… after inviting ‘sympathy’ for solicitors who landed leasehold house buyers with onerous lease terms
Beth Rudolf, the spokesman for the Conveyancing Association, has launched an astonishing attack on the HomeOwners’ Alliance for “scaremongering” over leasehold.
The two organisations, which have co-operated in the past – along with LKP – have fallen out over the Alliance’s report published this week.
The report has received significant media coverage and is an elegant resume of grievances that will be familiar to LKP readers. Here is Patrick Collinson in the Guardian
Furthermore, it has come out in the same week when ministers have pledged to ban leasehold houses and onerous “feudal” ground rents. The Council of Mortgage Lenders has also expressed concerns as lenders decline loans on properties with onerous lease terms.
So the report could be said more to reflect mainstream thinking than would have been the case a couple of weeks’ ago.
But Miss Rudolf, a former estate agent, has rounded on the HomeOwners’ Alliance, founded by former DCLG civil servant Paula Higgins, over whether a leasehold tenancy can be described as home “ownership”.
It is an old wrangle, much debated, that goes to the heart of leasehold.
The proposition that a long lease amounts to homeownership is strongly favoured by developers, estate agents, commercialisers in the sector and, one must assume, members of the Conveyancing Association. Or, perhaps, simply Miss Rudolf herself.
The law is rather more precise, however, referring to leaseholders as “tenants” in every document that regulates the rights and obligations of leasehold owners.
If the law uses the word “tenant” and “tenancy”, there is no good reason for anyone to use a different term to describe this form of tenure. There may, however, be plenty of bad reasons to do so.
“When is your home not really your home?” asked Miss Higgins in the opening sentence of her report, and answers: “When it is owned by the freeholder.
“We see first-hand how the leasehold system too often turns the dream of homeownership into a nightmare.”
Miss Rudolf disagreed, telling the estate-agents funded Property Industry Eye website. “While we congratulate the HomeOwners Alliance on its leasehold report, we would not want to see unnecessary concern amongst leaseholders that they do not own their property in ‘the eyes of the law’ as the report suggests.
“This is clearly not correct and leaseholders should know they have complete security so long as they comply with the terms of the lease.
“We are concerned that the implication that leaseholders are not legal owners could be considered scaremongering, which we do not support in any way.”
It is unfortunate to see the Conveyancing Association disparage this report, which is a very welcome contribution to the debate on leasehold. LKP wholeheartedly congratulates Miss Higgins for producing it.
Its recommendations are broadly welcome to LKP:
- Scale back leasehold
- Review “the whole leasehold system” (not sure what that means)
- Outlaw new leasehold houses (Sajid Javid is with the Alliance on this one)
- Outlaw doubling ground rents (ditto, and add in mortgage lenders, too)
- Mandatory commonhold
- Lease extensions to be 250 years
- Standard lease terms
- ‘Faster and fairer’ to sell leasehold properties (the Conveyancing Association probably agrees with this)
- Easier for leaseholders to contact their freeholder (hopefully with reverse charges, if they are in the British Virgin Islands)
The Conveyancing Association has made a useful contribution over issues concerning the frustrations and delays in leasehold conveyancing.
But it has made unfortunate interventions when it has considered wider leasehold issues.
Miss Rudolf’s contribution to the Victoria Derbyshire Show, broadcast by BBC TV on February 2, was greeted with hoots of derision after she invited viewers to sympathise with the conveyancing solicitors who had landed leasehold house buyers with onerous ground rent terms.
Some of the criticisms shared with LKP have come from other members of the legal profession.
Miss Rudolf was invited by BBC reporter James Longman to look at the Bellway lease of Katie Kendrick, one of the founders of the National Leasehold Campaign Facebook group.
“It looks like she has had the right advice from the conveyancer,” Miss Rudolf announced.
“But it would appear that the conveyancer was unaware of the intentions of Bellway to sell on the freehold.
“And you have got to have sympathy for the solicitor or any conveyancer in this position because this is a new phenomenon. It is not something that would happen in the past that developers would routinely be looking to sell on the freehold.”
In fact, developers routinely sell off their freeholds and have done so for decades. It would be extraordinary for a conveyancing solicitor to assume a developer would retain the freehold of a leasehold house.
Mr Longman then asked: “She [Katie Kendrick] came into the showroom and the sales team sort of said to her that this is as good as freehold but it quite clearly isn’t. Isn’t there an obligation on the part of the solicitor on the part of the developer and also the solicitor who the developer recommended to tell her these things?”
Miss Rudolf replied: “Anybody marketing a property is covered by the consumer protection from unfair trading regulations. Which means that if there is something that would impact their decision-making process then they should be advised of that before they view the property.
“This is a really important point. The reason being that it is too late at the point that they have moved into the house to find this out. They need to know before they have viewed the property; before they have thought about where they are going to put their sofa and how the kids are going to get to school and all of that.”
The question here is: if that conveyancing advice from developer-recommended solicitors was so independent and useful, why are other solicitors advising potential buyers of these properties now not to touch them?
And why are litigation solicitors now queuing up to sue the firms concerned?
HOA report here: MAR-88 Leasehold Report_FINAL (1)