Bellway is circulating a leaflet in the North West to try to persuade potential buyers that all is well with a leasehold house purchase.
“As part of a leasehold tenure, the homeowner will pay a modest ground rent which they will be made aware of upon enquiry or at the point of reservation …”
That last bit is contentious, as a rather large number of customers, whether Bellway or other housebuilders, claim ground rent is not a term heard often, if at all, from the lips of developers’ sales staff.
Nonsense terms such as “virtual freehold” to explain away the snares of leasehold are quite common, however.
“The benefit of us receiving this annual ground rent allows us to sell leasehold homes at a very competitive price and at a lower cost to the purchaser than a freehold sale.”
This is highly questionable.
There is, on the contrary, evidence showing leasehold properties being sold for the same amount as comparable freehold properties.
Fortunately, owing to housebuilders being caught out over the leasehold houses scandal, informed consumers will hopefully be giving these dubious products a wide berth.
But the most dubious bit is this:
“Do I need to notify the freeholder of any changes?
“You will be required to notify the freeholder if you re-mortgage or if you wish to make alterations to the property.
“Consent for alterations to the building (including extensions, loft conversions and the erection of conservatories) will need to be granted before you may start any works.
“In both instances, there will be a reasonable fee payable and it is important that you seek consent under the lease prior to any alterations as otherwise fees for retrospective consent could be higher.
“These conditions apply to all of our purchasers on both freehold and leasehold sales and ensure that the development you purchase upon retains the original character intended.”
Now there may well be covenants preventing conservatories etc on a freehold house purchase. There may even be a communal service charge to maintain common parts to an estate.
But you certainly do not require any consent from a freeholder, because that is you.
The other big porkie, although it is by no means unique to Bellway, is the continual reference to leaseholders as “homeowners”, as in:
“Ground rent is an annual payment by the homeowner to the person who owns the freehold, payable on 1st of August in
each year …”
Leaseholders are referred to very accurately as “tenants” in all relevant legislation and legal documentation.
If the courts are referring to leaseholders as “tenants”, then the sales blurb from housebuilders should do so as well. The omission of this precision is a major factor in the very convenient confusion over what precisely is involved in a leasehold property purchase.
The full Bellway document is below:
Information on Leasehold Properties all 999 year sites Bellway
Leaving aside the dubious assertion that consents may be needed from the freeholder if the Leaseholder (Please note the word “Leaseholder” and not” Homeowner” Bellway) perhaps you have a scale of charges for seeking such consents that you would be happy to put into the public domain? That way we can compare and contrast the fees charged by a third party you have sold the freehold onto? Please include your charges for late payments etc.
Obviously potential purchasers of Bellway houses might want to know of any financially crippling administration fees they may end up being liable for once you have sold off the freeholds?
“If the courts are referring to leaseholders as “tenants”, then the sales blurb from housebuilders should do so as well. The omission of this precision is a major factor in the very convenient confusion over what precisely is involved in a leasehold property purchase.”
I totally agree, The freeholder and his managing agents , have all the rights over euphemistically called “owner occupiers”. That is not a term that carries much weight in law. The system underplays the reality of our disadvantaged, if not plain downtrodden, position.
As usual no-one appears to be challenging the term ‘Tenant’ – v – Leaseholder
A Tenant is the Equity ; paying a wkly and /or mthly Rent – NOT Ground Rent. All the while any buyer acquiesces to this incorrect advice the Lessee home owner loses their rights. Has everyone forgotten Lord Dennings Cmnd 2916? In Equity the Lessor (Freeholder) owns the land whereas in Equity the Lessee owns the bricks & mortar. If this was not so how would you gain a Mortgage? Would there be any need for a Surveyor? If the Lender can’t secure their Charge against bricks & mortar then they will not lend.
Bellway refer to a 999 year lease. Yet they regularly give only 150 year leases; as in the Ellesmere Port case and certainly on a current Heaton Moor, Stockport development. If 999 year leases reduce the price you would expect some marked reduction for only 150 years – absolutely no evidence of this!