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.”
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.