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Heirs of empty retirement leasehold flat now face doubled council taxes … on top of plummeting re-sale value, on-going service charges and an exit fee if it ever does sell

March 13, 2013 by
John Bottomley

John Bottomley

A son trying to sell his deceased mother’s retirement leasehold flat has been told that he will have to pay double the council tax on the empty property.

The flat has fallen foul of Chester’s efforts to penalise owners of empty properties so that they are brought back into use – and increase revenues for the council’s payroll.

The flat, which has been on the market since September 2009, illustrates what a dubious legacy awaits the heirs of retirement leasehold – well recognised now as the absolute worst residential property investment conceivable.

John Bottomley, 59, no relation to the leasehold activist MP Sir Peter Bottomley, faces a doubling of the annual council charges of £647 – after a 25 per cent discount as the property in Handbridge is empty.

The full Chester West and Chester council tax bill is £862 which will rise on properties that have lain empty for more than two years by 50 per cent. This means Bottomley will have to pay £1,293 a year.

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Small claims court exit fee battle fails … but it has cost Fairhold thousands

January 5, 2013 by

SUSANWOOD2Susan Wood (left) failed in her court struggle earlier this week to be reimbursed the £1,150 in exit fees paid when her late father’s retirement leasehold flat was sold in 2010.

Wood, a long-standing activist with the Campaign Against Retirement Leasehold Exploitation (Carlex), argued that as the fee was for a service that was not carried out – ostensibly to vet the capability of the flat’s purchaser for “independent living” – she should receive the money back.

Exit fees have long been a source of controversy in retirement leasehold. The Office of Fair Trading believe them to be unfair, but has not ruled against them, and McCarthy and Stone, which included them in its leases for years, now declines to enforce them (although as it has sold almost all its freeholds this is of little practical importance).

The issue was heard on January 2 in the small claims division of Sheffield County Court, but Fairhold, a freehold owning company within the Tchenguiz Family Trust, was taking no chances.

Barrister Paul Letman ... has form with lay applicants

Barrister Paul Letman

Barrister Paul Letman was sent up from London to fight the case, which may have cost many times more than the sum disputed.

Wood gave a polished outline of her case, which rested on the simple point that she had been charged for something that had not, in fact, been done. Only if this argument failed did she ask the court to rule that the transfer fee represented an “unfair term” under consumer contract legislation.

But Letman successfully argued on points of law that the lease did not say that the transfer fee was a fee for a service, nor did this represent an unfair contract term.

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OFT cuts deal with Tchenguiz on leasehold retirement sub-letting fees, but exit fees on sale still stand

September 6, 2012 by

Vincent Tchenguiz

The Office of Fair Trading has secured undertakings from Fairhold Homes Ltd and associated companies controlled by the Tchenguiz Family Trust to change how they charge retirement leasehold transfer fees at their 53,000 retirement developments.

The OFT has been investigating exit fees, which are payable when a tenant sells or lets out their retirement home and in some other situations, for three years and had promised a “substantive announcement” in August. Typically calculated as a percentage of the value of the property, these fees can amount to thousands of pounds.

As a result of the OFT’s investigation, Fairhold has agreed to make a number of substantial changes to the way in which it conducts its business. Fairhold has undertaken that it will not charge a transfer fee in any new leases it obtains through the acquisition or development of properties, unless the fee is for a service and represents its reasonable costs.

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OFT to make ‘substantive announcement’ on exit fees in August

July 19, 2012 by

A letter to a Carlex activist (the Campaign Against Retirement Leasehold Exploitation) reveals that the Office of Fair Trading, whose seemingly interminable investigation into exit fees on sale of leasehold retirement properties has lasted three years, will be making a “substantive announcement” in August.

The news comes in a letter of July 11 from Martin Harvey, of the “Retirement Homes Investigation Team”.

But there have also been heavy hints from Housing Minister Grant Shapps that he anticipates some action from the OFT. [Read more...]

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Attack on OFT over exit fees

May 4, 2012 by

Hanover housing association, which manages 17,000 retirement properties, attacks Office of Fair Trading for its bungling three-year investigation into exit fees

 

OFT: Fancy logo and generous budget,
but what does it actually do?

The Hanover Housing Association, which manages 19,000 retirement properties, has issued a devastating criticism of the Office of Fair Trading for its bungling investigation into exit fees.

The transfer fees that leaseholders pay when retirement properties are bought and sold has been under OFT scrutiny since 2009. It is still unresolved whether the charges comply with the consumer protection regulations, or not.

“We wanted this tested in court, but the OFT didn’t want to do this,” said Hanover’s chief executive Bruce Moore.

“This leaves an important area of the investigation unresolved.”

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Exit fees: Not fair and I’m not paying

February 13, 2012 by
Joanna Worth thinks Peverel’s 1% tax on sub-letting is wrong

 

A fanfare of trumpets for Joanna Worth, 49, who is making a stand on the great exit fee rip-offs.

Joanna is defying Peverel, which is demanding one per cent of the capital value of her flat in Beckenham, Kent, because she has sub-let it out to a pensioner.

So far she has received three communications from Peverel, including a last one on December 23 2011 threatening legal proceedings within 14 days.

“This is completely wrong and I think someone needs to make a stand against them,” says Joanna, who heard Melissa Briggs, co-founder of Carlex.co, being interviewed on Radio 4’s Money Box Live last Saturday.

Are exit fees a turn-off at Park Court, where three properties are for sale?

Joanna, who worked for the Citizens Advice Bureau for many years, bought the one-bedroom flat at Park Court in September 2007 to provide a home for an elderly friend, but the friend moved out after a couple of years.

She then sub-let it to a woman in her sixties.

In July 2010 she received her first letter from Peverel, claiming that the house manager believed that the flat had been sub-let.

“It is simply a rip-off that these charges are levied,” says Joanna. “Peverel does absolutely nothing for them whatsoever.”

Peverel does not do badly out of the 30-unit Park Court as it is. Joanna pays £2,468 a year in service charges and a heafty £494 in ground rent.

“I just hope Carlex can organise a class action to get these rip-off fees banned,” says Joanna.

It is astonishing, given that she is too young actually to be allowed to live at Park Court, that her conveyancing solicitor did not warn her of these fees – which, as is customary, were buried deep in the lease.

One thought may occur to Peverel and prompt it to drop the fees: sales to Park Court are sluggish and three flats, priced between £149,000 and £157,000 are on the market.

Without occupants, the milch cow yields no milk.

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