Now Tchenguiz, Long Harbour, E&J Capital Partners, Wallace Estates etc can do the same …
The Competition and Markets Authority announced a major break-through today against rip-off rents: Aviva is to remove doubling ground rent clauses, re-set ground rents to what they were when originally bought AND repay contributions made in excess of this.
Leaseholders should now put pressure on other freeholders – Tchenguiz, Wallace, E&J and the rest – to do the same.
Indeed, the CMA says:
“The CMA has also written to the investment groups Brigante Properties, and Abacus Land and Adriatic Land, setting out its concerns and requiring them to remove doubling ground rent terms from their contracts. They now have the opportunity to respond to the CMA’s detailed concerns and avoid court action by signing undertakings to remove such terms.”
The statement says:
“Aviva will remove from leasehold contracts certain clauses which were doubling the ground rents payable by leaseholders. It will also remove terms which were originally doubling clauses and have been converted into RPI-based ground rent terms. Doubling clauses that cause ground rents to double every 10 to 15 years mean people can often struggle to sell or mortgage their homes. They can also affect leaseholders’ property rights. Where Aviva is the current freeholder, those leaseholders’ ground rents will revert to the original amount – i.e. when the property was first sold – and this will not increase over time.
“Aviva has also agreed to repay homeowners who were affected by these doubling ground rent clauses. This means that, where ground rents had increased, people will be refunded the excess money they had paid over this time.
The announcement is part of the CMA’s ongoing investigation into leasehold mis-selling and aggressive aggressive ground rents.”
Also announced today, Persimmon will offer leasehold house owners the option of buying the freehold of their property at a discount.
Those who have already purchased should make sure that they have not paid too much.
“It [Persimmon] will also make repayments to certain homeowners who have already purchased their freeholds. This addresses concerns raised by consumers with the CMA, and local Trading Standards, that they were led to believe they could buy their freehold at a certain price, only to find out later that this price had increased by thousands of pounds with no warning. It also means those individuals who have already bought their freehold will receive a refund, meaning they don’t miss out.”
Andrea Coscelli of the CMA said:
“This is a real win for thousands of leaseholders – for too long people have found themselves trapped in homes they can struggle to sell or been faced with unexpectedly high prices to buy their freehold. Now, they can breathe a sigh of relief knowing things are set to change for the better.
“It’s good that Aviva and Persimmon have responded positively to this investigation, enabling these issues to be fixed for leaseholders. But our work isn’t done. We now expect other housing developers and investors to follow the lead of Aviva and Persimmon. If not, they can expect to face legal action.“
The Communities Secretary Robert Jenrick added: “I welcome their [CMA’s] efforts to bring justice to homeowners affected by unfair practices, such as doubling ground rents, which have no place in our housing market.”
And he emphasised his commitment to setting new ground rents to zero:
“We have also introduced new legislation that will protect future homeowners by restricting ground rents in new leases to zero and I would strongly urge other developers to follow suit in amending their historic practices.”