Countryside Properties plc shafted buyer by selling his freehold to Tuscola Ltd in the British Virgin Islands, says Liz McInnes MP

Commons debate, July 11 2019

A further catalogue of leasehold sharp practice was provided by Liz McInnes, Labour MP for Heywood and Middleton.

She reported a constituent, Jonathan, who bought a house from Countryside Properties using taxpayers’ Help to Buy scheme.

Inevitably, it came with £200pa doubling ground rent. Within six months the freehold had been sold on to anonymous speculators in Tuscola Ltd, based in the British Virgin Islands.

Liz McInnes said:

“Many residents are rightly angry that the developer sold off the freehold to a property investment company without first consulting the homeowners and offering them the first chance of purchase. Many pointed out that the leases on their homes are for 250 years; if the ground rent doubles every 15 years, it will be £13 million by the end of the lease. If the Government do just one thing, they must ban this exponential growth in ground rents.”

And many of her leaseholders were ill-served by the developer’s stooge solicitors.

“They all tell the same story: that they were encouraged to use the developer’s choice of solicitor when they bought their homes, that they were not informed of the doubling clause, and that the prices that they are being quoted for the purchase of the freehold are simply unaffordable.”

Tory MP Sir Geoffrey Clifton-Brown, The Cotswolds, said:

“One of the worst scandals of all has not yet come out in this debate. When people buy their houses, part of the contract states that they must obtain a compliance certificate before they will be allowed to sell them. If they are in arrears with any of the charges that the landlord has imposed on them, if they are in dispute or if they have not paid the interest, they will not be able to obtain the certificate, and they will not be able to sell their houses.”

This is an issue raised very persuasively by the Conveyancing Association:

98% of rip-off lease sales broke consumer protection rules, says Conveyancing Association

Full Commons debate is here https://hansard.parliament.uk/commons/2019-07-11/debates/329FC410-5C69-40AC-80B1-32D470DB8B0C/LeaseholdReform

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