An affluent couple living in the idyllic Cotswold village of Lower Slaughter are funding their lives through leasehold property cleverness that is costing poorer property buyers thousands of pounds.
Martin Paine and his wife Margaret Anne Kirmond are benefiting from the sale of flats at Blythe Court in Coleshill, Birmingham, which have a trap in the lease that ends up costing homeowners thousands a year.
The lease terms are so unobvious that so far four – and possibly seven – firms of solicitors acting for buyers have failed to spot them.
Kadian Kennelly, 32, a social worker and first-time buyer, paid £58,000 for 7 Blythe Court flat on October 7 last year and was told by her solicitors that the ground rents would be £250 a year.
She was horrified later to be presented by Martin Paine with a demand for a ground rent of £8,000 a year.
The ground rent increments, which double every ten years, are so designed that in 90 years time they will amount to more than £4 million a year.
Kadian Kennelly, a social worker, faces ground rent demands of £8,000 a year
“I feel absolutely devastated by this,” says Kadian. “I sank my savings into this flat and borrowed off a friend to buy it, although I now have a mortgage.
“This is just blatant exploitation of obscure legal rules to prey upon the naïve, the poor or the very poorly advised.”
Martin Paine, who is not a lawyer, presented the ground rent demand as “head of legal services” of Circle Residential Management Limited on behalf of the freehold-owning company Mercia Investment Properties Limited. What he does not tell residents is that both companies are ultimately owned by him or his wife Margaret Anne Kirmond.
“My solicitor did not spot what is a deliberate trap in the lease,” says Kadian. “This means Martin Paine and his wife are now in the position to extract this money from me, or force me to sell and take a chunk of the proceeds.
“Put frankly, their behaviour is repugnant.”
Kadian has fallen victim to perhaps the worse scam in leasehold, explained in detail here
On February 9 2011 solicitors acting for a previous owner, who had died, agreed to a deed of variation to extend the lease by 99 years added to the 50 years already existing. So, 149 in total.
Martin Paine has admitted to LKP that he is not a member of the Housing Law Practitioners’ Association
In fact, hidden in the document is a clause that means that this extension does not start from 2011 – as all these solicitors have assumed – but from 1961, when Blythe Court was built. The lease variation also doubles ground rent every ten years from an initial £250.
As a result, Kadian faces the demand that has risen to £8,000 a year.
It would be possible to challenge the deed of variation in court, and there are grounds to do so even with the wording of the deed of variation as it stands, according to a barrister who has studied the documents. But that could cost the families at Blythe Court thousands of pounds.
Kadian is far from being the first victim-owner at 7 Blythe Court.
The first purchaser of the flat after the deed of variation was Michael Herring, a buy-to-let investor who paid £85,000 in February 2011, of which £24,000 was cash.
“It was a nightmare for more than three years that cost everyone involved a lot of time, effort and money,” says Herring.
He sorted the problem out by taking a professional negligence action against his conveyancing solicitors, whose insurers paid up.
“It cost the insurers £109,000 to sort everything, which is a staggering amount of money. I got £30,000 back,” says Herring. “I was so glad to see the back of the place.”
As part of the deal the flat was sold to Martin Paine’s company Kirmond PP Investments Limited (of which he owns 100 per cent) for £30,000.
On February 12 2015 Kirmond transferred the ownership of the flat – for a declared £70,000 – to F.t.z. Limited, which is 100 per cent owned by Mrs Paine (Margaret Anne Kirmond).
On April 30 2015, 7 Blythe Court sold at auction for £72,000 to Julian Carter.
Anne Kirmond, aka Mrs Martin Paine, either owns or co-owns the companies involved in Blythe Court
Carter evidently decided to get out quick after receiving the £8,000 a year ground rent demand, and the flat went to auction again in July, but did not sell.
In September, it was set to be auctioned again when Kadian purchased the flat for £58,000.
In October, Martin Paine demanded his £8,000 ground rent dating back to March 2015: in other words, for nearly two months when the flat was actually owned by the Paines’ own companies.
Kadian and her solicitors had agreed to pay outstanding ground rent when she purchased the flat, believing this to be no more than £250.
“All I was trying to do was to buy a flat so that I could commute to work,” says Kadian. “I have fallen into a deliberate trap set by Martin Paine to catch the unwary and their solicitors.”
£58,000 is a bargain price that may have alerted some buyers, but then recorded prices at Blythe Court vary from £30,000 to £105,000.
Kadian used solicitors John W Dawes of Newport, who could not jettison her fast enough when the scale of the disaster unfolded.
Having informed Kadian in writing that her total ground rent would be £250 a year for the flat and £10 for a garage that she had also bought, John W Davies could not make it clearer that the £8,000 a year ground rent that subsequently emerged was her problem alone.
On December 2 the solicitors told her that they had received the demand for £8,000 and she had agreed to pay outstanding ground rent and service charges from March 2015.
“Accordingly, please arrange to contact Circle Residential Management Limited directly to make payment to settle this demand,” wrote Michael Jenkinson for John W Dawes in his last communication to his client.
Martin Paine bought the freehold to Blythe Court on September 15 2004.
At first he seems to have behaved like most other freeholders, extending the leases of two flats by 99 years the date of the application.
As a result, the flat at 2 Blythe Court was extended on January 28 2005 for 99 years from a start date of 25.3.2005; flat 6 Blythe Court was extended on February 4 2005 for 99 years with a start date of 25.3.2004.
Thereafter the cleverness began.
In total, six other flats in the block are in the same position as Kadian. All have lease extensions for 144 or 149 years and ALL are dated back to 1961. (The numbers differ depending on the date of the extension application in order to add up to a 99-year extension to the lease.)
Sarah and Chris Cherry, with daughter Aimee, have ground rent demands of £1,000 a year
Chris, a landscape gardener, and Sarah Cherry (left), an admin supervisor, bought the flat 11 Blythe Court for £105,000 in 2007, when they were 25 and 19 years old. They put down £5,000 in cash.
Advised by solicitors, they extended their lease with Martin Paine. But rather than extend the lease by 99 years from the date of application as they thought, the lease was increased to 144 years dating from 1961.
“We brought the flat in 2007 and renewed the lease to start from that date,” Sarah explains. “Me and Chris were both on minimum wage when we purchased this our first property together.
“We literally scraped all the money together that we could to do this as we wanted to stand on our own two feet.
“Martin Paine started the ground rent demand from 1961 at £250 doubling every 25 years.”
At first, the couple were paying £500 a year in ground rent, but it doubled in 2011 to £1,000 as another 25-year stretch began.
On top of the ground rent, the couple, who now have a three-year-old daughter Aimee, have to pay the service charges as well and contributions to insure the building, as do all the leaseholders.
Ground rents of £1,000 would typically be seen in areas such as Knightsbridge or Chelsea, rather than Colehill, Birmingham.
“We feel that we have been utterly conned.”
The couple almost certainly had a valid claim against local solicitors Waters & Co, who advised them. The firm was well aware that there were issues with the leases at Blythe Court, writing to Paine on September 3 2007:
“May we respectfully remind you to check the calculation of the ground rent in the lease. We had dealings with a property recently in the same development where an error was made in this regard and the lease in its new form would have been completely unworkable insofar as payment of the ground rent is concerned.”
The Cherrys did, in fact, take the matter to the Legal Services Ombudsman, and were repaid Waters & Co’s conveyancing fees of £707.94.
Unaccountably, they then did not proceed further with a claim against the solicitors in the courts.
In January this year, the Cherrys again protested about the £1,000 ground rent to Martin Paine, which they were having difficulty paying.
On January 6 Paine emailed saying that “The freeholder [that is, Mrs Paine] is willing to look at a revised rent review mechanism for your lease.”
But he made clear that the landlord would need compensating for loss of income and he urged the Cherrys to take legal action against their solicitors Waters & Co using a no-win no-fee solicitor found on the internet.
But, Mr Paine, was sensitive to the issue of a six-year limitation period on professional negligence claims.
“… however, I can see that it is also arguable that your “sufficient level of knowledge” occurred after the last rent review date in 2011 when the first £1,000 rental payment fell due … I think it is vital that you immediately seek legal advice (some firms offer a no win no fee negligence claim service, try a google search).
“I also think that the date of any admission made by Waters & Co will be critical in deciding on the commencement date of the limitation period.”
Patrick and Wieslawa Majszyk, from Poland, face ground rent demands from Paine for £2,800 a year
Young Polish couple Patrick Majszyk, 32, and Wieslawa [Vanessa] Chudzik, 30, paid £100,000 for flat 3 Blythe Court on December 20 2013, borrowing £85,000. Both are employed working in a warehouse.
They had previously been tenants in the property.
Here the lease was extended to 150 years on November 7 2012, back dated to 1961. Ground rents are £350 a year doubling every 15 years, so Patrick and Wieslawa now receive demands from Paine for £2,800 a year.
They are paying this off with £75 a month instalments, increasing to £100 in six months’ time.
“We are from Poland and we had no idea that you could buy a flat with these sorts of problems,” says Patrick. “We have put all our money into this flat and now we learn it is unsellable and almost worthless.”
Patrick and Wieslawa contacted their solicitors Birchall Blackburn Law, who had carried out the conveyancing when they bought the flat.
The firm wrote a detailed letter to Paine in May 18 2015, hoping to sort out what they imagined was a simple lease extension error.
Five months later on September 2, DF Legal replied on behalf of the Paines’ company Mercia, rejecting the arguments and explaining that backdated rent had been upheld in the case Bradshaw v Pawley 1979.
On September 18 Birchall Blackburn Law told Patrick and Wieslawa that it could not act for them as “we consider there is a conflict of interest”.
Having carried out the conveyancing, the solicitors are aware that Patrick and Wieslawa will almost certainly seek redress from them.
Sir Peter Bottomley MP, who campaigns for justice for leasehold flat owners, says that Blythe Court is a scandal.
“I am shocked by this unjustifiable attempt to devalue a home and to extract a fortune.
“It is illegal to stop someone on the highway and to take the contents of their wallet.
“It should be illegal to impose unfair leasehold terms that have the same effect.
“The law and the courts should give protection, retrospectively when necessary.
“Unfair terms need to be condemned and declared unenforceable.”
Last month, LKP contacted Mr Paine about concerns regarding Blythe Court on December 17 and December 25.
In addition, a draft version of this article was send to him, and received, on Monday January 18.
He claims that the article is inaccurate, but has declined to provide details.
He has acknowledged that he is not a member of the Housing Law Practitioners’ Association, as was stated on the Circle Residential Management website.
Paine’s website also has the undertaking in its code of practice: “To deal with Tenants both in the spirit of the legal requirements as well as in the letter of the law.”
He has been contacted for a statement prior to the publication of this article.
Related posts:
Martin Paine demanded ground rents of thousands from two London leaseholders 
BBC R4’s You & Yours feature Blythe Court … and now the freeholder wants ‘more ethical approach to charges’ 
Barnard Marcus withdraws Blythe Court flat from auction 
Hogan Lovells property solicitors report Blythe Court scandal on website 
Stop auction of ‘worthless’ flat at Blythe Court and alert authorities, Commons asked
Well, I am unable to make any sensible comment at the moment. After reading the article I feel so sick in the stomach. Paine and his wife are indescribable.
I will have a think, we need to get some people in on this one
This article illustrates what leasehold is now about: the wealthy taking advantage of the poor, the unwary and the poorly advised. This is not some unusual occurrence. It’s common. What is as lamentable as that fact is the sorry complicity of so much of the legal profession in this.
LKP would be doing a considerable public service if it were able to list solicitors who could be trusted to actually DO the due diligence they get paid to do. They likely wouldn’t stand for it.
Another proof why leasehold legislation needs radical reform. Abolish leasehold, or replace with standard legislation, making it unprofitable for ‘investors’ and their solicitors, (so often the same entity) to feed on homeowners/leaseholders. I wonder, does the housing minister still thinks the system works ‘quite well, on the whole’? Anyone has more info on Housing Law Practitioners Association and who they are?
I am one of the tenants featured in the article.
I have only owned the flat for a sheer 3.5 months and I recall receiving a pre-completion report from my solicitor advising that the property is “good and marketable”.
I was thrilled, believing that I had purchased a sound investment and one that I could one day pass to my son; however that feeling of elation was soon extinguished by Mr Paine’s outrageous demand for £8000.00.
I remember reading the email from my solicitor, thinking this had to be an error. T
he email was brief and impersonal and I felt as though such news should be delivered sensitively. Not knowing what to do or where to turn, I sought advice from said solicitor, who in turn advised that I sell the property back at auction and make a clean exit.
Though faced with a huge bill and in a few months time I will owe a total of £16,000.00 I knew it would be unfair for me to pass this burden to someone else.
Hoping to find a solution I spent many days frantically calling a number of solicitors, who all reiterated that upon purchase of the flat I agreed to the terms of the lease and as such I am in a binding contract.
I spent many sleepless nights researching, frantically searching for case laws and re-reading the lease hoping to spot an error.
Through my search I came across LKP and sent an email to Sebastian, within minutes I received a response. We had several conversations since then and both he and Martin Boyd have instrumental in our fight.
I wish I was aware of LKP prior to my purchase as the wealth of knowledge on the website alone would have enabled me to make a more informed decision.
In my profession, I advocate daily for those who may not have a voice, however in this battle I felt out of my depth and I am thankful to LKP and their many associates for their continued support to our cause, my gratitude to you cannot be expressed in mere words.
Our fight is far from over, however we could not have gotten to this point without your support.
To Mr Paine, should you read this article, there was a time when you exercised fairness, all we ask is that you treat us fairly.
Through your doing you have caused immeasurable hardship, however it is never too late to do the right thing.
To LKP thank you for publishing this article and I hope it will be of benefit to many unsuspecting purchasers and potential leaseholders.
Contact your MP and bring this matter to their attention. Injustice should not be left at the freeholders benevolence.
The local MP is involved already. New news story on developments in Parliament soon.
Readers should also understand the role of Mrs Paine, or [Margaret] Anne Kirmond as she calls herself.
She is the owner of the freehold via F.t.z Ltd which owns Mercia Investment Properties Ltd
Yes please – tell us more about Mrs Paines role- spreading ownership and directorships among family members is a common ploy to create further confusion.
Just get the laptop out and start to create docs with all parties, in other words start to define their family business trees and post wherever possible. This way ordinary people can then see for themselves.
Paine, you are obviously reading this. Bear in mind, there has NEVER been such a massive response, in such short a time, to any other article on this site.
You have the assets and the opportunity to redeem yourself, so please do it.
With respect to the current residents, you have preyed upon their vulnerability, and the inability of certain solicitors o carry out an horrendous scam.
Just change all the leases to standard and normal terms and conditions..
If you are not prepared to do this will you please explain publicly why you did what you have done, and why you are not prepared to change the leases back to a typical/normal lease
The problem here is with the legal profession and not the leasehold system. Lawyers are there to protect clients and read terms clearly. The same happens every day in this country with any contract. Solicitors are instructed to read contracts and advise. Any half decent solicitor would pick up the issue with the lease extension. I for one view this story as a real call to ensure that property solicitors are properly trained. Let’s face the facts here.: no leaseholder would suffer a loss here if they sought legal recourse against the solicitor advising them. The only people who would lose out here are the solicitors and their liability insurers. The people who need to read this article are actually property lawyers.
Is that so? There have been some sweeping changes in the financial sector, for example endowment mortgages were deemed unfair and other products were removed from the market and customers were offered compensation. This did not happen because of the benevolence of the banks, so I see no reason why unfair and downright exploitative clauses in leasehold sector should not be treated the same way.
Individual Leaseholders simply do not have the same resources as freeholders – therefore we need protection from the law.
I am absolutely shocked and disgusted by the actions of Mr Paine, “Paine by name and PAIN by nature”. What a thoroughly vile human being, has he not even an ounce of compassion and fairness in that money hungry body of his?
I for one do not believe that he will be in the slightest remorseful of his actions, people like him didn’t get to their “high standing” position by being nice.
I hope that the rule of law will catch up with him and would be very interested to know the outcome.
“I hope that the rule of law will catch up with him…” I hope that the rule of (criminal) law will catch up with Mr Big/Paine. This story is scandalous. Surely, this case is one for the police to investigate involving white collar fraud/extortion?.
It’s abundantly clear that the problem here is jointly with the legal profession and the leasehold system. Although lawyers are there to protect their clients and read terms in the lease documents (or deed variations) clearly, it still leaves the question of the dishonesty of freeholders who draw up the outrageous and spurious variations in the first place.
I would argue that some of the terms in these ‘deed variations’ are so well concealed that even an experienced solicitor who has been instructed to read contracts and advise, may find it a challenge. “The lease terms are so unobvious that so far four – and possibly seven – firms of solicitors acting for buyers have failed to spot them”.
It may even be the case that a solicitor wouldn’t be expecting such a blatant example of dishonesty. I do not offer this as an excuse.
To say that ‘…any half decent solicitor would pick up the issue with the lease extension’ seems to me to be more than a little unfair. If it wasn’t for some freeholders who seek to exploit the leasehold system in the first instance, then we wouldn’t be having such a debate.
It’s apparent from the article that this Mr Paine has acted improperly and that these monstrous leases should be popped through the shredder and new, fair leases be issued. I fear that these cases may only be the tip of a rather nasty ice-berg though. These current leases are undoubtedly fructiferous to Mr Paine, but for the families who are in the middle of this unfair situation, it’s quite the reverse.
It is the failure of leasehold to protect leaseholders that allows people such as Mr Paine to operate..
Nor as has been aptly demonstrated to solicitors routinely check leasehold terms, they merely go through legal process to allow for a sale.
It is unfortunate that i cannot see an easy solution for the victims of Mr Pain.
I am veering towards the idea, that the leaseholders should file for bankruptcy.
Given the circumstances they find themselves in, such a move may become inevitable in the future.
Yes I understand they will lose their homes, but such a move brings in the role of mortgage provider.
Presumably before granting a mortgage, they would have had to do a valuation,., to ensure the assets covered the loan.. Clearly given the terms of the lease, the property was effectively valueless. Therefore , it was the duty of the mortgage provider not to grant the loan..
A situation could come about, in which the mortgage provider,would have to take back the property, leaving them with a worthless asset.
It would leave Mr Paine.having to fight with the mortgage lender(who if they so chose could keep him in court every day for the rest of his life) and leave the option open for leaseholders to sue the mortgage provider.
In the meantime. it may well be worth contacting the mortgage provider to see if it is in their interests to get involved.
Im from flat 11 blythe court, martin paine is charging me £1000 a year ground rent, i brought the 1 bed flat with the understanding it was £250 a year, soon to have a bill for £1000 which is to double to £2000 after 25 years, I feel totaly tricked and conned by mr paine, ive been ringing him up for 8 years saying please change this im finding it hard to pay, but he wont, hes making loads of money out of the residents at blythe court, dont know how he can sleep at night!
Freeholders view this as a business venture and will have no trouble at all sleeping at night. That why we must have the Parliament look into the system and close all the loopholes with sweeping reform. Voluntary schemes and half measures won’t do it, in the freeholders eye, leaseholders are sheep for the slaughter.
This story is truly scandalous.
I hope the fantastic team at LKP will make maximum usage of this terrible case of abuse to successfully push at the highest level – both in the political sphere and within the legal profession – for radical reform.
Millions of leaseholders will owe them a huge debt of gratitude.
It’s difficult to imagine the kind of financial/emotion impact this would have on a first time buyer like Ms Kenelley, a couple crossing the European Union to find a home like Patrick and Wieslawa Majszykor and worst of all in my opinion, a young family like the Cherry’s who evidently invested time and money into a property that could have become a home for their young daughter, but is now at risk of becoming a millstone around their collective necks.
It might be true to say that Mr Paine and his wife saw this as a business venture, but that surely is no excuse for this kind of blatant exploitation of the leasehold system. Have they misplaced their moral compass?
It is vitally important that Parliament look to complete reform of the leasehold system and address loopholes that are so easy to navigate through. The work of Sir Peter Bottomley has been tireless in this and he should be applauded!
Kudos too, to LKP for all the work they they do on behalf of these unfortunate leaseholders. I feel that It’s important for all future leaseholders to be directed to this forum in order to be better informed of potential hazards. Having said that, I do hope that reforms will take place in the near future. Until then, we should continue to garner as much support as we can.
If the conveyancing solicitors has done a proper job with a proper Report On Title then none of the leaseholders would find themselves in this unfortunate position. What the Paines have done is done but but it is why competent solicitors are should be engaged to detect such pitfalls and to protect their client.
We know in our society events are money driven so Mr Paine is after all he can get,:people choose solicitors on price (not value or expertise ); solicitors often pass such routine matters to their legal executives or conveyancers to act in their practice name since they are cheaper to employ than a qualified solicitor. and solicitors, in turn, go on to protect their position (and pockets) with insurance.
So who is to blame?
Cunning Mr Paine
Less than perfect solicitors.
People who let less competent solicitors “practice” – good word that!
Insurance companies who provide protection against mistakes/incompetence/misfortune or bad judgment.
Or would be home owners who, understandably, want a bargain price and do not or cannot pay for the best?
Perhaps even society for not providing a nanny state?
I do not pretend to know the answer but it is we, you, and I and our elected politicians that have created the society we aspire to live in.. I can only hope that lessons have been learned although for the leaseholder involved it must be a worry to realise that their choices (where to live the solicitor to use) have led to an expensive mistake made as a result of their choices..
I wish them well and hope that head roll.
Chris !!! Well written. It’s the point I tried to make above. We live in a money driven society and people “try it on ” in any type of negotiation or contract. If not for people trying it on ,and if all were honest there would be no need for solicitors in any contract negotiations. The issue highlighted here is clear negligence of the solicitors and had nothing to do with leasehold system. If lawyers won’t read or understand the terms of the deed then their client is doomed. Also under CommonHold system around the word a purchaser purchases a flat with a contract which details service charge expenditure etc. This is also exploited in many parts of the world and unless a lawyer checks these documents a purchaser of such a CommonHold flat could also be exploited. I understand the hunger to knock the leasehold system for political gain and to whip up frenzy against the system ,but this case is not convincing. It’s a case of one party taking advantage over another party over a contract because one party used sub standard solicitors. The fact is that if you check any of these deeds the terms of ground rent are spelled out clearly and it’s beyond belief that solicitors missed this. This case should be a good cause to review the requirements of becoming a solicitor in this country.
Mr Interested, (or Mrs interested?) I find your views offensive. Yes, we do live in a money driven society. Does that mean there should be no laws to protect the vulnerable? Rogue landlords exploiting tenants, by overcharging for substandard accommodation and disappearing deposits? Or Freeholders exploiting leaseholders (who have a few more rights than renters) with hidden clauses, fostering uppon them incompetent managing agents, and hiding behind off shore companies and bully solicitors? Is all this just part of life and if we are not clever enough then we deserve to be exploited?
There are too many people like Interested, which is why voluntary systems don’t cut it. We need to push for radical reform.
Leaseholder, I totally support you regarding how you find views/comments from “Interested” offensive.
There are suggestions in some posts, that it is, in some cases, the purchasers fault.!
There is no way any purchaser should bear the blame here. How can one expect any “ordinary person”, whatever that means, to know they have chosen a “sub standard solicitor”. In general how does the typical buyer know who is a good or bad solicitor.
You have not read my comments. In yiur haste to blame everything on the leasehold system you completely missed the points I made . This blind blame on leasehold system does not help the cause. The issue here is the fault of the lawyers and no one else. This has nothing to do with the faults in the leasehold system. Your cause would be better served if you stick to the real faults in the leasehold system.
Interested, What are the real faults of the system in your view? I agree that the lawyers are also responsible, but I think blaming the buyers for using incompetent solicitors is almost akin to blaming patients for choosing heart surgeons, after their operation went wrong.
We are not blaming everything on the leasing system, but there are suggestions in some posts, inc yours, that the purchaser is partly to blame.
As stated in my earlier comment, and leaseholders, it is totally unacceptable to put any blame on a purchaser when they purchase using a solicitor etc.
Anyway, it would be a shame to go off track on such an important issue so can we please this point.
Interested:
Unfortunately, this is not a case of just one, or possibly two or even three bad solicitors getting it wrong. There have been a whole series of solicitors missing the issue over a number of years. We think at least seven separate firms have found themselves in trouble on just four out of the 12 flats in this development.
The problem is that the deed of variation has been written in such a way that it is far from clear.
Whatever is going wrong has also meant the Paines have ending up owning flats on two occasions and have then sought to sell them at auction for a much higher price.
It cannot be argued it was just a mistake by the draughtsman of the deeds of variation as this has been going on for years.
The first deed of variation we’ve seen goes back to 2007 and the latest was written in 2014. Kadian’s deed falls in the middle and was drafted in 2011.
You say: “The fact is that if you check any of these deeds the terms of ground rent are spelled out clearly, and it’s beyond belief that solicitors missed this.”
I’d say it’s over optimistic for any solicitor to think they would automatically have spotted the problem. Yes, anyone looking at the deed having been told there’s a poison pill in the ground rent would guess. But if nobody tells you, then it is a lot more difficult.
In the case of the auction of flat 1, the legal pack made no mention of an onerous deed of variation. Under “disputes”, it listed no issues; the register provided is incomplete and the landlord’s disclosures states there are no service charge accounts available etc etc.
Since Mr and Mrs Paine, via their various companies, are the leaseholder, the managing agent and the landlord this seems a little odd.
So, yes, the conveyancing solicitors have got things wrong, and Mr Paine is obviously keen to point leaseholders in their direction rather than towards himself and his wife.
The fundamental failure in leasehold legislation for this sort of issue is that it does not seek to limit this type of behaviour.
One thing that jumped off the page during our inquiries was that in two of the sales where the deed of variation was produced it occurred as part of a probate sale, where the deed of variation seems to be dated at the same date as the date of sale.
“The fundamental failure in leasehold legislation for this sort of issue is that it does not seek to limit this type of behaviour.”
Yes that and many other types of behaviour. The creative freeholder will find a way to torture and exort money from the leaseholder. The system needs radical reform to protect us. Minor changes of the legislation, welcome as they are, will not be enough. This happens to be a relatively easy issue to understand, Mr & Mrs Paine got greedy and were caught out.
The conveyancing solicitors must be made to compensate these poor tenants for “professional negligence”. I would suggest that all affected tenants should get together and seek redress from the conveyancing solicitors. There ought to be a law against men like Martin Paine. However, while-ever successive governments allow the perpetuation of this kind of behaviour from landlords, the problem will never cease. The government proudly lays claim to making it easier for people to exercise their Right to Buy the properties they rent, while doing nothing to protect those very people from despicable landlords. Come on David Cameron, show some compassion and do the right thing to stop landlords ripping off leaseholders time and time again. There have been too many cases of landlords treating leaseholders like cash cows. Enough is enough. It’s got to stop and stop NOW.
Gabriella, your comments are heartfelt and I support your thinking, truth is the whole thing is a labyrinth of deceit and corruption. The only glimmer of relief I have seen is that the incompetence of the so called experts of conveyancing appear to have been occasionally exposed, and have been financially punished. Obviously this does not make all the pain go away for those lured into the leasehold web of suffering.
Is Cameron the right man .to appeal to? Does he really care or does it really matter to him? I doubt it. Maybe a high profile celeb with roots in such shenanigans would be a more useful organ to voice the discontent….providing they too haven’t been sucked up into the world of freehold dystopia
There were a few TV shows last year highlighting the issues and dangers of foreigners trying to purchase properties overseas, Thailand especially comes to mind, where of course the language and the alphabet makes it even more difficult than here at home to follow what devious or incompetent solicitors are up to…Well obviously the scandalous behaviour and utter incompetence of so called legal conveyancing professionals is alive and kicking on our shores.
Scenario :
Mr Robin B’stard approaches sales agent to put on the market his leasehold property, that he has the freehold for.
First thing rep of esteemed solictors/estate agents of Dope & Blunder should ask is ; How much is your ground rent as of today?
If they are not satisfied with the lease arrangements regarding the fact that it has been revised but for ground rent purposes it dates back to the year Methuslah was born, then they should say ‘No chance, as we could end up losing our reputation through negligence to the buyer.
This incredulous situation with the Blythe Court flat complex, is not the first time that solicitors have been caught out…surely their professional body has alerted their members not to be sucker punched by such situations.
Is it so difficult for a consumate professional conveyancer not to be able to work out the ground rent from the lease? Calculating the selling value based on what often appear to be spurious details seems to be no problem..nice school nearby, lovely views, excellent shopping blah, blah, blah…all the obvious bunk that prospective buyer can work out themselves.
Moreover how can the revision of a lease in 2015 be permitted to be subject to the demands of when it was originally set up in 1961? This is little short of feudalism.
Perhaps it will not be long before Mr Paine is asked to sponsor a Lease conference?
Yes ME, keeping it on a lighter note, its a wonder Paine hasn’t offered to sell his “scam” to Peverel/Firstport and retired to the Caymen Islands. Oh forgot, have firstport any cash at the moment
Initially, I also ask Mr Paine to act, within the next 7 days, to change the term in his leases and make a proposal to refund overpayments to those affected leaseholders. This simple gesture will dissolve this problem away, and those leaseholders who have not yet reached the date where their ground rent doubles can then sleep easy.
Mr Paine should not underestimate the strength of feeling of injustice that this well reported article has generated, and, if he does not act, will continue to generate.
However, part of me hopes that Mr Paine holds his gound and denies he has done anything wrong and refuses to respond.
This ‘trick of his trade’ is an easy one for people to understand and his failure to act will encourage the formation of an action group of those interested in leasehold reform.
I have never commented on anything before … this is the hotest ‘hot potato’ leasehold story I’ve ever read.
It only came out today … look at the quality of the comments already.
I have little doubt, that due to the publicity Mr Paine will back down and show ‘benevolence. ‘ fairly certain of that. However housing issues cannot be left at the ‘benevolence’ of the freeholder. The law needs to be changed.
Any chance there’s a reader in the area of the aptly named Lower Slaughter? I think it would be a terrific to see some copies of The Sun newspaper distributed if, as appears likely, they will be covering this. LKP, I’d contribute to the cost as I’m sure would other readers.
They say sunlight is a great disinfectant. Mr Paine deserves that his family, his neighbours, and his friends know about his ethics.
Once, a certain kind of people owned slaves. Now they own freeholds.
Paul, no problem, I live in Warwickshire. Give me the papers and I will deliver them myself.
Would be nice to get a group up, go over in a mini bus and deliver in all the Slaughters,
Upper Slaughter etc etc
Trevor, I don’t have papers to distribute but if you buy them and distribute them I will contribute to reimbursement by LKP if others also chip in and if LKP is agreeable (it may not be).
This kind of predatory exploitation of other people needs maximum exposure.
The comments today have been truly amazing. I sincerely hope justice will prevail.
Kadian,
Be assured, you will never be alone in your battle for justice.
Before I start my speech, I’m sorry for my English.It is not perfect but it’s enough to say what he feel. I agree with Kardian That means a lot to us and the comments today have been truly amazing. . We know that we are not alone on this. There are many so many things I would like to change in this flat, but its been two years and I can not do anything about it because I do not know if ‘ll be still here tomorrow . I met the owner of flat no 1. He put all his savings in to the flat (before was a total mess here) now is one of the places where you can just enter by bringing your belongings, but he had to sell the flat as soon as ahe recived a bill for 8k pounds. When I got the bill at 2,800 pounds, I thought( like everybody else ) that this is a mistake. For Two years I asked my lawyers who helped me in buying the flat for help . Two years I have asked my lawyers to help me to solve this problem. At the end I received a message that they can not help me, and I was left alone. Thanks to Kardain, thing started, and within two days was said and done more than in two years thanks to my lawyers. I thank God that he put right people on our way to sow us we are not alone , and if this metter can help people who is having same proplem as we have it’s going to be great 🙂
What about affected leasehold victims setting up a government petition: Petitions – UK Government and Parliament
Or on Change.org
I have forwarded your story to the Gloucestershire Echo newspaper.
Many thanks Jane. Well done. I do not have access to that newspaper so any chance of advising us if/what they publish is much appreciated.
I am in Warwickshire, near Coventry
Trevor – I live in North Warwickshire and would be delighted to pop a copy of The Sun through the letter boxes of the various Slaughter houses. I am sure that the local Lower Slaughter residents are oblivious to the actions of the Paines.
I was reminded today that “The road to Lower Slaughter is paved with indifference”. It seems that many of the former leaseholders of the properties in question have, understandably, been keen to ‘get shot’ of the troublesome gaffs (no pun intended). This has only served to lend motion to the wheel and put wind into the sails of The Bad Ship Paine. This has in turn, allowed the same scam to be repeated and repeated and repeated.
I also note that the online presence of Paine and Paine is virtually zero! That strikes me as rather odd, considering that amount of business interests that have. You would be excused for thinking they have something to hide.
As a collective, the residents (with the invaluable assistance of LKP and their associates) have said, with one clear voice, ‘enough is enough’. That, if nothing else, is a cause for muted celebration this Friday evening.
Before I start my speech, I’m sorry for my English.It is not perfect but it’s enough to say what he feel. I agree with Kardian That means a lot to us and the comments today have been truly amazing. . We know that we are not alone on this. There are many so many things I would like to change in this flat, but its been two years and I can not do anything about it because I do not know if ‘ll be still here tomorrow . I met the owner of flat no 1. He put all his savings in to the flat (before was a total mess here) now is one of the places where you can just enter by bringing your belongings, but he had to sell the flat as soon as ahe recived a bill for 8k pounds. When I got the bill at 2,800 pounds, I thought( like everybody else ) that this is a mistake. For Two years I asked my lawyers who helped me in buying the flat for help . Two years I have asked my lawyers to help me to solve this problem. At the end I received a message that they can not help me, and I was left alone. Thanks to Kardain, thing started, and within two days was said and done more than in two years thanks to my lawyers. I thank God that he put right people on our way to sow us we are not alone , and if this metter can help people who is having same proplem as we have it’s going to be great 🙂
We are all in this together and thanks to LKP and their many patrons we are not alone. All of your comments and support today have been overwhelming and tonight I feel a real sense of change.
So from my heart to all the many posters thank you. Thanks for taking the time to share your views and for joining in our fight.
Is it possible that we have reached leasehold’s Milly Dowler moment?
Leasehold injustices affect a lot more people than were ever affected by phone hacking. It’s a disgrace that it has not received the attention it deserves. The reason is obvious enough. The Conservative Party is on the take from wealthy freeholders (people like Vincent Tchenguiz). The corruption goes all the way to the top. Former chancellor of the exchequer Norman Lamont has been on £1,000/day consultancies (for “advice”) to the Tchenguiz group, which has donated six figure sums to the Tories. David Cameron’s brother in law is a monetising freeholder.
The lives of millions of people are blighted by this corrupted, antiquated institution. It has been abolished everywhere that inherited it from English common law, except in England and Wales.
Australia, America, South Africa, Hong Kong, Scotland, Ireland. Canada etc. GONE.
The hypocrisy of the Conservatives pretending to be the party of aspiring home owners is breathtaking. This is the party, let’s not forget, of duck houses and moats. They need to remember
“Those who make peaceful revolution impossible will make violent revolution inevitable.”
–John F Kennedy
Could it be that apart from political donations (to any party) one key reason for stopping leasehold reform is the exposure of banks to loans granted to freeholder/connected managing agents? After all, was it not the Tchenguiz family trust portfolio, that not only was overvalued, but was securitised against a 150 year income stream?
Suppose for a moment the true value of freehold portfolios if sold to leaseholders was 40% of the funds borrowed? What effect would that have on the lending institutions?
Rumour in the city suggests that one high profile bank may be exposed to upwards of 63billions of property related loans.?
By holding off on leasehold reform, debts can be kept of the balance sheet. Very useful if you are a government that wants to sell off a bank!
Simply disgraceful!!!!! They should be ashamed of themselves and their greed…I sympathised with the flat owners, hopefully you guys will get some justice!
It should always be remembered that long leasehold tenure was created by freeholders for freeholders.There are 4 main areas of a lease that allow for profit to be made: those of buildings insurance, ground rent ( as in this story), lease extensions and various consents that have to be obtained from the freeholder.
The conveyancing solicitors acting for the buyers should have spotted the ground rent provisions even if the lease was of considerable length as the reliance of them to get things right is a heavy one. They all have to be read through fully to spot such things, particulary those written before 2006 which are usually written in legalise (with no punctuation) and may be as many as 50 pages in length!
I’m not sure it is does a lot of good imploring those that utilise the profit making elements of a lease to its full advantage to ‘do the right thing’ because in their eyes, they have done so, by operating within the terms of what the lease allows them to do.
There will be undoubtedly be more stories of this type, despite the continued efforts to ensure that prospective leaseholders get as much information during the conveyancing process as possible. It must be understood that the long lease (bottom line) is a money making document for freeholders and it is vitally important that the type of freeholder a block of flats has is never overlooked.
Sharon
You say that it is not worth imploring those who are profiting from this situation to do the right thing.. Because they are operating within the terms of the lease. More likely reason is they will not care.about the harm they do.
Will it not be a similar type of people who with some devious solicitors, drew up this odious lease in the first place.
They must know full well that their lives of luxury are being funded by leaseholders who are having their lives ruined.
They should receive a long ban from operating in the Leasehold industry, as they would be in many other professions, if they caused harm to society like this.
.
Just checking the type (reputation) of freeholder is no guarantee of ethical behaviour in the long term. There has been a well established pattern of behaviour in the industry of transferring freeholds to associated companies done in such a way and for the sole purpose of denying leaseholders right of first refusal to acquire the freehold.
The leaseholder is powerless to prevent a freeholder selling out to a diabolical monetising landlord — the kind who pay over the odds for freeholds because they have a well developed repertoire of creative ways of getting their money back and earning above normal returns with little risk to their capital.
Very well put Paul Joseph. This has been my experience also. Leasehold needs strict regulation/ radical reform, rather than leaving it, to the freeholders philanthropic tendencies.
This case is reminiscent of the Peter Rachman scandal in the 1950/60s, that became known as Rachmanism … [REDACTED]
Wholeheartedly agree with you. Criminal legislation for white collar fraud and change.org for leasehold reform. The difficulty is coming up with sufficiently sweeping reform to actually make a difference. For reporting solicitors there is the SRA, though not sure if they actually ever do anything.
Looking at the Land Registry’s register of title to flat 7 it is curious that the Property Register, showing short particulars of the property and of the lease, is silent as to the Rent. Such titles would usually read something like, “Rent: as therein mentioned”, not as in this particular title, “Rent : — “.
Relief for Kadian must begin with a claim against her former solicitors. Her mortgagees’ valuation report would probably have been qualified on the assumption that the lease did not contain unusual or onerous provisions. Kadian might suggest to her mortgagee that the valuer should be asked to re-value the flat after reading the lease and understanding the ground rent terms.
The mortgagee should take an interest when it is realised that its security is not worth what was previously believed and its solicitors (perhaps the same solicitors acted for Kadian and her mortgagee) will be required to explain how they were able to certify that a good and marketable title was being acquired.
Yes, it is a mess but there is hope and Kadian is assured of sound advice and support from LKP, its patrons and admirers. There must be specialist solicitors taking an interest and ready to act on a conditional fee basis?
Sharon Crossland in her comment above states: “..it is vitally important that the type of freeholder a block of flats has is never overlooked.”
And this is a central point. There are good freeholders and there are bad freeholders. Milking vulnerable leaseholders has become a game for the baddies out there, and Ground Rents, Informal Lease Extensions, and Buildings Insurance, along with a host pf dodgy “fees” for various, are the tools of the trade for this unscrupulous bunch.
And so long as they remain unregulated they will continue without let or hindrance.
These people are utterly ruthless in pursuit of their ill-gotten gains and, aided and abetted by unprincipled legal advisers, they customarily ignore bad publicity and continue unabated..
Only proper regulation of the leasehold sector will root these practices out.
Paul J, Stuart R and Leaseholder,
I could not find any articles in Saturdays press so I did not do my paper round
If you do want to contact me Sebastian O’K has my e mail
Mr Martin Paine, of Circle Residential Management, Chapel Court (Tewkesbury) Management, Mercia Investment Properties Limited, Kirmond PP Investments, Malvern Court Management … and many others undoubtedly.
A reoccurring pain at the Leasehold Valuation Tribunal. It’s a wonder he has not been allocated his own parking space.
This is what Martin Paine does. Extortionate charges through any method available to him.
In one Tribunal case, Circle Residential Management (aka Mr Martin Paine) representing Mercia Investment Properties (aka Mr Martin Paine again), failed to justify to the Tribunal why he wanted a leaseholder to pay £4,000 to grant consent for an extension. This was after charging the leaseholder £115 for administrative consent, wanted an additional £4k. The tribunal said no and Mr Martin Paine was sent on his way.
If any one of Mr Paine’s property management companies manages your leasehold flat, you can be sure to expect extortionate service charges.
What has happened here is most unfortunate, but sadly not surprising giving the individual involved.
Well done to LKP for this exposure. It has been a long time coming.
Let’s give Mr Martin Paine the much needed exposure and reviews he truly deserves. Let’s ensure that this story remains in a prominent place under Google Search.
Everyone commenting on this article, please state his full name (Martin Paine) when making reference to him and do so as many times as possible, so that Google continues to pick it up. Also, please use the word ‘review’ wherever possible. Keep Martin Paine on the front page.
Resident’s featured in this article and all others reading this article who have been personally been affected by Martin Paine, send your story to BBC Watchdog.
https://ssl.bbc.co.uk/programmes/b006mg74/contact
For those not personally affected, but feel the great injustice, please contact Watchdog and urge them to investigate Mr Martin Paine. Their email is watchdog@bbc.co.uk. You can forward them the link to this story to read. Let’s apply the pressure.
Everyone, both the affected and unaffected, please email Daily Mail. Those directly affected, tell them your story, those unaffected, again forward the link and urge them to investigate. Their email is news@mailonline.co.uk
I have already done so. Please join me.
Information obtained from “companycheck” figures as of today
All of the companies are registered at the same address in
Leckhampton, Gloucestershire.
Circle Residential Management Ltd. Comp No 05131646
Owned by Martin Paine & Margaret Anne Kirmond
Dirctr Martin Paine. Secretary Ms Margret Anne Kilmond
Net Worth £1.2K
F.t.z Ltd. Comp No 04010802
Owned by Margret Ann Kirmond (aka Mrs Margaret Anne Paine)
Dirctr Martin Paine. Secretary Martin Paine
Net worth £1.1M
Mercia Investment Properties Ltd. Comp No 03287391
Owned by F.t.z Ltd. (Martin Paine’s wife)
Dirctrs F.t.z Ltd & Martin Paine
Secretary Ms Margaret Ann Kilmond (aka Mrs Margaret Anne Paine)
Net Worth £2.1M
Meryon Properties Ltd. Comp No 06805418
Owned by F.t.z Ltd. (Martin Paine’s wife)
Dirctrs F.t.z Ltd & Martin Paine
Net worth £380K
Martin Paine & his wife also have approx. 9 other companies with their
names against but they are either dormant, dissolved or whatever.
Martin Paine certainly appears to do a lot of ducking and diving
Sorry, Circle Residential Management Ltd should read Net Worth of £1.1M
Can admin amend my error by any chance and then delete this post
Many thanks
No matter how many observations are made with regard to this situation, the long lease was designed by freeholder for freeholders, hence the money making elements contained therein.
Making unreasonable amounts ofmoney from leases is in direct opposition to the fundamental right of leaseholders, that of ‘reasonableness’ but how do you balance this with the right to make a profit, however obscene this may be and something the lease allows to occur?
From my own perspective of working for the Directors of the RMC that own the freehold of the block of flats in which I live, any money made from the areas of the lease that allow this are ploughed straight back into the building, enhancing the value of the interests of all who own a flat here (and this includes ‘rogue landlords of which we have a number).
LKP are doing a great job of highlighting abuses within the leasehold sector but perhaps they should be putting as much effort into promoting Commonhold?
Hi,
I just heard about this on R4.
Can I suggest the flat owners set up a FB page and twitter account?
It would be easier to alert more people (esp in Birmingham) and gain support. I will share widely with my friends for sure.
Just reading this and I am totally disgusted by the behaviour of these two high-way robbers. I think they need to be exposed on a current television programme maybe Inside Out BBC?
This is a real eye opener.
My sympathies to all involved.
Just reading this and I am totally disgusted by the behaviour of these two high-way robbers. I think they need to be exposed on a current television programme maybe Inside Out BBC?
This is a real eye opener.
My sympathies to all involved.
Do you have the right to manage?
The right to manage was granted in a change to leasehold law in 2002 for blocks with at least two flats. It enables leasehold owners, who generally hold the majority of value in the property, to take responsibility for the management of their block.
The process is simple and usually costs about £500. The landlord or freeholder’s consent is not required, but notice must be served on the freeholder. The right to manage company must then appoint a managing agent with professional indemnity insurance to act on their behalf. To find out more about right to manage, visit the Leasehold Advisory Service website at: lease-advice.org, or call 020 7374 5380
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-1611394/Fight-back-against-rogue-freeholders.html#ixzz40FKpLLnC
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The right to manage (RTM) info is welcome though it doesn’t help with a ground rent problem caused by a monetising freeholder.
We obtained RTM at our development a few years ago and promptly had to put service charges up as we undertook repairs to the fabric of our building which had gone to rack and ruin in the care of the landlord and his own managing agent.
All they were ever interested in was in charging as much as possible for the least amount of effort; and given a commission based management fee it was in their interest to cause large repair bills.
Our bills will eventually go down. However, we remain vulnerable to various other kinds of monetisation by the freeholder. The tricks pulled by or on behalf of someone who owns one half of one percent of the equity in the building to maximise income, which is then sent to entities in the Carribbean, never cease to amaze.
Leasehold remains a cesspit of corruption, double-dealing and predatory behaviour. It is not just tolerated, it is effectively condoned by the Conservative party which prefers to look the other way and which recently lobbied the EU PRIVATELY to exempt Bermuda and the British Virgin Islands from crackdowns on tax havens which it called for PUBLICLY.
The continuing refusal to legislate reform may lead in the end to change at the point of a pitchfork, and, if so, when it happens there will much gnashing of teeth and wondering why LKP, Campaign against retirement leasehold exploitation and others weren’t listened to earlier.
Far fetched? Popular frustration with growing inequality and with rigged markets and political systems is growing globally and it WILL boil over in the West eventually if nothing is done (That which is unsustainable tends in the end to be unsustained, and all that).. Smart capitalists like Nick Hanaeur have been saying it for some time.
Who said:
There is no prouder word in our history than “freeholder”.
It was Margaret Thatcher. I don’t think she had the kind of monetising freeholder whose exploitative behaviour has been documented here in mind. Time for the Conservatives to wake up and smell the commonhold before the tumbrils arrive — or maybe just because it’s the right thing to do if they’re capable of acting on that.
A very interesting comment. I personally agree with you: public confidence in the free market being remotely fair is at the lowest ebb I have ever known it.
This is a view common to the young, who have material grounds to feel it, and the old, who don’t being the richest pensioners ever, but have the age and experience to know that things should not be like this.
The National Crime Agency figures from the Land Registry on offshore owned property assets beggars belief. Property Week’s crunching the figures to reach a total of £263 billion of commercial and residential assets held offshore is astonishing (echoed by Private Eye, which has a slightly lower figure).
The British are utterly mad to put up with this nonsense, especially when many of own fellow citizens are unlikely to be property owning at all.
The view that the market is basically rigged against the small, middle and the comfortable but not that comfortable is widespread.
It has been addressed in highly disillusioned terms by the irreproachably conservative Charles Moore, the biographer of Margaret Thatcher.
The rebellion against inequality and rigged markets and politics is growing. It’s covered in The Week with respect to Donald Trump’s supporters here: http://theweek.com/articles/605312/conservatives-have-failed-donald-trumps-supporters. I think it’s relevant to the Conservative establishment on this side of the Atlantic too. It’s sleepwalking toward the cliff.
Bernie Sanders supporters look like outmatching Hillary’s Wall Street donors and are overwhelmingly younger. His agenda will outlast his candidacy whatever the outcome..
Reform, including reducing the ability of rich to buy elections, rig markets and hide wealth in tax havens, cannot be put off indefinitely.
When reform is refused for long enough the correction ends up being explosive.
Would the charities here be happy to associated with such a company and appear on their website? Has anyone contacted the charities?
http://www.circlemanagement.co.uk/charitable-support.html
Macmillan Cancer Support
Starlight
Comic Relief
Sue Ryder
Children in Need
Breast Cancer Campaign
Winston’s Wish
Scoo-B-Doo
Goedgedacht Trust
British Red Cross
Canine Partners