We want the freehold to our homes, not variations to leases
Adriatic Land’s charges are ‘frankly obscene’
The onward sale of freeholds is more serious than doubling ground rent
Taylor Wimpey should admit how many flats and houses with doubling ground rent
Joanne Derbyshire, the owner of a Taylor Wimpey leasehold house in Bolton, has told Taylor Wimpey that its much publicised £130 mea culpa does not go far enough.
Miss Darbyshire, who addressed the All Party Parliamentary Group on leasehold reform on April 19, today tells Taylor Wimpey CEO Pete Redfern that “the outcome you are proposing is nowhere near far reaching enough”.
On May 2 Miss Darbyshire told the Daily Telegraph that the £130 million contrition figure was “a PR gimmick”.
“Taylor Wimpey has been negligent in the onward sale of these freeholds, there was no due diligence and significant customer detriment,” she told the Telegraph.
“From my perspective this takes us from a really bad situation, to just a bad situation.”
Leasehold houses and the sales process were ‘absolutely disgusting’, MPs told. But have laws been broken?
Today Joanne Darbyshire writes:
“As one of your doubling ground rent customers I have followed with interest your recent announcement to set aside £130m to “compensate” those of us caught in this leasehold scandal.
“Whilst I appreciate that you have apologised for what was nothing short of reckless behaviour in introducing these ground rents, and have made an apology for that, the outcome you are proposing is nowhere near far reaching enough.
Let me explain why:
1. The land that my house was built on was bought freehold by yourselves.
There was no reason to make the properties on this estate leasehold at all, other than to create an asset class for investors.
As I have said numerous times before, a defence of “this is common practice” is simply not good enough.
2. Had I been properly informed by your sales people, or the conveyancing solicitor that you recommended I use at the point of sale, I would have bought the freehold at the point of sale for £5,900 (as some of my clearly more well informed neighbours did).
Unfortunately, neither informed me of your intention and “common practice” of selling these freeholds on to companies like Adriatic Land nor the consequences that would follow.
I would expect any offer of “compensation” to reinstate me to the position that I would have been in had I been properly advised and informed at the point of sale – i.e. I should, at the very least, be able to purchase the freehold on my house for £5,900.
The offer that you are making falls well short of that. You are offering to convert my doubling ground rent to one that increases by RPI.
That will not:
1. Reduce the frankly obscene charges that Adriatic demand for making any kind of alterations to the house; one of my neighbour’s has been quoted a fee of thousands just for Adriatic’s permission to build a small extension that doesn’t even require planning permission.
To simply obtain a quote for the purchase price of the freehold is over £100!
2. Allow me to purchase the freehold at the price I could have done originally – £5,900.
Unless I negotiate informally with Adriatic (and that’s not to be recommended as they seem to pull figures out of the air) I have no alternative but to go down the lengthy and costly enfranchisement process to purchase the freehold.
This will cost me substantially more than £5,900.
I have a number of questions from what I’ve read so far and would like some comprehensive answers before I choose to enter my details into your database. Forgive me if I’m a little untrusting after what’s happened so far.
1. You seem to believe that the only wrongdoing here is the introduction of doubling ground rents.
The real scandal here is the onward sale of ALL freeholds, be they doubling or RPI to investment companies and the consequences to us of those sales.
Did you know that once the freeholds were sold on that Adriatic would introduce exorbitant charges for alterations and increase the cost of buying the freehold significantly?
What steps did you take to ensure that there would be no customer detriment as a result of these sales?
There has been substantial detriment, both financially and emotionally. In my opinion, your company (and other developers) have been negligent in the onward sale of these freeholds.
2. I would like to know if my ground rent has to double before it will be converted to RPI? Experts in this field tell me that if it does, I am materially no better off, as the cost to purchase the freehold will be pretty much the same as it currently is.
3. You state that you have engaged with most of the freeholders representing properties with doubling ground rents and discussions are proceeding well.
At no point have you asked me for my permission to negotiate with my freeholder, nor have you bothered to ask me what I think would be a satisfactory outcome.
How have you managed to negotiate on my behalf without my permission?
Do any of the current or past Directors of Taylor Wimpey have connections or associations with those of Adriatic? I think I have a right to know.
4. The £130 million “compensation” is all going to be paid to either the current freeholder as compensation for their reduced future income or to solicitors as part of the fixed contribution to legal costs you propose.
So there is no compensation for me, the customer?
The lack of transparency alarms me. How much are you going to pay Adriatic in “compensation”? We need to know.
Please confirm exactly how much you intend to set aside for the fixed contribution to my legal costs so that I can ascertain whether I am going to be out of pocket simply to go through this process (assuming it’s advantageous enough for me to do so).
5. Why do you refuse to tell the press, or your customers, how many houses [and flats] are involved in this scandal?
Until recently I was unaware of the consequences of your onward sale of the freehold; there will be thousands more who are still unaware.
If customers need to apply to convert these onerous ground rents surely you have a duty of care to your customers to at the very least inform them individually of the predicament they find themselves in and what you are doing to help? You must know how many houses and customers are involved.
6. Although this doesn’t affect me personally, as I am the original purchaser of my house from new, I don’t understand why you are not extending this offer to anyone currently living in a Taylor Wimpey house with doubling ground rent. I own a VW Golf, I’m the second owner, but VW still recall it if they find a fault.
7. You state on the web page that entering details puts me under no obligation to accept the offer, yet it does not say this in the terms and conditions at the foot of the application page. I would like that adding before I would consent to putting any personal details in.
I would also have expected my acceptance of the terms and conditions to give you the right to negotiate with Adriatic on my behalf; they don’t.
8. Do you intend to put a time limit on this offer? If so, please provide details.
You presume that changing the terms of my lease provides the best answer for me. It categorically does not.
The only acceptable way forwards is for you to reinstate me to the position I would have been in had your sales people, and the solicitor you recommend I use, had informed me fully at the point of sale, when I would have purchased my freehold for £5,900.
Anything less than this is not a satisfactory outcome and I will continue to campaign for justice for all of those who remain caught in this leasehold scandal.
I look forward to hearing your detailed responses.
Once I’m fully informed I will consider whether I should apply for your offer, although I have grave reservations that doing so would be tantamount to me agreeing that this is an acceptable solution, which is it not.
I am a retired valuer.
If they offer a variation in lease to one initial double after 10 years then RPI it is monumentally better than your current 10 year doubling review, I don’t know who is telling you it’s just as bad as they are simply wrong.
Whilst it is not ideal at all, it would be worth taking it up then enfranchising as it would be a lot cheaper.
If it the ground rent is simply linked to RPI with no double it is valued as a fixed rent for enfranchisement purposes and would be no more than 21YP at tribunal and potentially as low as 15YP!!
Do not let anyone tell you any different and make sure you get valuation advice from various surveyors to back this up.
I wish you all the luck in the world.
In my calculation TW should be able to negotiate with these freehold companies (who they appear to have a very close association with), and buy back the freeholds at a price far less than the leaseholders would have to pay.
They can then sell the freeholds back to their customers at the original price they quoted when the houses were first sold. Around £5000.
I would have thought that £130million would have covered the cost of dong this for all the TW houses whatever Ground Rent system they are on.
Far simpler than changing thousands of leases, so I do not understand their thinking on this.
Unless of course they feel they could cut their £130million estimate of the overall cost.
I remember in a recent price fixing case the perpetrator reserved £millions and eventually escaped with a £100000 cost as they were never pressured to fully redress the scam. Their shareholders would have been delighted.
More big bonuses in the pipeline.
You mention a case of price fixing?
Would you be referring to Peverel/Firstport who through their Cirrus (now called Appello) subsidiary systemically price fixed at least 65 retirement developments and offered a mere 10% of the claimed profit from the price fixing as a “goodwill gesture”?
I have great faith in the shafted leaseholders ( Up North-real true grit)t that TW et al will be lucky to get away with their cojones intact. The leaseholders will get their pound of flesh.
Incidently Peverel – First port – solitaire- Stonedale- OM- Westbury residential – Freshwater et al, do these outfits and their directors need investigation?. Just asking…………
At present RPI is less onerous than the doubling clauses. However, with a bit of inflation any advantage is reduced.
That said, those houses should have not been sold as leasehold period!
Any change in the calculations of ground rent does nothing to address the usurious charges levied by the freeholder if a leaseholder want to as much as sneeze!
The problem needs to be addressed with legislation rather than rely on the “goodwill” and the charitable inclinations of the freeholder or house builder. Everyone should remember that even if you research the freeholder and there are no problems, as things are it can be sold on. ( yes yes I know s5 blah blah blah, good luck with that once it’s sold) and you can end up with the freeholder from hell…
Dear Leaseholder, you have not answered the questions asked of you on a previous post. Why? What was the result if the FTT regarding your case? Please enlighten us all so we may learn from your experience.
Yes the freehold may be cheaper but we are still forced to buy through enfranchisement so we need to add a further 3k in fees . What if people have not got the funds, if all the mortgage lenders, as I am sure they will soon follow nationwide stance then people will still be stuck with unsaleable houses if the grd rent exceeds 0.1% of the value of the property . Taylor wimpey set most grd rent to start at 295 per annum my property at best is worth 149k . If this happens most will still be left trapped
WE HAVE WAYS OF MAKING YOU PAY.
There is one major reason why the leaseholders need to recover these freeholds and not settle for just a ground rent adjustment.
There are well respected firms of Solicitors who specialise in debt recovery from leaseholders who cannot afford to pay their ground rent. This even includes the recovery of the property itself.
J B Leitch produce the Insiders Guide to Forfeiture.and the Landlords Right of Re-Entrry. This advice gives the landlord advice on the right to terminate the lease even quicker than the law allows.
And how the Landlord can reclaim legal expenses even if the decision is not in his favour.
And JB Leitch have many testimonials from major Property Managers.
They also Sponser Awards for the best managers
They contribute articles on their expertise in several publications.
They would be a force to be reckoned with.
Then there is Savills who say they provide advice that gives the Property Manager the advantage. And we all know who one of their top advisers is. He who advises leaseholders for another organisation.
Last but not least is Brady’s who recently conducted a survey of leaseholders opinions with LEASE and came to a bias conclusion that was disputed by many.
Brady’s big boast is “You can be assured of our strong track record when leaseholders decide to defend their non payment of arreas”
They offer this service on a non recovery no fee basis.
So all this shows that the leaseholders need to get their freeholds otherwise in the future when their Ground Rent multiplies to £thousands per annum and they cannot afford it, these outfits will be out to get you.
MH I repeat- Westbury residential Ltd( Formerly County estate management) Freshwater- OM -Solitaire-Stonedale-Firstport. Is anybody investigating the directors of these outfits, There is something rotten in the state of Netherlands….. to paraphrase the bard.
Its been every UK Government’s policy to protect the Landlord’s rights to exploit the leaseholders.. This Policy was commenced by William the Conqueror who developed the idea of divide and rule the peasants from Normandy
The companies you mention including OM -Solitaire – Stonedale- Firstport – are all part of
and controlled by Tchenguiz Family Trust in BVI – they are the 21st Century exploiters of the english and welsh peasants .
Where is the Gina Miller of leasehold?
Is it time for a crowd-funded lawsuit? How many readers here would contribute? I do not own a leasehold house and cannot start this but I would both contribute and organize a whipround at our development.
If this was the US surely Joanne Darbyshire and all the others affected would be participants in and likely beneficiaries of a class-action law suit with significant damages. I’m ordinarily a critic of litigation culture but the way the deck is stacked in the UK is just beyond belief.
Of course, if it was any of:
the US, Canada, Ireland, Scotland, Australia, New Zealand, South Africa, Hong Kong, Singapore or anywhere else that inherited leasehold tenure from English Common Law there would be no problem at all because they all abolished leasehold tenure as unfit for purpose.
Kudos to Joanne for giving them a robust response. As the originators of the boycott proved, individuals acting together against an oppressive landlord can be very powerful. Nobody should accept the deal offered as presented.
We need whistleblowers in these companies.
“8. The only acceptable way forward is for you to translate me to the position I would have been in had your sales people and the solicitor you recommend I use had informed me fully at the point of sale when I would have purchased my freehold for £5,900.” Joanne Darbyshire -above..
This failure to inform fully at the point of sale demands that practices employed in the sale of leasehold houses are forensically examined, as the issue of failure to disclose and misrepresentation (virtual freehold etc) lie at the heart of this scandal.
And Sir Peter is right to call on the police to investigate.
Such investigation should also be extended across the sector to include willfully enticing individuals owning flats into “informal” lease extensions whilst failing to “inform fully” on the individual statutory right to a 90 yr extension on the existing lease with Ground Rent reducing to zero
And the failure to inform fully at the point of purchase of Ground Rent portfolios of flats without the knowledge of qualifying leaseholders whose right to buy the freehold on like terms to the original; disposal. is thereby criminally denied. at that point.
As Joanne Darbyshire says, the only way forward is to reinstate buyers to the position they would have been in had they been fully informed at the point of sale. –and this applies as much to flat buyers as it does to house buyers.
Following the introduction of criminal sanctions through the Housing Act 1996, existing legislation governing the freehold sale of Ground Rent portfolios of flats provides for the majority of qualifying leaseholders in flats, where right of first refusal has been breached, to force the resale to themselves on “like terms” to the original disposal.
And I believe this model would also work for Joanne Darbyshire
And you are right Kim -lock ’em up!
And if the freeholder interposes a head lease for a large sum (millions) notionally paid to a British Virgin Island entity he controls (with concealed ownership)?
Your right to force the sale has been compromised by the transfer of monopoly money from one pocket to another! And for good measure, the BVI is non-transparent on the question of ownership.