The government would like to know if you have onerous lease terms as part of an information gathering exercise.
You have until the 15th June to email your comments to onerouslease@communities.gsi.
The government will not be responding to each email but may contact you for further information. The purpose of asking for information is to help better inform officials about how the market for onerous leases has developed over the years to help them “identify what can be done to stamp out abuses”
This is an information gathering exercise rather than a survey so you can supply whatever information you feel is relevant (but please keep it short). We would suggest the following may be relevant:
1) Your Name
2) The Postcode for your property
3) Is it a flat or house?
4) Did you buy your home new or second hand?
5) How much did you pay for your property?
6) What was the name of the developer you bought it from?
7) If you bought it new, did you use the developers recommended solicitor?
8) How long was the lease when first granted (e.g 99years 125 years)?
9) How much was the ground rent per annum at the start of the lease (not the service charge)?
10) How often does the amount of the ground rent increase (eg every 10 years)?
11) Does the rate increase by RPI or does it double?
12) Are there any other terms that make your lease onerous e.g permission or administration fees?
13) Have you tried to sell your home and found the onerous lease terms has impacted your ability to sell?
14) Has the freehold of your site been sold to someone else and if so who is your freeholder now?
15) Were you offered the chance to buy the freehold before it was sold to a third party?
16) Have you been offered the chance to vary your lease terms by the freeholder? If you have already done so how did your lease terms change?
When you send in your email the following automatic message will be returned:
Thank you for your email. This is an automated response to all emails received by onerouslease@communities.gsi.gov.uk.This email account will be live until 15 June 2018.
The Government is committed to reforming the leasehold market so it is fairer and more transparent, and provides greater choice for home-owners. We are keen to hear from existing leaseholders with onerous leases where, for example, ground rents double every ten years.
This will help us understand the ongoing issues consumers are experiencing so that we can identify what more can be done to stamp out abuses. We are not conducting a survey and we will not be publishing any details that you give us. We will treat your data in accordance with our Personal Information Charter found here: https://www.gov.uk/government/organisations/ministry-of-housing-communities-and-local-government/about/personal-information-charter
We are not able to comment on your particular case. However, we will work with partners to keep you informed on the Government’s actions on leasehold reform going forward.
If you would like to know more about the Government’s plans to reform leasehold, you can read the Minister’s Written Ministerial Statement which sets out our plans here: https://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2017-12-21/HCWS384/
Thank you for taking the time to share your experience with us.
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To determine whether a ground rent is onerous it needs to be considered in the context of the premium paid for the lease and the market value of the property if it had a nil rent
If a ground rent of £8000 per annum linked to the RPi was imposed on a flat many might think that is onerous .
If the flat would sell for £300k with a peppercorn rent then the £8k ground would indeed be onerous if the premium sort was £300k but not onerous if the premium sort for the same flat was £50k
Again I make the point that if the Net Present Value of the rent is shown next to the premium sought for the lease then purchasers could make an informed choice . The discount rate set by the government on a regular basis
Stephen your formula only works if the market works in an economically rational way. What the market shows is that we often have both high ground rents and high premiums. The supply side of the sector is keen to suggest there is some form of discount in the premium as the result of selling leasehold. However, the data shows that we sometimes have developers selling leasehold houses on the same sites as freehold houses where there is no discount in the premium for leasehold despite the existence of a ground rent and all the other potential costs associated with a leasehold purchase.
The purpose of this survey is for people to report what they feel is onerous.
Stephen- You and other property professionals like Roger Southam of LEASE see property as an investment and leaseholders as a meal ticket. Nothing suits you better than to double ground rents and apply unaccountable rip off service charges. Leasehold law is out of date and works against the consumer. Time for abolition.
Whereas homeowners just want to enjoy their homes with their families and be free from the constant fear of legally robbery by clever property professionals.
Stephen,
You are correct to say that if a discount provided there might be a right to demand a higher ground rent premium. However, we have no evidence to suggest that we are seeing £300K flats sold for £50K.
There is, in fact, no evidence of any discount being offered in many newbuild house sales as a result of them being sold as leasehold. In some cases, we even see a premium over the equivalent freehold home
If purchasers don’t reflect the ground rent terms in their offer for a property then I don’t see the logic of those who believe they should be abolished. Unless of course the contract terms are unfair due to calculation of the rent in future years
Again I make the point that if the NPV of the rent is shown next to the premium in the prescribed clauses of the lease then a purchaser can clearly see and appreciate the cost implications of the ground rent
As a ground rent is in effect repayments on a. Discount ie a loan then the granting of terms outside of the act on lease extentsions should be governed by the Consumer Credit Act and the abuses highlighted by Louis Burns would never have arisen
What about a lease with blanket prohibition to sublet – needing to pay multiple £Ks for a variation, and them courts leaving th door open to anual sublet renewal consents? Freeholders happily hoover up the profit.
What about leases that prohibit any maiming or cutting etc which means anything could be classed a breach – even hanging a picture or a TV? All in the gift of freeholders to decide to maximise profit.
What about Stephen regularly of this Manor letting others have an opposite view on what is an onerous lease?
All leases are onerous I say, creating feudal Lords over modern home buyers.
I’m outraged too, just like the Minister. I hope this is not yet another consultation period before we see any actual reform bill. The leasehold parrot is dead. Honest.
Will do this now! Thanks LKP!
I thought the government had said they were going to abolish ground rent, so why is it being discussed with calls to evidence yet again.
MPs are not elected to represent vested interests like Lord Stephen and the overseas trust funds that legally rob leaseholders.
Of course I will fill in another form but it probably won’t have as much weight as Lord Astor, Tchenguiz,Taylor Wimpey, Barratts, etc.
Joe,
The proposed abolition of ground rents will apply to new build. These are questions being asked about existing leasehold homes.
Martin,
Is that abolition applied to houses only or to new-build flats?
Are onerous leases only to be considered on a strictly financial basis?
Could tri-partite leases which effectively means the freeholder can appoint themselves (via a connected company) as managing agents and make it nigh on impossible for leaseholders to remove them also be considered a an onerous lease?
Yes , I reckon so! Any exploitation in what is supposed to be your home needs binning!
Thanks Martin
What amazes me is that only LKP seems to be publicising DCLG consultations and without LKP even less leaseholders would be aware of anything happening.
I know more than the average leaseholder but if I had not clicked on LKP, I would not have a clue.
I thought that LEASE had changed its ways and was going to be proactive and give out the sort of information that LKP posts.
Surely it is blindingly obvious that existing leaseholders need their ground rents scrapped or changed by deed of variation to peppercorn rent. Why should they be treated any differently.
New Builds are still selling with rip off ground rents.
So are New Builds sold today counted into the group of flats and houses where Ground rent will be scrapped?
Hi Joe
Are you aware of the National Leasehold Campaign on facebook too ?? We have over 11k members.
We are determined to get justice for all.
Sent my response and as it’s about a City and Docklands development in Limehouse with the freehold sold behind our backs to the lovely Avon Ground Rents Ltd now managed by their able assistants Y&Y Management Services. I’ve also alerted Jim Fitzpatrick. I’m sure it’s just a coincidence that not only does Canary Gateway have doubling ground rents and a service charge jacked up by 50% a year after completion. I’m sure it’s also a coincidence that Avon and Y&Y share the same offices! Either way us leaseholders are screwed unless reform is on its way! Perhaps LKP or the Leasehold Alliance could get the latest call for information in the press. I kid you not in my limited experience the publicity and call for leasehold reform seems to be making developers, freeholders and service agents redouble their efforts to behave badly. They have no shame and are legalised crooks plain and simple.
Gary, that is an interesting post, and I would particularly agree with your last sentence. Yes, ‘legalised crooks’.
In my own case the ‘onerous’ part of the lease is on the landlord, because it has to maintain the common parts at its own expense. (The estate was built in the 60s in a buyer’s market, so that was the only way the 999-year leases could be sold. Sales receipts were more than double the building costs, but no funds were put by for future maintenance).
I have lost count of the number of people who have declined to help regulate or prosecute the Lessor after it pretended to ‘sell’ the land. (It pretended in writing that the unilateral sale ended their contractual obligations). I won a civil case in 2013, forcing a reverse of the land sale, with a court order for overdue repairs. The buildings had not been insured for several years, and that was my neighbours’ main concern, so I managed to get that re-established as well.
I had no help from councillors, the land registry, ombudsmen, the SRA, trading standards, the DCLG, the police or the DPP. Curiously, I have never had any help from the LKP either, although my wife and I drove a long way to meet them in 2012. I sent them copies of my (fully researched annotated) court pleadings and court order, and have several times asked them for help to formulate a private prosecution, for fraud, followed up again just a few days ago. Again no substantive reply or help. I estimate the value of the fraud at £671 trillion over the following 950 years.
I am not losing any sleep over it, because I live in a good freehold house. (My leasehold interest is as trustee of my late parents’ will). But I see it as a rare opportunity to create a lasting deterrent to leasehold abusers everywhere, if only enough people could see the significance, for all cases (e.g. TW) where developers wrongly distance themselves from the contracts they created and sold. It is up to all leasehold campaigners here, really. There is no point me trying to do it alone.