Survey on onerous ground rent data. Please fill this in if you have a leasehold house with exploitative ground rent terms
Two leasehold professionals with a track record of assisting leaseholders are willing to be consulted for advice by those caught up in the scandal of leasehold houses.
Louie Burns is the MD of Leasehold Solutions, which specialises in collective enfranchisement and lease extension issues. He has written for LKP on lease extensions here
He can be contacted here: louie@leaseholdsolutions.com
Mari Knowles, is a solicitor and managing partner of Leasehold Law, who has spoken at Westminster meetings organised by LKP and who is representing several leaseholders caught up in the doubling ground rent issues concerning Martin Paine. More here
Mari is happy to be consulted pro bono over the conveyancing of these properties – ie negligence claims against your solicitors – and buying the freehold.
To buy the freehold is going to involve both surveyors and lawyers. The key point here is for groups of leasehold house owners to form.
Mari can be contacted here: Mknowles@leasehold-law.com
For groups of leaseholders who have already formed, please first contact Louie Burns, and copy in LKP in the first communication: sok@leaseholdknowledge.com
Groups will be particularly relevant for the Taylor Wimpey leaseholders facing doubling ground rents, where the company has yet to conclude its “review” into the scandal.
We wish to ensure that this “review” is concluded favourably to the leaseholders.
Louie Burns says you should do this, after having read the basics on how to buy the freehold of your house from the LEASE website:
1/ Get fully informed about your lease, its ground rent terms and who the freeholder is. This may require spending £3 to research your title at the Land Registry, this will also give you the list of all the other leaseholders in your area with the same freeholder and the same issues you are facing.
2/ Arm yourself with this information and read how you have a right to extend the lease of your house by 50 years or buy the freehold https://www.lease-advice.org/advice-guide/houses-qualification-and-valuation/, generally speaking it cost the same whether you extend or buy the freehold so it’s better to buy the freehold so you can get rid of your freeholder completely.
3/ You then need to make contact with your neighbours or others who have the same leases and the same freeholder. You could arrange a meeting locally in a hall and put a not through the doors of your neighbours listed on the freehold title.
4/ You have far more power as a group when approaching the freeholder to buy the freehold.
5/ You can share costs. To get a valuation for a freehold under the 1967 Act is very complicated, but you can save money by doing this in bulk with several properties.
6/ You have far more muscle as a group to approach the freeholders to see whether they prepared to sell, or if not you will go down the formal route through tribunal
7/ This is not a job for the local solicitor who deals with divorces and personal injury. Leasehold is a specialist area of the law.
8/ You need to fix the fees and get them reduced because you have a group.
For example, you could approach a professional and ask how much it would cost in fees, how much it would cost to apply to Tribunal if it were necessary, what their fees would be if they attended tribunal on your behalf and would there be any other extras you should be aware of.
Once you have these figures, you now negotiate them lower as you are part of a group.
Once you have agreed the discount, insist that these fees should be fixed, and get it in writing.
This means you have agreed the price with the relevant professionals, without having a taxi meter running.
9/ Leaseholders should ignore the freeholders initial quotes for the freehold. They are just a try-on, and someone might be foolish enough to pay.
They also serve to stretch your expectations regarding the freehold’s supposed price. This is absolutely routine in leasehold negotiations, unfortunately.
10/ If you want to employ other professionals, then chose a service on the website of the Association of Leasehold Enfranchisement Practitioners (ALEP).
This is a complicated process and cheap isn’t necessarily good when carrying out a freehold acquisition.
Get the professionals to tell you what their previous experience is, ask questions about the detail of the work they have done.
Do they regularly work for leaseholders? Many companies specialise in working for freeholders.
You should not skimp on finding a specialist. Once you have settled on the valuer and solicitor insist that you require regular and detailed updates on how the process is going.
This may sound like a lot of effort, but it really will put you in charge of this process and it will give you the best chance of buying the freehold of your house the best and cheapest way you possibly can.
Related posts:
Last year: £64.8bn leasehold properties sold. £13.7bn was new-build. Leasehold house numbers double. Developers make £300-500 million a year from ground rent sales
MP urges Commons to condemn developers selling leasehold houses with onerous ground rents. And names Taylor Wimpey, Persimmon, Bellway and Adriatic Land …
First-time buyers facing £8,000 ground rents stuffed by plc housebuilders
BBC R4 You and Yours exposes Taylor Wimpey buyers facing doubled ground rents to £500 before 10 years have passed
Taylor Wimpey rejects responsibility to resale buyers facing doubling ground rents
Brighton council leaseholders win refunds for major works
Sounds brilliant,
How much are their fees?
Every surveyor I have spoke to is unable to give me a transparent figure for their fees, can Mari and Louis do this?
I have read a few comments on here about fees but never an article, LKP please help.
What should we expect to pay? I only own 1 flat but the lease is 70 years and I need it done.
Thanks in advance.
Kimberley.
Kimberley
I feel your frustration. Asking how much it be be to value your lease extension is a bit like asking how much it would cost to buy a car. It depends on the make, age etc.
The value of your flat, its lease length and who your freeholder is will be components a valuer will need to be able to give out a figure.
I would suggest if you arm yourself with your current lease length, ground rent and escalating terms and who your freeholder is (all available from your Leasehold Title at the Land Registry).
You could then phone three different valuers asking for a quotation. If you are prepared to haggle you should be able to get the best price. Ask for the quotation to be fixed and given to you in writing. There are two parts to a valuation, one to prepare the valuation report and one to negotiate with the freeholder on your behalf, it’s best to get both of these fixed up front. Many valuers prefer to quote an hourly rate and estimate the time it should take them but this leads to financial uncertainty for you.
This would be the very best way to get the best deal for yourself.
I hope that helps
Would you agree that in the vast majority of cases, a leasehold extension should only be for the statutory 90 year increase, and that leaseholders should be very wary of any freeholder offering a deal on anything but the 90 year extension, however tempting it may at first appear?.
Am I correct in believing that should a leaseholder enter into a negotiation to extend a lease by the non statutory route, they lose their rights and protections?
In most cases yes Michael, I’ve written a long article about informal lease extension and their dangers on this site.
Just wondering? Any thoughts on this?
If the terms of the lease are onerous with regard to the ground rent, this will clearly affect the value of the property. Could it the case that such is the reduction in the value of the property it would have a material bearing on the cost of extending the lease?
I suspect that the TW freeholds will have already been sold on to a third party.
If this is the case then according to Alec these freeholds can be purchased back from the third party at the same price they were sold at.
But this only applies if TW did not offer to sell them to their customers first.
It could get a bit complicated with customers being in several different situations.
If they are forming Groups, does this matter?
Michael
Alec is correct about this with leasehold flats, unfortunately the Right of First refusal does not apply to leasehold houses. Freeholders can sell them as they see fit.
The importance of leaseholders getting together to extend the lease or purchase the freehold was highlighted by a case in the tribunal involving one of the Tchenguiz Family Trust companies. The solicitor acting for the freeholder treated every case on an individual individual basis, despite it being a group action. The solicitor even charged 54 minutes for sending a letter and another 54 minutes for sending a 5 line email! The tribunal halved the final legal costs, saving each leaseholder over 1,000 pounds each.
There is a huge list of case law that forces freeholders to reduce their costs for group action, the Tribunal will find in favour of a group acting together.
So are we seeking redress against the Developer who sold the leasehold houses or the companies they sold the freehold on to.
Throughout the country there must be many thousands of disadvantaged purchasers, some of them the first time buyer but many to whom the houses have been sold onto for a second or even more times.
Can they all seek compensation?
In fact there could be so many victims as to compare it to a mini PPI scandal.
Is there no.one like the FSA (Financial Services Authority) to make judgement on this type of issue.
The case of leasehold houses is an illustration of everything that is wrong with the leasehold system.
Neither the developer nor the companies who have bought the freeholds have broken any laws. It is morally indefensible and clearly a sharp practice designed to make money for the developer from the leaseholder but not illegal.
That doesn’t mean the affected leaseholders have no redress however. Getting together as a group would be by far the best option. Getting legal advice to see if your could take mass action against the developer under the Unfair Contractual Terms act or the Consumer Protection act would be a start. You can possibly sue your conveyancing solicitor if they failed to clearly point out in writing the implications of the ground rent.
Also, make as much noise as possible in the press, blogs and with your MP. Attacking the brands of the developers is the best way to get their attention to act.
Us people that have houses with the doubling ground rents can we all not form one huge huge group , rather than forming various smaller groups all over the country,, As we all have the same issue after all ?
Linda, I am unsure , but believe that that you will have to group in relevance to the developer who sold on the freehold. . E.G. ‘TW’ group ‘Bellway ‘ group. Etc. The individual groups in the country could then liase if required. I have no idea if I am correct in my assumption other than it seems logical.
Kim
Linda is correct, the Tribunal will only hear cases involving the same freeholder etc but being part of a big group is very beneficial (see my comment above)
Someone who uses the site and is IT literate could set up some simple platform that all affected leaseholders can together and get a much louder voice.
Would it not be simpler for some powerful individual or organisation to take this on for all the affected leaseholders whichever company they purchased their property from.
Having established a right (legal or moral) for compensation or recompense it can be heavily publicised and left for those affected to apply for it.
Similar to the PPI situation.
Doing it in a piecemeal fashion is going to cost a fortune, and many potential victims will be overlooked.
What needs to happen is a powerful individual or an organisation needs to take charge of forming such groups as Micheal suggests . Even if we have to form groups per developer who sold on the freeholds . Each group would still be enormous and would carry enormous weight . Who could we get to organise such an army ?
Linda, this idea probably sounds quite mad, but I suggest that it might be an Idea to contact ‘Private Eye’. I do not propose that they can “organise an army”however the ‘great,good and powerful’ do read the magazine and if your story is featured they might be minded to organise the rebellion! It’s worth a try ????
Michael Holland’s proposal to form groups is excellent and should be taken forward. Such groups, whether taken together or separately, can still be gathered under one single umbrella “powerful individual or organisation”. Such a group should embrace the full gambit of leasehold scamming and fraud, including Leasehold Houses and the Ground Rent portfolio sale of Freeholds whether Newly built or Old (70/80/90s) with the latter involving as appropriate the criminal breach of right of first refusal
I believe LKP/Campaign against retirement leasehold exploitation can fit this b ill!
There should now a Facebook group. National leasehold. Campaign. For everyone that has and issue It’s a new group , 24hrs old in fact but it is growing Get joining people
Is there any chance of including Leasehold Retirement Complexes in this campaign.
Although their ground rents don’t escalate some are extremely high, can be up to £500 plus per annum. With no service provided to substantiate it.
It has always been difficult to get the elderly started with a campaign of this type.
They might be encouraged to join into this one
Michael it’s a campaign against every leasehold issue Encourage all that is suffering to join. The more the better
Yes Michael:
Such a campaign must be comprehensive and address all aspects of Leasehold abuse and include Leasehold Retirement Complexes.
LKP/Campaign against retirement leasehold exploitation, has led the way in this exceptionally well to date and I am sure can broaden its reach through wider use of available IT.
Well in that case Alec, how about the including the Peverel Price Fixing fraud.
Occurred many years ago, but it has never been satisfactorily resolved.
Both ARMA and ARHM washed their hands of it and the leaseholders have never had the confidence to take the issue forward.
I have just read on the National Leasehold Campaign website, an article by Michael Epstein. It would be well worth publishing it on here.
It gives advice on how the unfortunate leaseholders can tackle the problem and the pitfalls which they will encounter. It sounds like extremely hard work but a battle that could be won in the long run. And it will also end with the reputation of these Developers being.reduced to zero.
The alternative would be for the Government to get stuck into it right now.
Call these developers in and demand that they fix it right now.
The ground rents need to be capped at the initial lowest figure and the cost of either buying the freehold or extending it based on that lowest ground rent figure.
It should bring the cost down to the £5000 max mark which some Developers originally quoted. .If the freeholds have already been sold on then the Developers should pay any extra it requires to buy them back.
So come on Housing Minister, TW , Persimmons, Bellway and the rest, get it sorted now. Save these unfortunate customers months/years of anguish and at the same time restore some faith in this industry.
Remember it’s “Help to Buy” for young families not “Help yourself” for Developers.
Thank you Michael,
Perhaps the Government could also think about bringing in legislation that all freeholding companies must be registered in the UK for tax purposes? They might also turn their attention to the law of Unfair Contract? On the presumption that selling a house on a leasehold basis is lawful, they could bring in legislation to the effect that any lease that does not reflect RPI for ground rent valuation purposes and has a doubling every 10 years clause would be subject to a 100% tax on the difference between the RPI index and the income generated from the doubling factor?
Yes that is an excellent point. How is it even possible that freeholder companies are registered off shore? The managing agent company is also registered off shore! If you are managing U.K. Properties why is this allowed as a tax loop? Democracy in action here…