Leasehold to Fleecehold

Many leasehold house owners looking to buy their freehold are finding that they will still have leasehold like restrictive covenants and have to pay an estate maintenance charge. They are beginning to understand that their only advantage will be getting rid of the ground rent- although in many cases that is a huge one!

On private estates home owners pay to maintain land which was formerly adopted by councils, but is now retained in private hands. They usually have no say over how costs are incurred, and there is no alternative dispute resolution. If they don’t pay the rent charge, then a statutory lease can be taken out on their “freehold” property.  To sell houses as freehold with these conditions certainly could be considered as misrepresentation #fleecehold.

This will be the next big scam to be exposed following the leasehold doubling ground rent scandal. In the interest of shareholder value the big commercial house builders have gone too far in their pursuit of profit.

The government seems to be woefully ignorant of the issues – who can say if it is “head in the sand” or the effects of lobbying with misinformation?

HorNet members have had letters via their MPs from ministers suggesting they think the residents manage their estates, and whilst this is the case in a minority of situations, it is not the norm. We are referred to the courts for dispute management in the knowledge that few will have the financial resources or sheer courage and determination to do this. In any event it is a pretty useless suggestion when there is no cap on what the companies can recover through the service charge for legal expenses.

Even the governments consultation suggests that they have no idea that this model is so widespread and seem to think it only happens on estates with mixed tenure.

We need to take the opportunity presented by the consultation to inform government of the nature and extent of the issues and their impact on ordinary home owners. More information on the consultation appears in this post

If you haven’t done it yet – please do, time is limited and the September deadline will be here before we know it.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.