• Menu
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Before Header

  • Home
  • What is LKP
  • Find everything …
  • Contact
Donate

Leasehold Knowledge Management Logo

Secretariat of the All Party Parliamentary Group on leasehold reform

Mobile Menu

  • Home
  • What is LKP
  • Find everything …
  • Contact
  • Advice
  • News
    • Find everything …
    • About Peverel group
    • APPG
    • ARMA
    • Bellway
    • Benjamin Mire
    • Brixton Hill Court
    • Canary Riverside
    • Charter Quay
    • Chelsea Bridge Wharf
    • Cladding scandal
    • Competition and Markets Authority / OFT
    • Commonhold
    • Communities Select Committee
    • Conveyancing Association
    • Countrywide
    • MHCLG
    • E&J Capital Partners
    • Exit fees
    • FirstPort
    • Fleecehold
    • Forfeiture
    • FPRA
    • Gleeson Homes
    • Ground rent scandal
    • Hanover
    • House managers flat
    • House of Lords
    • Housing associations
    • Informal lease extension
    • Insurance
    • IRPM
    • JB Leitch
    • Jim Fitzpatrick MP
    • John Christodoulou
    • Justin Bates
    • Justin Madders MP
    • Law Commission
    • LEASE
    • Liam Spender
    • Local authority leasehold
    • London Assembly
    • Louie Burns
    • Martin Paine
    • McCarthy and Stone
    • Moskovitz / Gurvits
    • Mulberry Mews
    • National Leasehold Campaign
    • Oakland Court
    • Park Homes
    • Parliament
    • Persimmon
    • Peverel
    • Philip Rainey QC
    • Plantation Wharf
    • Press
    • Property tribunal
    • Prostitutes
    • Quadrangle House
    • Redrow
    • Retirement
    • Richard Davidoff
    • RICS
    • Right To Manage Federation
    • Roger Southam
    • Rooftop development
    • RTM
    • Sean Powell
    • SFO
    • Shared ownership
    • Sinclair Gardens Investments
    • Sir Ed Davey
    • Sir Peter Bottomley
    • St George’s Wharf
    • Subletting
    • Taylor Wimpey
    • Tchenguiz
    • Warwick Estates
    • West India Quay
    • William Waldorf Astor
    • Windrush Court
  • Parliament
  • Accreditation
  • [Custom]
Menu
  • Advice
  • News
      • Find everything …
      • About Peverel group
      • APPG
      • ARMA
      • Bellway
      • Benjamin Mire
      • Brixton Hill Court
      • Canary Riverside
      • Charter Quay
      • Chelsea Bridge Wharf
      • Cladding scandal
      • Competition and Markets Authority / OFT
      • Commonhold
      • Communities Select Committee
      • Conveyancing Association
      • Countrywide
      • MHCLG
      • E&J Capital Partners
      • Exit fees
      • FirstPort
      • Fleecehold
      • Forfeiture
      • FPRA
      • Gleeson Homes
      • Ground rent scandal
      • Hanover
      • House managers flat
      • House of Lords
      • Housing associations
      • Informal lease extension
      • Insurance
      • IRPM
      • JB Leitch
      • Jim Fitzpatrick MP
      • John Christodoulou
      • Justin Bates
      • Justin Madders MP
      • Law Commission
      • LEASE
      • Liam Spender
      • Local authority leasehold
      • London Assembly
      • Louie Burns
      • Martin Paine
      • McCarthy and Stone
      • Moskovitz / Gurvits
      • Mulberry Mews
      • National Leasehold Campaign
      • Oakland Court
      • Park Homes
      • Parliament
      • Persimmon
      • Peverel
      • Philip Rainey QC
      • Plantation Wharf
      • Press
      • Property tribunal
      • Prostitutes
      • Quadrangle House
      • Redrow
      • Retirement
      • Richard Davidoff
      • RICS
      • Right To Manage Federation
      • Roger Southam
      • Rooftop development
      • RTM
      • Sean Powell
      • SFO
      • Shared ownership
      • Sinclair Gardens Investments
      • Sir Ed Davey
      • Sir Peter Bottomley
      • St George’s Wharf
      • Subletting
      • Taylor Wimpey
      • Tchenguiz
      • Warwick Estates
      • West India Quay
      • William Waldorf Astor
      • Windrush Court
  • Parliament
  • Accreditation
You are here: Home / Latest News / Martin Paine, embedded management companies, LKP … all raised in Queen’s speech debate

Martin Paine, embedded management companies, LKP … all raised in Queen’s speech debate

May 19, 2016 //  by Sebastian O'Kelly

These issues were raised by Sir Peter Bottomley in the Queen’s Speech debate yesterday

Let me turn to other issues that come up for Back Benchers. I pick up causes, one of which came about as a result of an incident in my constituency regarding leasehold, when some elderly, frail and poor people found themselves paying for something they should not have paid for. They tried to go to the lower-level property tribunal, but found that those representing the freeholders managed to spin the issue between different courts, keeping the case away from low-cost dispute resolution. With the help of the Bar pro bono unit, it took one barrister one day to cut through all that, and my elderly people were paid a rebate of £70,000 without further court action.

That case led me to meet people in Leasehold Knowledge Partnership, now a charity, which was created, and is mainly supported and led, by Martin Boyd and Sebastian O’Kelly, who I think give more advice to more leaseholders in trouble than most people who do the same thing professionally—and they do it without pay. What they have achieved is remarkable.

We need to respond by making sure that Parliament recognises the 6 million residential leaseholders in this country, who can often find themselves exploited. Why is it that people who buy a retirement flat find that when they try to sell it, or their executors do so after they have died, it is worth so much less? There is something wrong with the system. As it happens, the Chancellor loses out because lower property values mean that less is obtained through stamp duty when new buyers come in.

Another problem is caused by court-created law. I cannot explain this issue off the cuff because it goes beyond me, but I can refer to a recent upper tribunal lands chamber decision, whose neutral citation number for 2016 is UKUT 0223 (LC), case Nos. LRA 20, 21 and 35/2015. The case was between the trustees of the Sloane Stanley estate and Adrian Howard Mundy; between the trustees of the Sloane Stanley estate and Arnaud Lagesse; and between Sophie Nathalie Jeanne Aaron and the Wellcome Trust Ltd. A decision of 160-odd clauses was reached about the value that applies when people are trying to get a leasehold extension.

We all know that George Thomas—Lord Tonypandy—a former Speaker, came to public notice when he fought for leasehold rights for south Wales residents. We now need to do the same thing again. As I understand it, the judgment has transformed the valuations of expiring leases. No consideration was undertaken in Parliament, yet this upturns what was believed to be the way to approach these valuations for the last 10 years, so it is time that we got Departments—whether that is the Ministry of Justice or the Department for Communities and Local Government—to come together and, perhaps after putting it before a Select Committee first, assess whether Parliament needs to take formal action on this issue. Otherwise, we are letting a judgment go forward regarding three cases that have been argued by lawyers at great length in a way that few of us would understand. Indeed, I challenge most people to look through the document and find the actual judgment—I tried to do so in 10 minutes but could not; it took me 20 minutes. This is wrong.

When it comes to leasehold, we need to say what is right, what is wrong and what we can do about it. Martin Paine has interests in leasehold at a different scale—not the high-value area. That relates to the Wellcome Trust buying the Henry Smith properties and turning them into an investment trust. The Wellcome trustees should start looking to see whether what they have done is fully justifiable. I am not making an accusation, but asking for their interest.

Returning to the Martin Paine issue, it applies where a young person or couple buy a low-valued flat and have the lease checked by their lawyers, but later on discover that Martin Paine has informally rewritten the terms of the lease—extending it but, for example, doubling the ground rent every 10 years. That situation might be difficult in itself, but the greatest difficulty comes from the way the lease is written, as lawyers do not normally spot that the ground rent has been doubled back to the time when the lease was originally granted.

Let us say the lease was originally granted in 1959. The first ground rent demand could be not the expected £15 but, say, £2,000. That would mean that the rent would increase to £4,000 in 10 years’ time, and then later to £8,000, £16,000 and so on, so the flat becomes worthless. I understand that if enough fuss is made or enough publicity issued, Martin Paine will offer to buy the property back. He sometimes appears to remarket it without drawing the attention of the potential auctioneers or the potential purchasers of what those buying it will be letting themselves in for.

It is not for me to judge whether that is criminal, but doing this on an organised basis certainly demands attention. I ask the Competition and Markets Authority, the Office of Fair Trading or the police to check this and stop it. I warn the solicitors that their indemnity societies mean that they should be looking to see why this is going on.

I could provide a number of other examples that I would not suggest are necessarily criminal, but they are certainly odd. I mention embedded management companies, and I would ask some of the major developers to check whether there are clauses in their leasehold agreements that make clear the right of leaseholders to come together to buy their properties or to take over the management company. They need to make sure they are effective, and if they are defective, they should be made to put it right at their own cost. We should not ask the victims to pay all the costs and take all the risks—especially of going to court—to get things put right.

Related posts:

Martin Paine demanded ground rents of thousands from two London leaseholders LKP meets Roger Southam and Taylor Wimpey over embedded management companies Southam sells Chainbow to Savills, so who owns the embedded management companies now? Default ThumbnailShould the chairman of the Leasehold Advisory Service be the owner of embedded management companies? Spreading Paine: the freeholds owned by Martin Paine and his wife (Margaret) Anne Kirmond

Category: Latest News, Martin Paine, News, ParliamentTag: Martin Paine, Sir Peter Bottomley

Sign up to the LKP newsletter

Fill in the link here

Latest Tweets

Tweets by @LKPleasehold

Mentions

Anthony Essien (34) APPG (44) ARMA (91) Benjamin Mire (32) Cladding scandal (71) Clive Betts MP (33) CMA (46) Commonhold (56) Competition and Markets Authority (42) Countryside Properties plc (33) FirstPort (55) Grenfell cladding (56) Ground rents (55) Israel Moskovitz (32) James Brokenshire MP (31) Jim Fitzpatrick (36) Jim Fitzpatrick MP (31) Justin Bates (41) Justin Madders MP (75) Katie Kendrick (40) Law Commission (61) LEASE (68) Leasehold Advisory Service (65) Leasehold houses (32) Liam Spender (39) Long Harbour (51) Lord Greenhalgh (32) Martin Boyd (87) McCarthy and Stone (43) National Leasehold Campaign (42) Persimmon (49) Peverel (61) Property tribunal (49) Retirement (38) Robert Jenrick (33) Roger Southam (47) Sajid Javid (38) Sebastian O’Kelly (67) Sir Peter Bottomley (211) Taylor Wimpey (106) Tchenguiz (33) The Guardian (33) The Times (34) Vincent Tchenguiz (45) Waking watch contracts (40)
Previous Post: « Southam surrenders control of Mulberry Mews
Next Post: Leasehold law – the first real changes in 14 years? »

Reader Interactions

Comments

  1. Alec

    May 20, 2016 at 7:36 am

    “It is not for me to judge whether this is criminal but doing so on an organised basis certainly demands attention…I warn the solicitors that their indemnity societies mean they should be looking to see why this is going on.”
    Sir Peter Bottomley as above.
    Example 1::
    “In consideration of the assumption by the Transferee from the Transferor of indebtedness in the amount of £……………….and the issue by the Transferee to the Transferor of £100 Ordinary Shares of £1 in the Transferee issued as fully paid and at a premium of £399 per share the receipt of which is hereby acknowledged. ”

    Example 2:
    “upon completion of the matters referred to in clauses….the Buyer will pay the balance of the consideration and procure that the Target repays the “Intra Group Debts” to the Seller’s solicitors.”

    …On completion the Seller shall deliver to the Buyer

    …a receipt from the Seller in respect of payment of the “Intra Group Debts” subject to receipt of the value of the Intra Group Debts from the Buyer in accordance with clause …”

    There are criminal sanctions for a failure to comply with the duty imposed by s3A of the LTA 1985…..where there has been a contravention of the provisions of the Act [by failure to issue a s5 notice or contravention of any provision of the LTA 1987}.

    The Housing ct 1996 made it a criminal offence for any freeholder to sell the freehold interest to an unrelated buyer without first offering qualifying long leaseholders the right of first refusal.

    There is a hardcore of individuals/companies continuing to act criminally in this “market” and who do so with impunity, aided and abetted by equally unscrupulous solicitors and counsel.

    The usual arrangement to avoid the LTA 1987 is to transfer the land to an associated company, and then sell the shares to an unrelated buyer. This involves
    [1] creating the associated company
    [11] transferring the land to the associated company.
    [iii] transferring the shares in the associated company[now owning the land] to the unrelated buyer.

    Clearly there is not much trust among thieves as the above examples show. Thus, where a freehold seller enters into an agreement with an unrelated buyer to transfer to that buyer the shares in the associated company and agrees to transfer the land conditional on and only on the purchase of the shares [with built in “Intra Group Debt” style clauses to cover the land purchase price], the freehold seller is holding the shares in the associated company as a fiduciary [agent] for the unrelated buyer and as a result the “transfer” is not to an associated company

    Put simply, it is criminal.

    This is the organised basis and method whereby sellers collude with buyers to offload portfolios without the knowledge of qualifying leaseholders.; a business that usually revolves round property leases nearing the 80 years remaining. mark.

    …and it is this criminal activity that then enables the wholesale racket that is the informal [or formal] lease extension business that follows.

    Caught up in all of this are 1,000’s of unwary leaseholders, whose only mistake was to wake up one morning to discover the freehold title to their premises had been taken over by a bunch of gangsters..

    Qualifying long leaseholders are entitled [and remain entitled] to procure the freehold interest on the same terms as paid by an unrelated buyer [s3A LTA 1985] and the conduct of certain solicitors and counsel in aiding and abetting this criminal activity must be highlighted and exposed, as it is both improper and negligent

Above Footer

Advising leaseholders. Avoiding disasters.
Stopping forfeiture. Exposing abuses. Urging reform.

We depend on individuals for the majority of our funding.

Support Us and Donate

LKP Managing Agents

Become an LKP Managing Agent

Common Ground
Adam Church
Blocnet property management2

Stay in Touch

To achieve victory in the leasehold game where you are playing against professionals and with rules that they know all too well - stay informed with the LKP newsletter.
Sign Up for Newsletter

Professional Directory

The following advertisements are from firms that seek business from leaseholders.
Click on the logos for company profiles.

Barry Passmore

Footer

About LKP

  • What is LKP
  • Privacy and data

Categories

  • News
  • Cladding scandal
  • Commonhold
  • Law Commission
  • Fleecehold
  • Parliament
  • Press
  • APPG

Contact

Leasehold Knowledge Partnership
Open Data Institute
5th Floor
Kings Place
London N1 9AG

sok@leaseholdknowledge.com

Copyright © 2025 Leasehold Knowledge Partnership | All rights reserved
Leasehold Knowledge Partnership Limited (company number: 08999652) is a company limited by guarantee that is a registered charity (number: 1162584) with the Charities Commission.
LKP website is hosted at www.34sp.com
Website by Callia Web