Category: The Buzz

We think this diagram broadly represents the relationships  between different tenures and charges on new build managed estates.

It is easy to see how central to the whole system estate charges are. Permission fees are common, but not always present.

The diagram graphically illustrates how residents with the least resources (in leasehold flats) end up having to pay more in terms of running costs. A bit like that cheap ink jet printer where the ink costs almost as much as the device. How much has Help to Buy contributed to this exploitative situation?

Leasehold houses on these developments may not be simply about lucrative deals selling on the freeholds and high and doubling ground rent, it is also easier to retain control over the estate, particularly when a property is sold on. The obligation to pay estate and permission charges automatically is transferred to the new owner, this does not happen with positive covenants for freehold houses, so less reliable conveyancing devices are used, like estate rent charges, or a chain of covenants.

“Leasehold to fleecehold” It is also clear to see how, if a leasehold house owner buys their “freehold”, they remain in the fleecehold trap. Many leaseholders are reporting this via our friends at the National Leasehold Campaign.

 

 

 

Great news of a successful case in the Dundee Sheriff’s court (same as small claims in rest of UK) – the Sheriff found an illegal monopoly and was able to strike out the burdens because under Scottish Law you cannot create a monopoly in the title deeds.  You might say how does this help everyone else?  Well…

The most common feature of the way the private estate model is being implemented is that home owners have no choice of provider. They are also very often being exploited, so there are grounds for a legal challenge under UK wide competition law.  The more legal experts who back up what we know to be happening to us, the better.

It may be a very good time to launch a mass reporting campaign to the Competition and Markets Authority, who are a bit like Action Fraud in that they monitor activity but don’t take up individual small cases.  We will shortly be developing a template to help members join in this action. Remember challenges over PPI initially and successfully took this route.

If you want to read the Sheriff’s verdict, here it is:
Continue reading “Monopoly Money?”

This really long post is well worth a read. It has been taken from our FaceBook group with the author’s permission.

It is both a personal journey of discovery and very informative for those new to the estate rent charge:

Some new-build estates (or newly built) will have ‘estate rentcharges’, some won’t. In my area (North East) every single new-build developer is doing them, and have been for the best part of 10+ years now.

It’s a case of something which used to have some small value in society, but now has been exploited and bastardised as a ‘legal loophole’. Traditional ‘rentcharges’, or ‘chief rents’, used to apply to some buildings (e.g. terraced houses), but they were very small, nominal charges, mostly very affordable. You could also ‘redeem’ them (get rid of them once and for all for your property) by paying a larger fee, agreed between you and the ‘rentowner’. Traditional ‘rentcharges’ were essentially banned in 1977 (Rentcharges Act 1977), and all traditional ‘rentcharges’ have to end by approx. 2035.

BUT, in 1977 they didn’t ban a different type of rentcharge called an ‘estate rentcharge’. Most of these new-build or newish houses, whether leasehold or freehold, are essentially classed as houses on a private estate, e.g. with the ‘freehold’ houses (or ‘fleecehold’) you own the house, you own the land the house is built upon, but you are still liable to pay an annual rent to the ‘rentowner’ for your house being built on a private estate, come what may.
Continue reading “A Rent Charge Victim’s View”