Government Consultation

Although the consultation is entitled “Tackling unfair practices in the leasehold market” there is a section devoted to private estate charges. The government are not offering much, simply the right to go to the first tier lands tribunal for service charge disputes. On the face of it, not much to get excited about, especially as we know how expensive this can be for leaseholders who can use it already.

Look at it another way and it is the first glimmer of light at the end of the tunnel. It is an admission that the government DO know about this and the associated problems. Huge thanks to all HorNets who have lobbied for this for years.
Continue reading “Government Consultation”

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What is Fleecehold?

Inspired by people with leasehold new build homes trying to buy their freehold who then discovered they were out of the frying pan into the fire:

Fleecehold is a shorthand description for covenants in freehold deeds which create an income stream for a third party. The covenants relating to estate land management maintenance, usually with an embedded (can’t change it) company are now the norm with new build houses. Often there are also restrictive covenants where permission for even quite minor alterations has to be requested from the builder or management company who then charge exorbitant fees to even consider the matter.

These are a freehold rip off – hence the catchy term!

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Fleecehold and Private Estates

We work closely with the National Leasehold Campaign, who have successfully brought attention to the gross exploitation of home owners with doubling ground rent leases. As a result of their pressure the government have pledged to stop this practice, but have not addressed any of the wider issues like how to compensate existing home owners who find their home unsaleable or the scandal of private estates where charges are totally unregulated.

Leaseholders who thought they would be better off buying their freehold now find that they will still have a problem, both through restrictive permission clauses with unjustifiably high fees and estate charges which are unregulated. Jokingly  referred to as fleecehold, this has become a catch phrase for the whole money making scam.

We cannot accept a “sticking plaster” approach to this whole problem of home owner exploitation – a wholesale reform of feudal property law is needed to protect everyone who aspires to own and live in their own home.

Private estates are not gated communities, but an arrangement between developers and councils where the estate land is not put up for adoption, but retained as an asset by the developers who then do not have to pay a large commuted sum for adoption and can either keep or sell on the land. It is a new asset class with an income stream at the expense of the home owners. To protect the asset, limitations are placed on the home owners as well as the obligation to pay for maintenance.

It is land banking and privatisation of pubic open space without any democratic scrutiny. It has to stop, at least until there has been a parliamentary debate.

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Effects of Rent Charges

Calling freeholders to check their deeds (TP1) for covenants referring to the rent charge owner having a right of entry to the property – see below for an example:

scan of TP1 clauses
Right of Entry Example

Even if the right of entry isn’t specified in your deeds if a rent charge is in place the right exists, so please let us know if you have either or both in your TP1. You can email, or simply comment on this post. If you have already voted on the FaceBook poll, please don’t send us the information again to avoid double counting! Thank you – have a good night’s sleep – TP1 reading is very good for insomnia!

This “right of entry” actually means a statutory lease can be taken out on your property if you don’t pay the rent charge and associated service charge.

If you are interested in finding out more about the size of the problem in England and Wales, you can follow this Freedom of Information Request.

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Extra Bills through Help to Buy!

A recent article in the Daily Mail has highlighted the exploitative scandal of leasehold houses being sold to innocent first time buyers under the governments “Help to Buy” scheme. It estimates 1 in 7 Help to Buy new homes are leasehold. Not only are the home owners being exploited, but the tax payer too.

The article fails to mention the extra bills for estate maintenance all new build home owners face, and the potential long term effect on the value of these homes in comparison to older, truly freehold houses.

The question is – who is Help to Buy really helping? The government is able to tick a box over housing promises and the commercial house builders are being subsidised to rip off ordinary home owners and the taxpayer!

If you have used Help to Buy and find you are being forced to pay for estate maintenance with no accountability or value for money, please either comment here or join our Facebook group.

 

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Ch5 TV Series on New Build Home Problems

Channel 5 are filming a new series this summer following families who have had issues after the builder has left. Whilst the main focus may be snagging, they have confirmed that they would take a case study regarding the land maintenance scandal.

So, if you want to be a TV star and tell your story about this rip off then email vicky.maitland@channel5.com or phone 0203 580 3867

If anyone is willing to do this, it may help us all by raising the profile of the issue.

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Numbers Growing and Working Away

To all members new and old, this is to bring you up to speed with our activities.

There are now nearly 1,200 FaceBook group members and many others who have joined our private forum and been in contact by email. Networking has proved a tremendous success and members UK wide shared experiences confirm the common concerns which are:

Pressure of time and misleading information during the purchase process.

Promotion of builder recommended solicitors who are not informing purchasers of the implications of their covenants.

High costs, especially for managing the companies, and poor value for money.

No choice of provider, and no alternative dispute resolution process.

No consumer rights. Small claims courts being used to force payment in dispute.

Both leasehold and freehold properties are affected by establishment of an estate rent charge and associated covenants in the deeds.

The law in Scotland is different, but the issues similar.

Nearly all new build estates over the past 10 years are affected by this – estimated at 1 million homes.

Our conclusion is that the law must to changed – this positively feudal set up is not fit for purpose in the 21st century.

What we are doing:

Members are contacting their MPs and there are indications we will find two or three who will sponsor our campaign to change the law. The election is both a challenge and an opportunity and members are asking at the hustings what parties intend to do for us.

We are in discussions with a legal firm to develop a model for challenging the monopoly aspect of this exploitative set up. Also we are exploring the case for group actions against solicitors and vendors for negligence and misrepresentation. In Scotland there may be a further challenge at the Lands Tribunal – see this post.

We have submitted a written briefing paper to the All Party Parliamentary Group on Leasehold and Common Hold Reform and hope to make more representations for a change in the law to protect us when it reconvenes after the election.

We continue to raise the profile of our issues at every opportunity we can, and are building a collection of useful press contacts. At the moment our problems are overshadowed by the leasehold scandal which has had considerable press coverage, but we plan to build on that by pointing out the many similarities in the two situations e.g. the same players are exploiting new home owners, not being truthful about the implications of buying their houses, using feudal land law to their advantage, retention of assets to make more money and generally behaving in an unethical and immoral fashion.

 

 

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RoS Chickens out in Scotland

Following the success of the Marriot case in late 2015 where the burdens were declared invalid due to lack of certainty (i.e. not sufficiently complete or detailed to show what land was being paid far), other home owners on that development applied to RoS (keeper of the land register) and had their burdens removed as well. They no longer had to pay a charge, but Greenbelt still owned the open spaces. At first they refused to maintain it, but the land has to be maintained because of the planning agreements with the council. Then they started selling off parcels of land to unsuspecting small developers who hope to build one or two houses there.

The next stage involved many Scottish home owners on other estates managed by Greenbelt also applying to have their burdens removed, initially with success, but recently RoS appears to have responded to industry pressure and is refusing to use the Marriot case as a precedent.

RoS now expect home owners to reach agreement with Greenbelt (pigs might fly!) or each take a case to the Lands Tribunal.

This turn of events is disappointing, but predictable – the establishment will fight back. Home owners know the more resistance they encounter, the more seriously their campaign is being taken. There are plans to organise a group action in response to the RoS stance on this. More details will be posted as things develop.

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