The National Leasehold Campaign organised an email dump yesterday urging developers and investors in freeholds to either sell the freeholds of leasehold houses at the price originally promised or vary aggressive ground rents.
The aim was to urge developers and freeholders to follow Persimmon and Aviva, who last week settled up after the mis-selling and breach of consumer law investigation held by the Competition and Markets Authority.
The NLC initiative landed on in the inboxes of CEOs from 9am yesterday morning:
The following were among the recipients:
Freehold Managers plc
David Thomas, CEO of Barratt
E and J Estates
Chris Endsor, CEO Miller Homes
Paul Crook, MD Mainstaygroup
Jason Honeyman, CEO Bellway
Rob Perrins, CEO Berkeley Group
Estates & Management
Countryside Properties plc
Ground Rents Income Fund, Schroders
Claycourt Ltd (Nationwide pension fund)
Weathercourt Ltd (ditto)
Homeground (Long Harbour)
The emails were copied in to local MPs.
Countryside Properties plc’s head of legal informed several leaseholder correspondents that Countryside Properties plc had not been found to have mis-sold properties.
This is correct. The CMA is investigating Countryside Properties plc for “using possibly unfair contract terms”:
“The CMA has now written to Countryside and Taylor Wimpey outlining its specific concerns that their use of terms that double the ground rent every 10 or 15 years breaks consumer protection law.”
Thank you for your email of 30 June 2021. In view of the concerns you’ve raised about the lease terms of XXX, I’ve been asked to review the matter and respond on behalf of the Nationwide Pension Fund.
It might help to allay your concerns if I explain that in 2018 when this issue came to light, the Pension Fund Trustees agreed that when the lease review becomes due, they would apply the lower of compounded RPI for the 15 year period or the contractual doubling. Please also note that no doubling rent review has ever been implemented by the pension fund, although I understand this will not be reflected in your legal terms, hence your email.
Please can I make you aware that the pension fund does not own the freehold for your property as this is owned by your local council, so we would be unable to sell this to you. However, we could vary the terms of the lease via deed so that it removes the doubling clauses and becomes linked to RPI instead, although we would need you to contribute £250+VAT towards our third party legal and administration costs in making this variation. If this is something you’d like to consider please let me know and I can help you with the necessary arrangements.
Prior to deciding whether or not to proceed on this basis, it may be worth you contacting Countryside, https://www.countrysideproperties.com/contact-us, to get their assistance in line with their pledge as they may meet this cost and your own legal costs in this regard?
It’s also worth noting that the Nationwide Pension Fund is a separate legal entity to Nationwide Building Society, with the Society having no involvement in the fund’s individual investment decisions.
I’m sorry you’ve had cause for concern and I hope this information has helped explain things more clearly. However, please feel free to respond directly to me if you need further assistance.
Chief Investment Officer
Nationwide Pension Fund