The government said yesterday that it was going to haul in the agents for the Guernsey-based freeholders of Heysmoor Heights in Liverpool, which has Grenfell cladding, and demand to know who the freeholders are.
LKP has highlighted the issue of Heysmoor Heights several times. Yesterday it was raised in the Commons by local Labour MP Louise Ellman (Liverpool, Riverside), who is furious that ordinary families face bills of £18,000 to remove cladding and pay for fire marshals.
The bills are imposed by landlord Abacus Land 4 Limited in Guernsey, where the beneficial ownership is hidden behind nominee directors.
It is one of the offshore entities managed by the Long Harbour ground rent fund, said to be worth £1.6 billion, set up by William Waldorf Astor, the heir to the viscountcy and Samantha Cameron’s half-brother. For six years he worked for ex-property tycoon Vincent Tchenguiz, who at one point claimed to own one per cent of all the residential freeholds in the country.
Full debate here:
Fire Safety Cladding: Heysmoor Heights
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At Heysmoor Heights the builder went bust in 2010 and there is an insurance claim to pay for the cladding removal. If that fails, the bill
Ms Ellman told the House: “The residents of Heysmoor Heights cannot wait for long and potentially protracted negotiations with the insurance company to be resolved. There is no guarantee that a satisfactory solution will be reached.
“A letter I received today from HomeGround confirms that, should the insurance route fail, costs will be recovered through increased service charges. That is simply not good enough.
“The Minister tells me that he will speak to the agent of the freeholder at Heysmoor Heights. Will he attempt to establish the identity of the owner—or owners—of the offshore Abacus Land 4 Ltd, an anonymous beneficial company?”
For the government, Jake Berry, Under Secretary of State at DHCLG, replied:
“The Minister for Housing has arranged to speak to the agents of Heysmoor Heights’ freeholder, and I will certainly ask him to ask the agent who the freeholders are, because she has highlighted a very serious issue.
“We cannot have a situation in which the residents simply do not know who their superior landlord is. That would not have been acceptable to me in my old job as a property lawyer. I shall make sure that the Housing Minister presses very hard on that issue, and that if an answer is received, it is passed on to the hon. Lady so that she can forward it to her constituents.”
LKP is appalled at the prospect of ordinary families losing their homes to an anonymous, offshore landlord to pay to remove Grenfell cladding for which they were not responsible.
Last month, Adrian Flook – a former Tory MP turned PR man for Will Astor’s residential property interests – sent Sebastian O’Kelly, trustee of LKP, an email claiming a report on a similar site, Sesame Apartments, Battersea, was: “Soooooo factually wrong.”
Sesame Apartments: Yet another anonymous Long Harbour freeholder demanding £2.2 million over Grenfell cladding
We have suggested that contrary to Long Harbour’s repeated claims not all its freehold investors are pension funds and similar institutions. Among its earlier directors is billionaire Frank Sixt, a telecommunications expert at Hutchison Whampoa in Hong Kong.
We believe private equity is a large part of the fund – a point we made at the Professionals in Property conference last wee.
Mr Flook was asked whether he wished to issue a statement to addressed the supposed inaccuracies, to which he replied that his client was “considering whether we do or we don’t respond”.
Sir Peter Bottomley then wrote to Mr Astor personally, suggesting “with due respect to dear Adrian, may I gently suggest that either he restricts messages to one’s he sends before noon or that he clears each with you before pressing Send?”
LKP applauds Mr Berry’s efforts to identify offshore ownership of residential freeholds.
Given the powers they have over leaseholders, including forfeiture in the event of non-payment of service charges or ground rents, it is simply unacceptable that these speculators in other people’s homes remain anonymous and offshore.
Regarding the £18,000 bills faced by leaseholders at Heysmoor Heights, Mr Berry repeated the line originated by Sajid Javid, the former Communities Secretary, in asking freeholders not to pass on costs to leaseholders.
He also repeated the line that additional resources have been given to the Leasehold Advisory Service – still without a chairman after the sector insider Roger Southam was ousted (after several years in situ) over “perceived conflicts of interest” that should have been evident from the outset.
Question? If the true freeholders of a building remain a secret, how would anyone know if a terrorist group are not financing their activities from their freehold property interests?
You are right: Who can tell what other dodges such corporations get up to, if they are happy to help developers fudge the underlying contractual issues?
The freeholders could even be President Assad or Saddam Hussein.
I thought a primary duty of government was to protect its citizens. A first step would be at least knowing who owns what property in this country.
New SoS said he was outraged in House today.
Outraged I tell you.
So how would this be dealt with if there were co-ownership, long leases and no ground rents? The leasehold interest has been sold and the freeholder only has the right to receive rent and the residual value of the property at the end of the lease. If there is a shift to freeholders retaining liability for the building then either prices will go up or ground rents will have to increases to cover the increased costs.
LKP advocate co-ownership. I notice they are silent on this point.
yes I am a ‘freeholder’. I bought in when we enfranchised our block.
A lot of supposition here.
The person who believes freeholders should “do the decent thing” and pay up for the Grenfell cladding is former Communities Secretary Sajid Javid. The government has repeated this line. And good luck with it, although so far at least three tribunal cases have disagreed that freeholders have any liability, and that leaseholders should pay.
LKP’s argument is that it is unfair for leaseholders to pay this and certainly wrong that they are made to do so, with risk of losing their homes to anonymous, hidden beneficial owners. But who actually pays is an open question. We have never believed that commercial freeholders secure the long term future of a building because the leaseholders are too feckless to pay up for the essential upkeep. (A nonsense that is just not substantiated around the world which does not have the leasehold system.)
As for commercial freeholders, they are simply third-party parasites, enjoying the privileged legal position of being the “landlord”, reaping the income and unjustifiable commissions, while contributing nothing at all.
With the cladding issues, the leaseholders are in a predicament in any litigation: they have to take action against the landlord to make him challenge the warranties, original builder or regulators. A difficult two-stage process.
But we will see what happens comparing the issues faced at English sites over Grenfell cladding with Glasgow Harbour, which also has it, but where the flat owners in Scotland are able to mount a direct challenge.
Both flat owners in England and Scotland are in a bad place over Grenfell cladding, but there is much more freedom of action in the latter.
Hope that helps regarding our supposed silence over these issues.