An investor who bought a Taylor Wimpey re-sale flat in London with doubling ground rent – and paid the Vincent Tchenguiz organisation £5,000 to vary the lease to rise with RPI – is to be included in the Taylor Wimpey settlement agreed with the Competition and Markets Authority.
Taylor Wimpey’s decision is an about-turn for the company that had been telling owners of re-sale properties with the toxic lease terms it created that there were on their own.
The reverse ferret by Taylor Wimpey came about after one of the buyers contacted the Leasehold Knowledge Partnership, which suggested a meeting between the company and the MP co-chairs of the APPG on leasehold and commonhold reform.
Sir Peter Bottomley MP, APPG co-chair, has indicated that the meeting between Taylor Wimpey and the APPG should nonetheless still go ahead “before the next stage of parliamentary action”. Justin Madders MP, also co-chair, echoed this in order to establish “all the different categories and what TW’s offer covers”.
A neighbour in the same block, also a buy-to-let investor who had paid £5,000 to Tchenguiz’s freehold owner company Theowald Limited to vary the lease to RPI, was given the brush-off by Taylor Wimpey:
Taylor Wimpey has reached agreement with the Competition and Markets Authority (CMA) following their investigation into historic, ten-year doubling ground rent clauses, and the investigation is now closed. You can view our announcement here: https://www.taylorwimpey.co.uk/corporate/investors/results-and-reports
The voluntary undertakings we have announced build on the company’s Ground Rent Review Assistance Scheme (GRRAS scheme) and mean that all leaseholders of Taylor Wimpey-owned ten-year doubling ground rent leases, or those that have already gone through our GRRAS scheme and converted their Taylor Wimpey-owned lease to an RPI-based structure, will revert to a fixed ground rent.
Taylor Wimpey is making a financial offer, as agreed with the CMA, to third party freeholders of leases that Taylor Wimpey no longer owns, to enable their leaseholders to do the same. We believe this is a positive outcome for our customers and leaseholders …
The offer to 3rd party freeholders is in relation to those customers who would be eligible for the Ground Rent Review Assistance scheme. BOLD As a second/subsequent owner of a property with a 10 year doubling ground rent, you would not qualify for assistance under the Ground Rent Review Assistance scheme. Therefore, any further variation to your lease would be at your freeholder/Landlord’s discretion, and we would therefore recommend that you contact your Landlord directly, to discuss.
Yesterday, however, Taylor Wimpey changed its mind, writing to the leaseholders:
Please accept my apologies, prior to seeing your latest email. I have just sent you a further communication explaining that the content of my original response to you was incorrect. The offer Taylor Wimpey is making to third party freeholders, does take into account both original and subsequent owners.
Of course, the Tchenguiz freehold owning company now has to accept the Taylor Wimpey offer for this finally to be resolved.
LKP has sent the relevant correspondence in this case to Simon Jones, who has headed the CMA investigation into leasehold mis-selling and rip-off lease terms.
LKP has long criticised Taylor Wimpey for failing to sort out the toxic leases it dumped on its own customers and introduced to the property market, where they would remain a potential source of grief for years.
In 2017 Taylor Wimpey set aside GBP130 million to address the issue, but could not resist setting the ground rents to rise with RPI.
Worse, the onus was on affected leaseholders contacting Taylor Wimpey to apply for relief.
The CMA says that around 5,400 leaseholders did so, but Taylor Wimpey sold ten-year doubling ground rents to 10,500 buyers.
Until the involvement of the CMA, Taylor Wimpey sort to game the ground rent issue to its own advantage and make only tokenistic efforts at redress.
Here was an example, giving evidence to MPs of the Communities Select Committee chaired by Clive Betts: