning of the process….”
Quite. Funny thing, when non leaseholders need a market valuation to sell property they call out three local estate agents. Bidders then knock about 5-10% off the asking price. Maybe every real world sale should have a process where the potential buyer pays for two professional valuations and both sides’ solicitors and throws in a statutory formula for good measure.
The difference with leasehold is nobody can prove the figures reflect reality. Just like theological proofs?
I feel compelled to comment – absolutely no comment.
Well, if David McArthur has passed on the commenting pipe…
This case has tickled my outrage. The facts are scant: a photo of what appears to be a detached house (?) and a street in Clitheroe and a purchase date of 2011. Sadly Google maps won’t let me prowl Oakley Drive, but it looks like a standard modern street? Why be it need be leasehold?
According to Rightmove, the following detached properties were sold in Oakley Drive in 2011:
Five freeholds between 250K and 404K
Ten leaseholds between 310K and 400K
Without being able to prowl the street I can’t work out the bedrooms etc, or if the five freeholds were older stock, or leaseholds who had bought their freehold before sale in 2011.
Either way, the price differential is interesting. How could it be in 21st century England that somebody can pay over £300,000 for a house and not have the freehold included? No, really?
Before the usual debate ensues, the average Joe should never assume that a law is equitable because it is law. Not that long ago folk could be hanged for almost anything…
http://www.dailymail.co.uk/news/article-1203828/The-222-Victorian-crimes-man-hanged.html
No reason to assume English land law is based on equity. The beauty of leasehold law is its clever entrapment of ‘owners’ as tenants.
English land ownership is feudal. A Law Commissioner for E&W as recently as 2000 felt compelled to ponder whether feudalism had a place in C21st land law, so who am I to argue feudalism does not apply.
Land law starts from the premise that the Crown holds ‘paramount lordship’. Not a good start if hoping for equitable treatment of the lower orders who insist on keeping coal in the bath. From there it is all down hill, reeking throughout of lords and their ‘mere’ tenants.
Modern leasehold ‘ownership’ is the logical result. Reforms have tinkered around the edges, but the lawmakers (of all political persuasion) have remained steadfastly infected with the feudal concept of lords and peasants.
If you rent, you expect the landlord owner to collect his rent, repair his property and otherwise leave you in peace. Not your gaff, after all.
Sobering to realise that as recent as the First World War, 90% of E&W occupation was private rental like this. Unfit possibly, but simple enough to understand the feudal order. Widescale residential leasehold ‘ownership’ was still a landlord’s dream. A grand idea: get tenants to pay full market price up front and thereafter pay not just ‘ground’ rent (snigger) but also pay for all repairs and ‘consents’ and hand back the building (suitably kept to good standard at their own expense) at the end of a mere 99 years. Meanwhile sit back and enjoy.
99 years is still rather long, to be fair, so build in an arbitrary trigger within 20 years whereby the ‘long’ lease devalues even faster and requires the leaseholder to pay again for the privilege of trying to protect their wasting ownership ‘investment’, bless them.
Ensure all the laws are loaded in favour of the landlord, who after all is the embodiment of British wholesomeness and must be allowed to make a profit. By the time the tenant wakes up to their sham home ‘ownership’, they are trapped. It is perfectly legal after all. So it must be equitable. With a captive ‘sucker’ trying to hold onto a home and protect its value, all costs can be calculated on a theological basis. Who’s to know better?
Have you read the process to calculate the freehold of a house? Allegedly: “Under both sets of rules the law requires the freeholder’s interest to be valued as if it were being sold in the open market by a willing seller to a willing purchaser” […] “a fair price based as closely as practicable on open market values”.
The only way to test this in the real world would be for the freeholder AND leaseholder to advertise the house as if already freehold and see what independent bids came in. I am sure it is not beyond the wit of law to come up with a form of temporary agreement to allow this. Many owners test the market this way. They do not have to sell.
Besides, how many houses do you see languishing on the market unsold for months and the price dropping in huge chunks every few months? Never happens to freeholders when dealing with their captive leaseholders?
But I guess using real market evidence would be too easy?
You can’t help sensing the influence in the law at the effrontery of a mere tenant forcing a poor landlord to sell a lucrative asset? “If it must be so, make it painfully so”?
You can’t blame the freeholders. They didn’t write this law. Or did they?
Paddy, A man’s (or woman’s) last testament is when he lets it all out, everything he has bottled up over a lifetime, he shouts out loud for the world to hear. I read recently that a particularly fiery character, known for being outspoken, instructed that his tombstone should bear the words “NO COMMENT”, and nothing else. “No comment” says more than a thousand words.
I actually composed a lengthy diatribe against E & J Capital and James Tuttiett, but as is the way of things with me, I got carried away, I thought it best not to comment, then I recalled the tombstone story and the words it bore.
You make reference to English land law and suggest that equity is not the principle behind it, that goes without saying. We are not that far removed from the 1930’s when the trespass of Kinder Scout occurred, which led to our right to roam – but not too far, Leasehold is the particular issue here however, reform is defeat and will allow the robber barons to prevail and continue. Government is inclined towards reform, and all the elements of the state are also inclined that way. The masses are suckers and the elite knows that.
May I translate this one?
Dear David,
I agree abolition is what we need and want.
As a property buyer is a consumer why don’t we have the right to gain our freehold like people in Scotland and Northern Ireland ?
Can a large group who represents consumers with the power to make super complaints like “Which” help leaseholders ?
Reform in the short term may be better than nothing, if it delivers a positive change in the mindset of those in the sector who are maintaining this highly unfair system. This change being to understand abolition will come.
Dear S, one thing for sure Katie’s petition is going nowhere slow. At 1751 hours yesterday 2635 had signed, at 0853 today the number had increased by 24 to 2659. There are over four million leasehold properties in England and Wales, everyone of the adults in those properties have reason to want an end to our leasehold laws. How can these people be mobilised?
I haven’t done an in depth study of leasehold and reforms over the years, but I do know there has been successive pieces of legislation addressing particular aspects of leasehold laws in that time. Abolition has never been on the cards. I make reference again to the trespass of Kinder Scout, until this trespass vast areas of our country was off limits to the majority of its citizens, the Kinder Scout trespass led eventually to our right to roam – something we take for granted now, but the leaders of the trespass were jailed.
Vast estates owned by the gentry and reserved for their kind and for grouse shooting was backed up by the law of the land. Every element of the state – government, judiciary, police force – conspired to restrict the movement of the common man, and withhold basic human rights. Leasehold laws are in the same context and relate precisely to our rights and the right to roam, they are feudal laws and have no place in 21st century England and Wales. Yet more reform of leasehold is a continuation of serfdom and leasehold will continue to be exploited. The delightful Roger Southam has said, “Leasehold itself is not evil, some of the practises therein are evil”. Dear Roger knows full well that he, and his kind, have to give ground for leasehold to continue. And knows full well there will remain sufficient opportunities after reform for him, and his kind, to continue to prosper at our expense. The only solution is abolition.
Chief Whip Here ( self appointed) A ‘Whizz Kid ‘in social media has recently ( yesterday) set up a facebbok ‘ page’ for the petiton, it is now on Twitter, and Katie is sharing the page with other related groups, online forums,local community groups et al.
Leaseholders who sign must share with their friends and family to build momentum. I hope that you David and orhers who subscribe to LKP are doing just that!
Lest we forget, The online consultation garnered 6,0000 Signs in 8 weeks. Katie’s petition is in its 2nd week and has nearly 3,000. Not terrific but not bad.
I suggested to my local fellow party members that this issue should be on the agenda at our meeting next week. They have asked me to “talk about the issue for a few minutes to bring everyone up to speed”.
They have also decided to invite a ‘ Housing Specialist’ to the meeting. I shall ensure nobody leaves without signing the petition!!
APATHY IS A CRIME.
6,000
Kim, if you hadn’t self appointed yourself Chief Whip, you would have been appointed. Well done that man.
I have not only been broadcasting the petition’s existence to all (two) of my friends and associates, I have made posters aware in forums of the Guardian and Daily Telegraph
I salute you comrade.!
Hello S McDonald
I recall you stating in a previous post that you subscribe to ‘Which’.Are you a member of the NLC? If not then I suggest that u join and request that Katie ( NLC Founder) shares the facebook petition ‘page’ with ‘Which’ and if you can think of any other organisation that will support the petition.
Hello Kim says,
I am not on Facebook and not able to join NLC but anyone who is could ask Katie the NLC Founder to share her Facebook petition page with Which.
Which can make super complaints and is one body the government has and will take notice of.
The unjustness of leasehold is unbelieveable in the 21st century, as the freeholder has all the advantages including not paying for any maintenance of their property. The leaseholder (the tenant) pays for that but yet doesnt own the property..
S McDonald I will do. In the meantime please share the petition with everyone you know via the link ;
https://goo.gl/QBtP4A
Spread the word- SILENCE IS A CRIME.
And yet we know abolition won’t happen. My guess is most leaseholders keep their heads down to avoid blighting their chance to sell. They are in a catch 22.
I decided to dig into why leasehold still exists – what with all the excuses that there is no alternative. This flies in the face of reason given the rest of the world.
I’m still reading, but so far it seems to me (no guarantee I have understood anything)…
Parliamentary reform of feudal land law was ruled out by the Real Property Commissioners in 1832 and it was left to the ‘courts of equity’ to determine how property law evolved. We aren’t talking universal suffrage, mind. Peasants knew their place.
Formulation of land law in the nineteenth century focused on the legitimacy of creating and handing down in freehold title repairing and other obligations, whether restrictive or positive. Seems it was the positive ones that made noble lords choke over their postprandial brandy, as these involved spending cash?
The common law rule that no one may be entitled to, or bound by, the terms of a contract to which he is not a party also vexed the legal minds when deliberating the correct relationship between property rights and contract obligations.
Should landowners be free to create any proprietary covenants they deemed advantage to them or their heirs, or was there an external controlling role in the public interest to keep land “unencumbered”?
This had nowt to do with ye commoners who owned no land. Those like my ancestors in the wee island on the left were turfed off their own land to keep things tidy. A common occurrence around the empire in those enlightened times.
By late C19th, the law had accepted that ‘Notice’ of obligations was all important, for if ‘an equity’ was attached to property, no one purchasing with notice of that equity could with conscience seek to stand in a better situation than the party from whom he purchased. This linked with concept of ‘unjust enrichment’. Otherwise the free market and the alienability of land was paramount.
(The absence of correct ‘Notice’ surely forms a large part of recent scandals? Can calling a leasehold tenancy a “flat or house for sale” ever be correct Notice? Is it okay to mislead commoners but not lords?)
It took until 1925 (matters of empire still focusing the minds of those in power) for any parliamentary reform to occur. Legislation in these islands is of course controlled by a House of Lords and the other place packed with commoner land owners, all financed by same. We aren’t talking a nation of instinctive democrats!
The Law of Property Act 1925 simplified things down to freehold and leasehold (in effect) but left the feudal lords to their familiar wealth creation. You can own whole counties in England!
Seems from then MPs mostly kept well out of it, and the courts continued to stress over protecting the feudal status quo. I imagine artisan folks were too preoccupied surviving, fighting and recovering from two world wars that they had no say in to notice.
Having set up a law Commission in the 60s, the government ignored each reform report that came along: Wilberforce, Scarman et al. A report in 1984 made recommendations for the reform of the law relating to positive and restrictive obligations and submitted a draft Bill for that purpose. Again nothing was done.
The point seems to be: all the angst over ‘land obligations’ gave leasehold a purpose. Leasehold was the solution for ‘burdening’ positive covenants on successors in title. In other words, avoid reform readily available as an excuse to keep a nice little feudal earner?
It is impossible in my opinion not to see some cynicism behind the Commonhold reform in 2002. I assume that by then government had to respond to the pressure of the body of evidence that ‘something had to be done’. The secret was to do something that could never actually work. The markets would not stand for change. This was the era of New Labour or Tory Lite. Everyone was either a wannabe landlord or a literal lord. They have so many Lords now they can’t pack them all in.
We’ve reached the point where despite seemingly endless reforms of leasehold ‘rights’, in practice leaseholders have few effective rights at all. Those they do receive in law are quickly diluted as soon as judges get their hands on them.
The courts claim leaseholders have a prosecuting power to protect them and the prosecuting power does not prosecute. There are no effective restrictions placed on anyone in the industry to curtail their greed and excesses.
It has reached a state where a landlord can bill for an advance estimate that is an overcharge and yet still get breach (with costs) for leaseholders failing to pay the overcharged estimate in full even after it becomes known it was an overcharge.
I’m not sure there is any other situation where a citizen can face legal costs and threat of forfeiture of their greatest asset for not paying an incorrect overcharged bill? Courts seem not to blush at these decisions.
Few of the official submissions to this current ‘consultation’ plea for abolition of leasehold. Any bad law can be repealed and corrected. There just has to be the will of those with power to do so.
As you say, tinkering reform merely legitimises the feudal backdrop that is making so many fortunes. Worse, I’ll bet a jam sandwich that once the fuss dies down over houses and the greedy doubling GRs, the system will quietly revert to type. That i think is the point of the government reforming ‘zeal’: sooth the horses.
It is no accident in my opinion we are where we are. I am a open minded social democratic, not a revolutionary.
Paddy, I am an admirer of Pol Pot and his philosophy of returning to the year zero (and simplicity) – not, I have to say, an admirer of his methods. It follows that an historical investigation of leasehold law and the machinations of our aristocracy, and their lawyers, to retain ownership of land, doesn’t turn me on. What have you against revolution? Revolution doesn’t always mean guillotines and falling heads. Are you a closet conservative, a closet Conservative even?
Leasehold is wrong and must be abolished, end of. Benny Rothman (one of the leaders of the trespass of Kinder Scout) had the conviction it was wrong that the workers of Manchester be permanently confined to the city when there were green fields and open spaces within easy reach. He and others took it upon themselves to exercise what they believed to be a natural human right to walk the land of their birth. They were arrested, all the forces of the state were against them, Benny and others were jailed. But Benny won the day eventually, we now have the right to roam. Be gone with you and your social democracy, revolution is needed.
That is a very informative post Paddy. Really you should be appointed special aide to the Housing Minister, if the tories are serious about solving the housing problem.
When they count homeownership the count leaseholders as ‘home owners’ if we go to the tribunal though suddenly we are ‘tenants’. Is there an inconsistency there?
I particularly object to the new ‘help to buy’ farce selling leasehold with tax payers money. Why not just have more social housing instead? At least the building finally reverts to the council rather than the mysterious freeholder investor.. Raise taxation? why not look into the investor freeholders dodgy tax evasion schemes? why not indeed…
some absolute gems from Paddys wonderful post above:
” Commonhold reform in 2002. I assume that by then government had to respond to the pressure of the body of evidence that ‘something had to be done’. The secret was to do something that could never actually work. The markets would not stand for change. This was the era of New Labour or Tory Lite. Everyone was either a wannabe landlord or a literal lord. They have so many Lords now they can’t pack them all in.”
” a citizen can face legal costs and threat of forfeiture of their greatest asset for not paying an incorrect overcharged bill? Courts seem not to blush at these decisions.”
I agree with you Fleecehold reform. Paddy is an absolute treasure chest .however Please sign ,share the petition if you have not already done so. We need action and signatures.
The link is- https://goo.gl/QBtP4 A
Please sign and share!!
https://goo.gl/QBt4A
Should offer a link to somebody who knows what they are talking about and whose concise wisdom I may above have garbled up with too much other reading…
http://www.landlordlawblog.co.uk/2011/07/01/foundations-of-landlord-and-tenant-law-index/
It does seem very odd that such a large Taylor Wimpey house would be leased rather than sold, when new; and even more odd that lawyers and estate agents generally proffer a LEASE as a ‘house SALE’ and get away with it, when in reality it is a highly-distorted rental.
From that point of view, I think Section 1 of the Law of Property Act 1925 causes mischief, i.e. declaring that a ‘Term of Years’ is an ‘Estate in Land’ as well as a freehold. Time that section was gone!
Looking at Paddy’s post:
Personally I think the word ‘feudal’, when applied to leasehold, hardly does justice to our god-fearing forebears. In the Age of Chivalry – and of the sword and public stocks – I wonder if people would have put up with swindlers and cheats in the way we have to now.
Front page of Daily Mail states ‘ WEALTHY EXPLOIT HELP TO BUY HOME SCHEME’.
Am I being a conspiracy theorist in thinking that there may be a little bit of the “Ole razzle dazzle’ going on and this Newspaper is attempting to malign ” FLEECEHOLD” Leasehold house purchasers??
There is something very odd that Taylor Wimpey sold ground rent investments where the initial rent is £250 doubling every 10 yrs for £8000 if the rent had doubled every 25 yrs then it would have sold for £6000.
If I had to guess these terms were instigated by regional personnel who may we’ll have arranged the sale of the freeholds to these hedge funds in return for a private commission
I cannot believe the main board sitting in London would have agreed to get an extra £2k per freeehold in return for imposing ground rents that have nearly toppled the business. The fact that these leases are prevelent in certain pockets of England supports this suspicion
This could bring relief to those who are timed barred on negligence claims – because of it could be shown that the company was acting ultra vires then it may enable a lessee saddled with this lease to go back more than 6 years