Who are Dublin-based Boardwalk Finance DAC and Jetty Finance DAC? Why do they own freeholds to people’s homes? And why are they based abroad?
Boardwalk Finance DAC and Jetty Finance DAC, which share the same offices in Dublin, emerge as large scale owners of UK residential freeholds, according to the Guardian today.
Jetty Finance DAC has £19 million of property assets, made a profit of £1.3 million but paid £3,000, according to recent accounts.
Boardwalk Finance DAC which owns Adriatic Land 3, which claims it has £18m-worth of freeholds with a turnover of £4.9m and a profit of £4.1m, also appears to have paid no corporation tax in either 2015 or 2016, according to the newspaper.
Who owns these entities and why they own the freeholds to thousands of homes in England and Wales – often bought by first-time buyers helped by the taxpayer funded Help To Buy scheme – is unknown.
The details emerged in a report today by the Guardian, which has turned its attention to the murky world of residential freehold investment today.
Its article can be read here: https://www.theguardian.com/money/2017/jul/08/homebuyers-who-owns-freehold-housebuilders-sold
The article follows the All Party Parliamentary group meeting on Wednesday, where both Sir Peter Bottomley (Conservative, Worthing West) and Justin Madders (Labour, Ellesmere Port and Neston) raised the issue of freehold owners.
Sir Peter Bottomley declared:
“The people who have bought these freeholds from developers are in my view going to face a significant amount of parliamentary attention. It will ask how they can buy a freehold for some £5,000 and then within a year or two ask a leaseholder to pay £42,000 to buy the freehold back.
“In my view that is unfair and socially irresponsible. Those people can expect to be treated like Philip Green if they don’t come to reasonable settlement very quickly.”
Mortgage lenders and conveyancers lay bare the rot of leasehold to MPs
Justin Madders is undertaking detailed research to find out who the ultimate beneficial owners of residential freeholds are.
Owners of leasehold properties with onerous lease terms have no idea who the ultimate beneficial owners of the freehold are – as almost all hide behind nominee directors or are based offshore.
The article references William Waldorf Astor, who runs the Long Harbour £1.3 billion fund of residential freeholds. He also owns the ground rent and consent fee property manager HomeGround.
For six years, he worked for the sector’s acknowledged master, Vincent Tchenguiz – who was arrested with his brother Robert by the Serious Fraud Office in March 2011 (but who subsequently won a judicial review which ruled that the arrest was wrongful).
The Guardian does not mention that one of the directors of Long Harbour was Frank Sixt, a Canadian billionaire, who has been the group finance director of Hutchison Whampoa in Hong Kong since 1998. Hutchison Whampoa owns Felixstowe container port and the Three mobile network among many other UK assets.
Mr Sixt has 18 years experience in the telecommunications business, according to Bloomberg.
Will Astor’s dad Viscount Astor also has an interest in leasehold issues, attending the All Party Parliamentary Group meeting on leasehold reform on December 16 2016.
Whether this is because he is an investor in residential freeholders, or is just keeping an eye on his son’s interests, or because he has a hitherto unacknowledged concern for young first time buyers caught up in the leasehold game, is unknown.
The article quoted Joanne Darbyshire, who owns a Taylor Wimpey leasehold house in Bolton. She was told she could buy the freehold for £4,425, and the new freehold owners, Adriatic Land 2 (GR2) Limited, which bought the freehold in 2012, wanted thousands more.
In January 2017 that company transferred her freehold to Adriatic Land 1 (GR3) Limited, which neighbours had their freeholds transferred from Adriatic Land 2 (GR2) Limited to Abacus Land Limited.
“You have no idea who owns the land under your feet,” Miss Darbyshire tells the Guardian. “Your dream house is traded from one offshore company to another for tax reasons, or who knows what else?”
The article quoted Heather Truesdale, of Ellesmere Port, whose leasehold Bellway house, saw its freehold transferred through one Adriatic Land to currently Adriatic Land 4 (GR1) Limited.
Consent fees for an extension rose from £300 demanded by Bellway to £2,440 from Adriatic Land 4 (GR 1) Limited, demanded by HomeGround.
The business practices of HomeGround is evident in another case of the owner of a Morris Homes house in Winsford, Cheshire, where HomeGround demanded £108 just to consider a conservatory request.
The same fee is demanded to find out the utterly preposterous (and irrelevant at this stage) price that the HomeGround freeholder would want for the freehold were a leaseholder to buy it.
(LKP advises all freehold purchases to be made by statutory process: https://www.leaseholdknowledge.com/category/fighting-back/lease-extension)
Since 2013, Adriatic Land 1 (GR3) Limited, of which William Waldorf Astor was a director until 2013, now has directors based in Dublin and is controlled by Jetty Finance DAC, which has £19 million of property assets.
The Guardian reports that neither it, nor Adriatic Land 3 Limited, whose ultimate controlling party is Boardwalk Finance DAC which shares the same office address as Jetty Finance DAC, have filed no corporation tax in some years.
HomeGround told the Guardian:
“Administration fees for dealing with applications for landlord’s consent for matters specified in the lease are subject to a test of ‘reasonableness’ in accordance with statutory regulation.
“The HomeGround team is made up of law graduates who are all overseen by a fully qualified property solicitor. The cost of the work they carry out compares very favourably with any fees charged by any firm of solicitors, even those outside of London. It is easily forgotten that these are often variations to leases and are property transactions. These must be done in accordance with the legislation and need to be carefully and properly considered.
“HomeGround’s fees are also regularly benchmarked against other companies providing similar services. In addition to ensuring the fees are transparent, reasonable and justifiable, HomeGround’s aim is to be in the lower quartile of fees charged by market peers.”
Following the failure of Vincent Tchenguiz to re-unite his Peverel/Firstport group of companies, he was denied access to much of the income that Peverel/Firstport generated, which ultimately supported the Tchenguiz property portfolio debt mountain.
Within days of his failure his portfolio breached financial covenants were put into default and penalty interest rates were levied. Coupled with “inventive” valuations that had been put on the portfolio and an inability to service loans, the banks realised they stood to lose a fortune(running into billions of pounds) if the total portfolio was dumped on the market at the same time.
So Tchenguiz was given time to sell a portion at a time.
Into the fray came Boardwalk and Jetty Finance who were able to exploit the “purchase” of distressed assets.
Through a very complex financial arrangement, assets were transferred including freeholds and ground rent back charges from the Tchenguiz companies to Boardwalk and Jetty Finance. Once the assets have been transferred the former freeholding company is put into administration.
Master Epstein your knowledge on all things ‘Tchenguiz’ et al knows no bounds!! Pray tell – Is ‘Tchenguiz’ a director of ‘ Jetty Finance’ ? You know he named his yacht ‘Veni Vidi Vici’…..classy……
No, Tchenguiz has no connection with Jetty finance. I know Tchenguiz named his yacht ” Veni Vidi,, Vici ( I came, I saw, I conquered) I renamed it “I came I saw, I sunk!
Ha ha! Yeah, that sounds about right! Or it could be renamed “Victus. Victus victus. ( Loser loser loser) Tee hee.
When you see some of the guests he took on board with him, he must have had a damn good time. At our expense it seems.
Why is it not a legal requirement to publish audited accounts? I d love to see that under, ‘research’ or perhaps ‘sundry’ expenses….???? Sadly though I fear the extend of those scams goes far beyond this. Who wasit that said, ‘The rich getting richer and the poor becoming irrelevant ?
Without Prejudice-To pretty young unsuccessful ‘models’ A short unattractive man becomes attractive and tall in stature when he stands on his wallet !! Enough said..,,,,,
To clarify my previous post:
‘A short unattractive WEALTHY chap is perceived as tall and attractive when standing on his wallet……….????Kerching baby!! B
It would be interesting to know the identities of those “entertained” on board the Tchenguiz yacht? Could any one involved in bank loan scrutiny have felt that they had been led into a compromised position if they looked too closely at loan valuations(especially in the property sector). I seem to recall that Bank of Scotland (HBOS) were heavily reliant on lending to a small and disproportionate number of entrepreneurs(including Vincent Tchenguiz) the criteria for lending were said to have been well below the normal practices for granting such loans..
Property assets were said to be crazily overvalued. HSBC warned that HBOS property assets were up to 40% overvalued. Assets included Crest Nicholson and McCarthy & Stone.
Peter Cummings was said to have taken a large role in the subsequent failings that brought HBOS to its knees.
Sadly .two of the people that tried to warn of the impending collapse met an unfortunate fate. One was shot and killed outside his home in Nairn. Thus far the killer has not been caught. The other hanged himself in a hotel in London..
I do know people who have been ‘entertained’ on the boat – , all in the name of business of course! I will attempt to get the identities of others on board ……..
There needs to be serious investigations by HMRC and fraud office into some of those accounts. Service charges have little to do with services and ground rents are an 18th c remnant, when the freeholders, looked after the land and the roads. Nowadays Contractors are often little more than shell companies that go under pocketing VAT payments, the system is rife with nepotism and tax dodgers.
All of these, would not be somewhat less prevalent if freeholders were made to publish annual audited accounts. On- line for everyone to see…some of these people have been stealing from tax payers not just the leaseholders.
I absolutely agree with you. Our Freehold company had for 20+ yrs an accountant who annual audited our accounts , when a managing agent in 2014 she persuaded the in my view utterly naive criminally negligent directors of our freeehold company to sack him and employ a Bournemouth ( We are london based) based account who does not audit the accounts. WHY. would the agent do this???? The directors are complete Eegits so I understand why they acquiecesed… AGM has been cancelled -Calls for EGM ignored. I shall have to Requisition one at some point! Incidentally, our agent was in the PEVERAL / STONEDALE/ COUNTY ESTATE MANAGEMENT stable for many years..
To clarify previous post:
“When a managing agent was appointed in 2014 our loyal thorough account was dismissed”. Our management was ‘In house’ up until 2014 with the building being regularly maintained to a good standard and at reasonable able cost. I believe the agent to be exploitative and needs investigation. I have reported insurance fraud which I believe has taken place regarding our building insurance and believe that thus is being perpetrated elsewhere by said person. It will all come to surface at some point!!!