Civil Justice Council
The CJC is an Advisory Public Body which was established under the Civil Procedure Act 1997 with responsibility for overseeing and co-ordinating the modernisation of the civil justice system. We meet at least three times a year to discuss and agree formal responses to consultation papers.
The Civil Justice Council, an advisory body chaired by master of the rolls Sir Terence Etherton, said the prohibition of leasehold sales should be a ‘last resort’ and it urged the government to find other ways to tackle abuses of the system.
The advice was made public yesterday by the Law Society Gazette.
It is extremely disappointing to see this submission (below) from the Civil Justice Council.
On ground rent increases, the response endorses linking rises to the Retail Price Index, or setting the maximum rent for new build properties at 0.1% of the property value.
‘There is no simple answer to this question,’ adds the response. ‘If leasehold properties are sold at a freehold value, then ground rents should stand at a peppercorn or nominal rate. However, if the price has been significantly reduced to reflect its leasehold status, there is nothing in principle to stop a developer charging a ground rent provided that this is not open to abuse and the property does not become unsaleable in the future.’
TheCivil Justice Council pointed out that if the proposed ban goes ahead, developers may attempt to recoup the income they lose by raising other charges.
There is no evidence of this whatsoever.
Land Registry data shows that leasehold houses have been sold at no discount compared to freehold houses, and that sales have been fuelled by taxpayer assistance through the Help To Buy scheme.
The Civil Justice Council submission is here:
cjc-response-on-tackling-unfair-practices-in-the-leasehold-market
Related posts:
69% of new houses in NW are leasehold. Many owners stuck in limbo. And ban fleecehold covenants, says Maria Eagle
Pinsent Masons believes ban on ‘almost all’ new leasehold houses to have retrospective effect
Farewell to newbuild leasehold houses?
MPs tell government consultation: End leasehold houses. Scrap new ground rents. Ignore pleas for self-regulation. Ban Help To Buy on rip-off leaseholds
Persimmon sold leasehold houses for £50,000 more than same-size freehold houses at Harrow View West
Countdown to take part in Sajid Javid’s consultation
To Sussex lessee. To misquote Sajid Javid ‘Enough is never enough’ for some people.
People like Will Astor (related to Cameron} and Tchenguiz make millions from tenant leaseholders. They would consider £220k pa. chicken feed. Much more money to be made from fleasing.
Judges can make mistakes just like the rest of the human race and say sorry. Perhaps you should direct your questions to Sir Terence and find out the interests ot the other members of the CJC. They all signed off on a consultation which is a slap in the face for every leaseholder in this country. An utter disgrace. Two words ‘ VESTED INTERESTS’.
This posting has certainly hit some raw nerves
Indeed Joe. Sussex should be less concerned about the maligning of Sir Terence and address how on earth an independent and impartial organisation (The CJC) could possibly suggest that leasehold should remain in place.
Hear hear!
Can we please ask everyone to moderate their tone. There are many aspects of the CJC report which are constructive. We now have to find out why they have said they feel there is a need to retain certain aspects of the existing system.
The speculation that because Master of the Rolls is the director in a company that has a SIC code related to some sort of property matter and turns over just one thousand seven hundred and fifty pounds a year does not mean he has any conflict of interest.
This is a very reasonable point at a personal level, but asking abused leaseholders to provide the benefit of the doubt when
1. We all know that corporate appearances are contrived at a whim and
2. No declaration of interest was reported as having been made
is less than fully persuasive even if the point is conceded in principle.
Fair comment from Admin2, and I am as guilty as any (in fact more than most) of immoderation, I will be more measured from hereon and will be so now. The biggest obstacle to suitable and proper reform – lets not beat about the bush, abolition of leasehold laws – is entrenched vested interests with a financial interest in the status quo. The legal profession is one such vested interest, and property lawyers and barristers very much so. Sir Terence is Honorary President of the Property Bar, this alone suggests a vested interest. But surely the integrity of the chair of the CJC overrides self interest? Then why has he come down in favour of the continuance of leasehold laws after what he suggests is suitable attention to the abuses?
Michael Epstein posted an excellent piece making reference to Sir Terence being gay and in a same sex marriage (which some people wrongly suggested was tasteless due to personalising things).. Michael’s post could easily have made reference to slavery, and not to homosexuality, but more suitable referenced the latter. Leasehold laws are the modern day issue which are as oppressive and wrong as laws, in their day, allowing slavery and laws criminalising natural sexual preferences. How on earth can Sir Terence of all people not see this? Is it any wonder that people like me scramble around looking for dirt?
Those who trespassed on Kinder Scout were met with the full force of the establishment, and were jailed – but the trespass led to our right to roam. I do not believe that those in high office – in government, in the legal profession, anywhere – have the common good and equity at the forefront of their minds.
When LKP published the CJC statement they also said that it was chaired by Sir Terence Etherton. So they must have expected,and probably welcomed a few harsh comments from desperate Leaseholders.
The CJC statement was clear in saying that the Developers would look for alternative ways of extracting monies so as to retain their incomes.
It so happens that their Chairman and his partner run one of these Real Estate companies.
The Master of the Rolls is a very influential position, the second most important Judge in the land. We are not talking about kitchen rolls here.
So the adverse comments from desperate Leaseholders are not surprising.
Hi,
I suggest you all forget about Sir Terrence and his private life.
The Rivemoor Ltd accounts show an asset comprising a freehold property originally purchased for £78K about 25 years ago and now valued at £250K . It seems the rental income is not charged at market rate and turnover income is exceeded by maintenance costs so Rivemoor has operated at loss for over 20 years . ( and there is no mention of any tax paid and their accountant may have found a way to dodge the tax ).
The declared purpose of CJC is ” MODERNISATION ‘ of civil justice system” :
The CJC members should be advising the Government Ministers and LKP how to MODERNISE :and they failed to give modernising advice .. :
1. Modernise the property title by phasing out Leasehold and bring in Commonhold.
2. Modernise the £350 arrears threshold for starting forfeiture proceedings and raise to £350 + premium paid at start of lease.
3. Delete the marriage value cost of statutory lease extension etc . Replace by collective freehold enfranchisement to Commonhold system at 10 x Annual Ground Rent.
4. Give every leaseholders automatic right to become a director of the freehold company.
I forgot to include this statement by CJC in my above post. :
The CJC is an Advisory Public Body which was established under the Civil Procedure Act 1997 with responsibility for overseeing and co-ordinating the modernisation of the civil justice system. We meet at least three times a year to discuss and agree formal responses to consultation papers.
As Admin2 says, we do need help in understanding the reasoning behind the CJC report.
A visceral backlash from tenants who have little power is not surprising. No one can deny that the CJC views on leasehold are typical of influential ‘vested interests’. Taylor Wimpey and the Ground Rent Investment Fund could have written the report.
The penultimate paragraph about regulation of managing agents was very constructive. £750m pa overcharging in 2012 and it could easilty be 1 billion pounds in 2017. A massive amount of money taken from tenants will just go on and on without regulation.
We need to know how Sir Terence is going to help the move to regulation and offer guidance on the implementation of this much needed consumer protection.
Leaseholders really do need some answers from the CJC.
Joe, I have received a response from the assistant private secretary to the ‘Master of the Rolls’.
Dear M.s …
The Civil Justice Council responded to the consultation from the Department for communities and Local Government ( DCLG) who are responsible for this policy area.
It is not planning any further work In this area and you have taken the correct stepIn sending your submissions to the DCLG.
Kind Regards
Etc
The CJC response includes the following statement shown below: :
“Concerns centre on consumers not understanding the differences between freehold and
leasehold property purchases, and opting for leasehold as there is a discount on purchase.”
For sale of block of new flats , it is solely the Developer company which decides to sell new flats under Leasehold title or Commonhold title and
1. what is the highest sale price can be demanded in that location from the buyers and
2. what amount of annual ground rent shall be demanded.
The CJC members should visit a few sites selling new flats and ask site sales office to quote the property price for sale under leasehold or commonhold title and option price for peppercorn ground rent
My past experience -Buyers are not given any option because the developer’s solicitor will not accept any changes to the lease.( after the reservation fee has been paid ). .
The CJC response that ‘consumers opt for leasehold as there is a discount on purchase’ shows a complete lack of knowledge about property purchase. The average consumer doesn’t have a law degree and does not understand words like reversionary discounted interest,marriage value etc.. It seems many lawyers don’t understand and certainly they never inform clients in the conveyance process.It would take months to explain the working of leasehold.
.All new build flats including Help to Buy are sold as leasehold- there is no choice. Understanding the difference between freehold and leasehold is irrelevant when buying a flat. They are all leasehold.
The lack of transparency, hidden charges and commission kickbacks were also standard in Financial Service before regulatory changes. Treating customers fairly and using plain english does not fit in with english feudal law supported by the likes of Sir Terence and Roger Southam. The colonies,Ireland and Scotland have junked leasehold now it’s time for England to learn from others.
The CJC has basically ignored its purpose of ‘modernisation ‘ of existing civil law in favour of no change to vested interests. and no further discussion.
Let’s hope MPs and Sajid Javid have the cojones.to make a difference.
We shall see!!