(… and he paid another £4,000 in fees)
A 79-year-old pensioner in Clitheroe paid £38,000 to buy the freehold to his Taylor Wimpey leasehold house to ground rent speculators E&J Capital Partners.
He also paid out another £4,000 in legal and other fees: his own, and E&J’s.
Now he has been told by Taylor Wimpey that he is not eligible for the companies “ground rent review scheme”, which aims to make good onerous leases offloaded on its customers.
Trevor Nowell, 79, paid for the freehold in order secure the future of himself and his wife Margaret at the property, at Oakdale Drive, Whalley, Clitheroe.
They purchased the leasehold house, which had doubling ground rent, in September 2011.
Mr Nowell has been informed that he is excluded from any settlement within the Taylor Wimpey ground rent review scheme.
He believes that his case should be subject to the Taylor Wimpey review and that he was “deliberately obstructed” from buying the freehold by Taylor Wimpey (see below).
Mr Nowell was appalled when he realized after purchase the full implications of purchasing a leasehold house with doubling ground rent and sought to buy the freehold to secure his and his wife Margaret’s future.
E&J Capital Partners bought the freehold to his property along with his neighbours’, in December 2013. It paid £8,000.
Somehow or other it increased by a further £30,000 in value by the time Mr Nowell completed the freehold purchase in September 2016.
It is also a concern that Mr Nowell received a letter from
Mark Mainwaring, MD Taylor Wimpey North West on April 26 2017.
Mr Mainwaring writes:
“I am aware that you have contacted our legal office in late November 2013 to inquire in respect of the purchase of the freehold of your property. You were informed that we were too advanced in the sale process to consider an offer from you. You have communicated that you consider that you were deprived of your right under the Leasehold Reform Act 1967.
“The right to purchase under that Act is only triggered by the service of the tenant’s notice in prescribed form and no such notice was served by you.
“Even if a notice had been served by you, we would have been entitled to and would still have proceeded to sell the freehold to E&J Estates.”
Both Peter Redfern, CEO of Taylor Wimpey, and James Tuttiett, MD of E&J Capital Partners have been contacted about this matter which has been raised with Communities Secretary Sajid Javid by LKP.
Related posts:
E&J Capital Partners ‘compelled’ to sell freehold to Taylor Wimpey house to pensioner for £38,000 (plus £4,000 costs)
Telegraph reports case of Taylor Wimpey pensioner who has paid £38,000 for his freehold … and now won’t help him
Taylor Wimpey ground rent explanation ‘not true’, BBC is told
E&J Capital Partners in full retreat over rapacious ground rent terms
Taylor Wimpey has paid out only £11.2m of the supposed £130m to sort the doubling ground rent scam
MPs tell government consultation: End leasehold houses. Scrap new ground rents. Ignore pleas for self-regulation. Ban Help To Buy on rip-off leaseholds
Whats the betting that the freehold had already been sold to E and J before the two years was up?. This stinks! Poor old boy being stung like that.
If I can summarise the letter he received
From this it would appear that TW have granted around 4000 to 5000 such leases
I if he had taken up the scheme His ground rent would have been converted to an indexed lunged ground rent of say £300 which to investors is worth £10k. As the freehold is worth £40k TW would have paid the new freehold owners around £30k plus costs
Therefore if £130m has been set aside there must be something in the order if 4000 to 5000 such leasehold properties . If they banked on some not taking it up and excluding second hand purchasers then the figure might be nearer 6000
That is of course from one developer although a. very big developer
My thoughts are that I cannot believe the main board of directors TW purposefully sat down in London and agreed to such a plan . My thoughts are that possibly other people in the organisation agreed these deals and the.n tied up deals with hedge funds etc to buy them possibly receiving commission for it. If and I stress if that was the case and the company could be shown to be acting ultra vires then this may open up claims against the company for deals more than 6 years old which hitherto have been excluded by virtue of the statue of limitations
To further illustrate why I don’t think the main board of directors knew is that the sums received for these leaseholds subject to 10 yr doublers was around £10k and when enfranchised out is £40k
At £10k a property this generated possibly £6m for TW over a few year period – not really significant enough. Assuming a main board director of TW is blessed with commercial accuman and property experience they wouldsurley have know that such clauses would severely effect their company’s standing.
I have this strong belief that these 10 year doublers are the mischief of senior non main board directors possibly acting illegally
Stephen, I think you may be right in thinking it was not the Main Board of TW Directors who initiated the selling of leasehold houses.
I worked for Taylor Woodrow for 22 years and retired long before they amalgamated with Wimpeys to become Taylor Wimpey in 2007..
Which happened to be the date they started selling leasehold.houses.
To my knowledge Taylor Woodrow Homes never sold leasehold houses and I doubt they would have risked damaging their reputation by selling them with doubling ground rents.
I suspect it was the new Taylor Wimpey Sales Dept that initiated selling leasehold, and it proved successful as 2007 was the start of a very profitable period for them. In fact the Head of Sales who has long since departed records this profitable period in his CV.
So the Main Board at the time may not have instigated the new policy, but they certainly did not complain once they saw the Balance Sheet.
Little did they know it would come back to help them.
Of course I meant it came back to haunt them
a ground rent that doubles from £250 for the first six anniversaries has a NPV of £18,800 on the granting of the lease if discounted at 6% (£13,000 if discounted at 7%)
These leases according to the article were
“E&J Capital Partners bought the freehold to his property along with his neighbours’, in December 2013. It paid £8,000”.
If the main board had been involved this would not have been sold at that sort of figure. A ground rent of £250 per annum doubling every 33 years would have sold for around £4,000 in those days , Therefore the additional £4000 they got for a ten year doublet would not have been worth the risk. Someone on the board would have I am sure been uncomfortable about the trickery involved
This adds to my suspicion that the main board probably didn’t know.and this was the work of individuals who having created them sold to a fund where commission may well have been paid for the introduction not to TW but into the back pocket of some employee. The main board of course have to right the wrong if they are to try and repair the damage to their reputation
Had the NPV of the rent been shown next to the premium paid then the lessee would have been altered to the implications of the rent.
I am really not au fait with the property market and developers balance sheets etc, however to be bald , I do know that a fish rots from the head down!!
Jeeeeeze This is wrong on so many levels. LKP please help this man and his wife to get Justice.
Stephen: For the avoidance of doubt, in relation to residential flats, breach of right of first refusal is a criminal offence (amendments Housing Act 1996) and in absence of proper notice (post title sale: s3A) qualifying leaseholders right to purchase on like terms to the original disposal remains.- no time limits.
Alec
With respect I fail to see why you should wish to bring up the matter of rights of first refusal when we are discussing houses to which of course Section 5 do not apply, It doesn’t seem to develop the thread and may causes it to go off target. Incidentally the point you are making is set out in Section 12b of the Landlord and Tenant Act 1987
The comments I posted were about the possibility that individuals within TW (not on the main board) may well have been responsible for the introduction of these 10 year doublers
If that is the case and if it can be shown that the company was acting ultra vires then there may be a cause of action beyond the 6 year period set out under the statute of limitations
These freeholders and developers obviously know something that we stuck in the leasehold trap don’t. They are completely unrepentant and still see no need to treat their customers fairly rather than a source of perpetual income. Perhaps they know the government will continue to look the other way and let this legalised exploitation of over 4 million households continue. This is capitalism after all. They continue to sell leasehold houses, quote exorbitant prices for the freehold and insist on keeping onerous covenants, like requiring you to pay a fee before you remortagage your home, in the sale of the freehold. Otherwise known as fleecehold. A freeholder who paid less than 5% of the value of my home holds all the cards and can exploit me as he pleases. If I want to take action and take him to the tribunal, I have to pay his legal fees. Extraordinary!
the law is the law, there should be no expectations of’ ‘fair treatment’ and other fluff. In my experience, even in cases when the freeholders and their managing agents break the law, there is little enforcement and virtually no meaningful penalties.
The only thing we can do is change the law to make it more fair. I never thought Id become a socialist as I get older, but there you go…if nothing is done soon, property will become out of reach for most people and will become even more concentrated in the hands of property cartels, who are already manipulating the market.
fleecehold, Winston Churchill said “If you weren’t a socialist when young, then you haven’t got,a heart. If you are a socialist when older, then you haven’t got a brain” – This famous quote is often attributed to others, it matters not, there is meant to be wisdom therein – there isn’t wisdom therein.
True socialism is the finest expression of a civilised man. Whatever, there are countless evils in the world in which we live, leasehold laws are one such evil. It must be removed from our statute book.
Hear Hear!!
Indeed. I hope you have signed and shared the ‘ABOLISH LEASEHOLD’ petition?
And, Temi, at the tribunal you would be faced by judges who are a part of the conspiracy.
Yup. However, Ones Lease is King and that is leaseholders only saving grace.
Cont… If of course the lease hasn’t been drawn by Spiv developers and their shady, compliant , puppet , crooked ( take your pick) Solicitors.
Stephen: my comment above is to highlight that Leasehold Abuse is not confined to the sale of leasehold houses, but includes residential flat premises, and such abuse, which is out of control, encompasses the entire structure of this unscrupulous and unregulated industry.
Notwithstanding the TW thread, your comment concerning time limitation could serve to confuse a wider readership,.
Yes, in relation to residential flats, existing legislation allows for issue of a s11A in order to obtain contract information concerning any title sale, and the same legislation allows for issuance of a s12B notice to force resale. to the majority qualifying leaseholders.
However, when you are dealing with breach of right of first refusal in residential flat premises, which is criminal (and such transactions do not take place at auctions!), you are invariably dealing with criminals who assert no such title sale ever took place (merely the sale and purchase of shares), and as a result simply reject any s12B notice, aided and abetted by equally unscrupulous soiicitor’s/counsel acting on their behalf.
Enforcement can only take place through the courts at present and at prohibitive cost.. This must be remedied, including retrospectively as appropriate, as yes… for the avoidance of doubt- there are no time limits.
As Maggie would have said – a crime is a crime is a crime,and the time has now surely arrived for any self respecting legal professional to put blue water between him/herself and such nefarious activity. – otherwise….
One of the problems in the legislation concerning rights of first refusal is that it made any breaches criminal. Therefore weakening the lessees position because it must be proven beyond all reasonable doubt that the transaction breached Section 5. The legislation specifically excludes transfers between subsidiaries. Neither does it apply if the controlling shareholders sell their shares to others, as the company still owns the freehold before and after the sale of the shares.
Legislation such as this is interpreted on a strict basis and unless it falls clearly foul of the legislation there is no remedy. Clearly you have seen from your own experiences breaches of the “spirit of the law” unfortunately it is of no benefit to you.
Phillip Raines QC a well respected barrister by LKP believes that the legislation surrounding Section 5 can be abolished as lessees now have the right to manage, purchase the freehold or extend their leases and finally appoint a manager.
sale of share avoids the section 5 process however if was not excluded then every time a shareholder sells his share in a. Company which happens to own a freehold ground rent then a section 5 notice would need to be served.
There are other ways around the Act involving the creation of head leases and another involving the granting of a loan which allows the mortgagee to then control the freehold
Phillip Raines QC who is highly regarded by LKP is of the opinion that as lessees have the right to manage and the right to enfranchise that RFR that predates those two pieces of legislation should be abolished. Lessees in a minority’s position can also seek the appointment of a manager
Sure, Yes lessees in a minority position can seek the appointment of a new manager.. if yourself or anyone reading this, wants to go down that route contact me first, I can save you pots of gold and sleepless nights.
Stephen I hope you have signed the. ‘Abolish leasehold’ & Regulate Managing Agents petition ? It’s on Facebook and also available via website. If you need further information on how to Support the Petition then it is available
Abolishing leasehold would mean existing leaseholders holding an outdated form of tenure . They would then to help preserve thei value of their properties have to convert to commonhold (presumably) having to then pay all the costs of enfranchisement.
If the claim is that no compensation be payable to the freeholder then that would seem grossly inequitable. A lessee takes on a lease agreeing to pay a ground rent and to vacat the property at the end of the term. If a lessee wishes now to get out of the lease paying no compensation at all this seems wrong
It would be rather like turning up to a restaurant ordering a steak the. When it came to pay arguing that you had become a vegan during the course of the meal and objected to the treatment of farm animals
To adavanxe the argument of abolishing the argument needs to address whether compensation is to be paid and if not the reasoning. Otherwise it has all the hallmarks of a knee jerk reaction and will fail to gain any traction. To influence people arguments need to be balanced and thought out – the use of capital letters and exclamation marks doesn’t move the campaign forward
Dear Stephen,
You haven’t answered the question have you signed the petition??????? and I agree with Master Epstein “What is so special about England and Wales?
I reckon CAPITAL letters !!!!!!!!!!!!!!!!!marks are helping to move the petition along on FACEBOOK!!!!! Take a look at my SHARE when you log on to sign up.
Last but not least. Slavery was abolished because the powers that be finally had to acknowledge how brutal, oppressive and inhumane it was. Shamefully the slaveowners were compensated for being forced to free fellow human beings from a life of misery and savage treatment. Do you honestly believe that we have not moved forward with our thought process?
You say ” A lessee takes on a lease agreeing to yadda yadda”
I say, A slave owner pays to purchase a human being and presumably received an invoice.
Both transactions are wrong and therefore invalid.
We can’t claw the Compensation paid to slave owners back however we can abolish leadehold without compensating Freeholders.
The party is over and it’s time to call it a day! Also, STRICT REGULATION FOR MANING AGENTS. YAY capital letters rock!!!!
Correction ‘MANAGING’- Abolish leasehold”
It is offensive to the descendants of slavery to suggest there is any parallels between slavery and leasehold
You fail to set out any coherent argument that Abolishing without compensation is justified
Well said Kim enhanced by capital letters!
Stephen,
All other countries that had leasehold managed to change to a commonhold type system without trouble? What is so special about England & Wales that they can’t?
Stephen:
“sale of share”
Prior to amendments Housing Act 1996, which introduced criminal sanctions relating to the sale of freehold titles to which part 1 of the LTA 1987 applied (residential flat premises), the traditional avoidance route involved transfer of the land in the title to an associated company. This entailed:
1. Formation of the associated company
2. Transfer of the land to the associated company
3. Transfer of the shares in the associated company to the purchaser.
Thereby, as what was being sold were shares (and not an interest in property) there was no “relevant disposal”.
The legislators believed that the criminal amendments of the HA 1996 (incl introduction of the two year associated rule) would serve to close this loophole.
Not likely! as the unscrupulous, aided and abetted by slippery solicitor’s/counsel, have sought to circumvent the amended law as follows:
1. At the end of the two year period, the shares in the associated company are transferred to the purchaser.
2. At the same time, under a separate contract, the landlord agrees to sell the freehold title to the purchaser
Thereby, the landlord enters into an agreement with the purchaser to transfer the land to the associated company on the basis that such transfer is conditional on the purchase of the share(s). by the purchaser. In other words, the landlord continues to hold the shares as a fiduciary for the purchaser until such time as he is paid for the freehold title – hence the transfer is not to an associated company. (breach RFR)
It is through such manipulation of sale and purchase agreements that qualifying long leaseholders in residential flat premises (usually nearing 80 years remaining on lease) are kept ignorant of their right to RFR.
The sale and purchase of ground rent portfolios as above is a criminal matter depriving such qualifying long leaseholders in flats of the material interest in their own leasehold properties.and opening them to further abuse through the scam “informal” lease extension racket.
In an ideal world, if the sale price for the freehold corresponded with the market or marriage value then it could be that the enfranchisement route (1993 Act) might serve to remedy this. However this is not the case in this criminal trade in flat premises constructed during the 70/80/90s, where there is a huge gulf between the actual purchase price and the marriage value.
In this criminal trade the Stephen remedy,is to reward the criminal, for to buy cheap and offer to sell at marriage value or similar through “informal” lease extension racket, is a nice business when you can get it and are unconscionable..
Alec I have sent you some ‘ Interesting ‘ reading matter.
Stephen. NO it isn’t offensive and as a ‘descendant’ of slavery ( BLACK AFRICAN FATHER) I am telling you that it isn’t.
I have set out coherent ‘arguments’ several times on this site and have written a ‘paper’ on LEASEHOLD ABOLITION’ which was sent to Rt Hon Sajid Javid MP andI received a reply from the DCLG stating that my paper would be ‘included’ in the consultation processs. Every little helps! Must have been coherent- non?
Stephen keep the ‘ virtue signalling’ for another day. As a woman of colour I do not need a lesson from you on what is or isn’t offensive to descendants of slavery.
You are off beam as usual. Now, I will not be playing with anymore cos……..take yer pick.
Is there a man anywhere who would – by degree, extent, and level of evil therein – compare leasehold with slavery? Of course not. I just love those without moral values ascending to moral outrage by misrepresenting those who compare leasehold with slavery. The comparison is one of nature, not of degree.
Moving on, Leasehold is inequitable. If it is so – and it is so, then how can confiscation of freeholds from landlords without compensation be anything other than equitable? We have to return to slavery, historians look back at abolition and remark, “How scandalous that slave owners were compensated for their loss of human stock whilst the slaves themselves had only what was rightly theirs anyway, and had been deprived of”.
I will not say yet again how our government should act on leasehold, it is on record what I believe in that respect, I will however, repeat one aspect – as it is relevant to the subject matter of this post. Existing leaseholds should be converted to freehold at no cost to leaseholders, and without compensation to existing freeholders. This should be done because it is equitable to so do.
What is inequitable about a lease on a flat.
You engage a solicitor to act for you in the assignment of the lease from another. The terms are set out in the lease showing the ground rent payable and service charges and the obligation at some time in the future the property to be returned. The transaction takes several weeks to go through and a surveyor examines the building and reports back to you and your lender. Your solicitor should explain what the lease terms are and the various rights and obligations that are placed on you
If during the currency of the lease you feel the management is not to your liking you can evoke a Right to Manage without having to explain why. It is cheap to set up.
The idea on the one hand initially appearing to agree and to accept those terms you can then change your mind once in possession of the property and shout “unfair” and demand that the obligation to pay the rent should be washed away along with the right to return the property seems almost childlike. Particularly when no compensation is to be paid. If the government was to agree to such an idea what would be the future of other such contracts. Would mortgages be attacked? What would be the resultant outcry if an insurance company turned around to its annuitants and said “we have paid you back more than you paid in now go away”.
Many home owners are proud and pleased when the value of their property rises but must expect that if you play that game then they must man up to the responsibilities when it comes to upholding the terms of any lease entered into
Therefore provided the freehold keeps his/her side of the bargin they should have every right to receive what was agreed and if it is taken away then they should be properly compensated.
Ah Stephen, Stephen, you make me smile, sir.
Trolls to any argument do tend to stretch their point, what, what? I like particularly the moral indignation about slavery. Nice swerve.
As to the point.
Methinks you talk veritable nonsense, if I may say so. You try to sound ‘reasoning’ while revealing bias of intent. Not a pretty debating style.
In all your weeping over the “gross inequity” of calls for abolition of leasehold tenure, you constantly refuse to address facts:
1. The rest of the world has virtually abolished it giving collective ownership and capitalism has not collapsed.
2. It is irrational to shout “inequity” about removing an inequitable system.
3. You ignore the body of expert opinion that has accumulated for decades that leasehold is inequitable and needs to be removed as a form of tenure in a modern civilised system.
4. Leasehold grew out of the English love of feudal land law that paid the idle rich handsomely on the backs of the artisan classes.
5. Even Oliver Cromwell, no royalist to be sure, called English land law ” a tortious and unGodly jumble,” so it is not exactly a recent awakening.
6. Many acadamics in the property law caper have called for abolishing leasehold. The Law Commission has reported on its inequity numerous times since formed in 1965.
7. You probably know the excuses why leasehold is essential: positive covenants cannot run with land, blah blah. This is akin to backward nations who have no equal rights laws for women defending why women cannot vote or drive or choose their husband. The obvious answer is to change the inequitable law!
Besides which, commonhold addresses the problem of ‘land obligations’. That was its point.
Stephon, sir, you offer no solutions at all, other than more transparency as to ground rents? Leasehold is an exploiting form of tenure at every level. People do not buy leasehold on the basis they expect to hand it back at the end. Even the courts deny this to be the case when it factors in the “benefit of the Act” giving freeholders yet more unearned profit.
Whether leasehold is forcibly abolished in the 21st century I cannot say. I can predict that developers and fleecehold investors will never willingly give up such a perfect form of easy unearned profit: able to boast they are guaranteed their unearned profits from a 1-5% investment in value because those paying can lose their asset entirely through forfeiture, or crippling contractual legal costs etc.
Leasehold may not be abolished as long as England has a House of Lords, or a parliament packed with landlords, but it will be abolished, I believe.
Meanwhile, reforms needed now are not controversial. Why are leases 99 years? Who rather cleverly decided that a long lease becomes a short lease within less than 20 years? Thus making the need of yet a further slice of free profit for freehold investors. These are arbitrary decisions.
The average home lasts 100 years. Not my opinion. Perhaps you own a castle or a baronial manor that has lasted longer?
Those who buy freehold have control over the pace of deterioration of their asset within those 100 years. If they buy a run-down property, they can put all their wealth into refurbishment, not pay profits to stand-off investors
Leaseholders have no such control. Leaseholders face an ‘industry’ that has no concern about protecting the longevity of leasehold property. Spiv agents have absolutely no dog in that ring. Freehold investors stand to make more profit letting their “asset” deteriorate so that they can claim redevelopment rights sooner. Notice how this right is inserted into extended leases?
Leaseholders pay full market value (despite your constant comments on this site that they enjoy a discount). Once paid, they then face constant fleecing at any whim thought up by freeholders and parasite agents out to make a quick profit.
Any hope of investing in refurbishment is lost to this exploitation. It follows that, as a lease wastes in value, its owner finds their pension cannot support refurbishment costs anyway. They might have had a hope if they were not being fleeced for profits meantime.
Reserve funds are expropriated. Major works if done are done at extortionate cost because of vested interest and the fact agents make more in % from a higher cost.
Again, why are leases 99 years? One simple change in law that does not expropriate ownership of property would be to extend all leases to 250 – 999 years. If a leasehold property is able to be sold for full market value, it should LAST as long as a freehold property in resale marketing terms. Not crash in value within 20 years. That is greed, sir.
If a legal system stinks of deliberate exploitation, there will come a time when the public mood sweeps such corrupt law aside. Please do not keep whining about “inequity” when that occurs. The only person you may impress is yourself.
[No capital letters or exclamation marks were harmed in writing this comment]
OOOOOF , Nice post Paddy. Exclamation marks !!!!!!!!!!!! Oh I do luuurve an exclamation mark and a jammy dodger before I settle down for the night! HA HA……