The same small number of legal firms recommended by developers when selling properties with onerous ground rent terms could face legal bills of up to £500m, says the Daily Mail.
Many buyers were lured by discounts on purchase prices and on legal fees for using the recommended solicitors.
Louie Burns, of Leasehold Solutions, was quoted saying: “I wonder whether these companies have really told their customers if they’re facing a bad deal.
“They have been handed several hundreds of thousands of pounds in fees thanks to developers.”
More than 42,500 new leasehold properties were sold in 2015 – and Mr Burns says payouts for negligence could hit £578million for that year alone.
The article quoted a survey of buyers by Leasehold Knowledge Partnership, which found that Taylor Wimpey had the worst examples of doubling ground rents.
Sebastian O’Kelly, of Leasehold Knowledge Partnership, was quoted saying: “Now some of these properties are coming on to the market as resales, and other solicitors are looking askance at these lease terms and advising buyers to pull out.”
Related posts:
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71% of leasehold house buyers used developer recommended solicitors
Taylor Wimpey recommended conveyancing solicitors go bust after one is jailed for stealing £280,000
Solicitors squabble in High Court, while leaseholders face a £30,000 right to manage legal bill
Will Astor should come to meet leasehold house owners in Ellesmere Port
It would be interesting to hear from a conveyancer recommended by developers.
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Doubling ground rent leases are standard and not against the law. They are not allowed to give financial advice and know that the purchaser will lose their deposit, valuation fee and pay for legal work if the purchase is stopped at this late stage. Builder plcs never give full up front information on charges and by the time purchaser sees the lease they are caught emotionally and financially.
Also the HELP TO BUY online calculator does not even include double ground rents, just the first payment. So the government (Gavin Barwell,DCLG,LEASE etc) has taken no action and are tacitly giving support to these practices by giving millions of taxpayers money to builders in a vague hope they will treat customers fairly. Why would they when this is a once in a lifetime opportunity to make massive profits because of government incompetence.
The leasehold law is so complex, so rotten and so unfair to ordinary homebuyers nothing will change until leasehold is abolished and the unfair terms rescinded.
Theresa May’s catch phrase is working for ordinary people not the privileged few. Well here is a manifesto opportunity to better a few million leaseholders lives versus a few greedy freeholders.
If remortgaging becomes a problem it is truly a financial catastrophe for potentially over a million leaseholders and makes PPI look insignificant.
I might be naive but don’t understand why more MPs are not pushing for reform. My Tory MP says he has written to Gavin Barwell and that is it, when I asked him to join the APPG.
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