This morning I appeared on the Victoria Derbyshire show to discuss exploitation within the leasehold sector.
I joined mistreated leaseholders and property experts in an effort to raise awareness of the underhand tactics unscrupulous landowners can employ to abuse inexperienced buyers.
We can be grateful for all that Leasehold Knowledge Partnership and Campaign Against Retirement Leasehold Exploitation do to hold crooked landowners and managing agents to account.
You can watch this morning’s coverage by skipping to 14:56 and 01:07:20 on the following link:
I thought it was a poor effort of the lady who represented and excused the Conveyancers.
She said the spiralling Grount Rents were a new phenonemon and Solicitors had not yet got used to them.
They have in fact been around for several years, and would it not be Solicitors who draw up these devious conditions in the first place.
I am sure those Solicitors who the Developers push their customers towards are well clued up and are part of the dodgy process.
When they act for the unfortunate customer who is buying the new property the horrendous Ground Rent conditions are not highlighted.
I wonder how those same Solicitors would now treat a resale. Perhaps they are now ,highlighting these conditions and advising prospective purchasers not to buy.
Micheal that’s exactly what is happened now solicitors are advising people not to buy. So us unfortunate people are stuck with these houses with nowhere to turn Unless of course we stump
Up the 35-40k to buy the lease ! Taylor wimpey have built prisons not houses
I also watched this programme and was also unimpressed with the knowledge she had been provided or knew.
It is obvious those involved were either kept in the dark or were attempting to reduce the full impact of these immoral happenings.
What a brilliant programme, best i’ve yet seen on leasehold but it needs to be shown nationwide to have any real impact. The gentleman speaking on buying their freehold spoke for many with regard to seeing thousands of pounds in service charge disappear and nothing to show for it!!
It’s on the main news, at last. Perhaps the law makers will look into some real reform, rather than just window dressing.
We are hoping to get a similar slot on the Rip of Britain show. Fingers crossed , people are talking to the producers Keep watching the face book page national leasehold campaigning for updates
It was the best coverage on TV I have seen of the scandals in leasehold. As a TW flat ‘owner’ I too have recently discovered (after never being advised when purchasing) that my ground rent doubles every 10 years. First doubling is in 2020 from £250 to £500… it stops when it reaches £8000 in 2060.
Would I have bought this flat from the developer, TW, if this had been brought to my attention – of course not.
Was I an expert on reading leases at the time of purchase (2012) – no of course not, that’s why I had solicitor (who came on the strong recommendation of TW by the way) who was happy to point things like a minor question mark over a sewage pipe and the like, but skip over the ground rent review clauses completely.
A simple solution which would go a long way would be an enforced blanket cap on ground rents (to say £500 max for all new and existing residential properties). This would sort out the the ground rent issue for flat owners and surely would have to reduce the high quoted prices to buy freeholds (for house owners) and to extend leases too..
I am probably being way too simplistic, but this could reduce the stress and anxiety many of us are now feeling.
The investment companies will cry out at this – the developers should have to recompense them to some extent.. I’ll take off my rose tinted spectacles now.
One thing is for sure – I will never be buying from TW again, nor will anyone I know unless they sort this out properly for existing leaseholders as well as the market in the future.. I had a lot of respect for them, I have none now. If they sort this out for existing leaseholders quickly maybe that respect can re-earned.
I’m in exactly the same position as yourself. Again was encouraged to use the solicitors through Connels in Dunstable and they failed to mention that the ground rent will double every ten years. This was the back end of 2015, it wasn’t till I heard a programme on Radio 4 about this situation that I thought let me go and check the terms. If you ever see this McCann homes you are a complete shower along with Quality solicitors and Connells estate agents.
When the time comes to sell the flat I think it’s going to be a real struggle sadly.
I note that Dame Katherine Mary Barker is listed as a director of Taylor Wimpey is also listed as a director of Electra Partners Equity, who have a connection with Knight Square, parent company to Firstport.
The latest white paper would have more credibility if Parliament had enacted all the protection clauses in the 2002 Act.
One area of abuse in leasehold is the absence of transparency in year end accounting for service charges due to the dark art of accrual accounting.
How many mere mortals understand accrual accounting? It is the noble art of obscuring by summary rather than revealing by detail. Balance sheets can be made to balance even when the figures used are inaccurate. So-called ‘adjustments’ such as, er, accruals or creditors are an opportunity to mess with the final results. If this isn’t sufficient, journals adjustments can be used to massage the published figures further.
In theory the final accounts should emerge unscathed from a balanced trial balance. The purpose of the trial balance is for every transaction, whether debit or credit, to be included and balance out. That’s the theory.
As a rare leaseholder who understands accrual accounting, it is surprising how easy it is to create, say, an expense adjustment in one year that increases the deficit (balancing charge, please) and omit to adjust all this amount out of expenditure the next year yet arrive at balanced accounts. Must take years of study?
Accrual accounting effectively tells leaseholders they should not expect to understand where their money has gone. Ordinary mortals would have to pay an accountant, who in turn would need to do an audit at the leaseholder’s expense, to hope to unravel the true figures. If these derive from a pooled client account, a full audit would be an interesting cost.
It’s not the accrual format that stinks but the absence of a simple enough requirement that landlords should serve an ‘extended trial balance’ statement at the year end rather than the sanitized figures that represent only the final few columns of the trial balance, i.e. after all ‘massaging’ has already been done. Harder to hide behind.
More ‘unreasonableness’ can be buried within accrual accounting than whether or not the gardener’s costs were a bit steep.
Well said. So thats what is called ‘Accrual accounting’ or yet another simple way to fleece the leaseholder…
I am currently dealing with ‘ Accrual accounting’ regarding a ‘credit note’ for what I would call ‘ Double Accounting’. However , they got found out by me when I asked to inspect the accounts. Surveyors work was charged to our service charge account to the tune of £985!!!! The dimwitted directors of our freehold company did not notice this sleight of hand ( Idiots) I did and am making the agent jump through hoops to give a ‘ full and substantial explanation’ else I will report her for obtaining shareholders money by deception = Fraud= Criminal record! Let’s see how she likes them apples!!!!
Clarification- Surveyor survey for a completely different property was charged to our service charge. NICE TRY!