Please Read if you are on Shared Ownership Scheme or a Leaseholder or Pay Service Charges

agrinnall

rachel230 wrote: »

Clearly all those commenting are expert, property solicitors who can interpret deliberately confusing language in the leases (which are usually given at the 11th hour).

You're just being ridiculous. Very few of us are property solicitors or have a deep understanding of the language used in leases, which is why would employ someone who is to tell us what it means. If you use the conveyancer recommended by the developer simply to save a few quid then you should expect to receive a less than perfect service - always engage someone independent.

simondv

There are some smart Alecs on here who think they know all about leasehold, and people were foolish to fall into carefully set traps. They do not, and neither do I know all about leasehold law, only a very few specialists do. Leasehold law is archaic and very complicated. Developers, freeholders and their colluding solicitors used this law to their advantage to gain financially at the expense of thousands of people. Verbal promises at point of sale about buying the freehold after 2 years were broken, when the home buyer later found the freehold had been sold on by the developer to a 3rd party, as told by 1000s of people who gave evidence to the Select Committee. All these people were not lying, the developers' sales people were. The solicitors failed to warn buyers of the onerous terms in their lease so they were not acting in the interests of buyers, but in the interests of the developers and freeholders. Buyers were incentivised to use the developers pet conveyancing solicitors.

simondv

Government announcement, not law yet

Cornucopia

simondv wrote: »

There are some smart Alecs on here who think they know all about leasehold, and people were foolish to fall into carefully set traps.

Still waiting for an explanation of what these "traps" are.

They do not, and neither do I know all about leasehold law, only a very few specialists do.

In practice, though, it doesn't work like that, does it? People know enough about what Leasehold is in order to work out whether it is for them or not, and they have a Solicitor to help with that at the time of purchase. The Solicitor should also be examining the Lease for any clauses that are of possible concern. The idea that it is some mystical alchemy that is there to deceive people is just scaremongering.

Developers, freeholders and their colluding solicitors...

Can we say this loudly and clearly: DON'T use developers' solicitors.

... used this law to their advantage to gain financially at the expense of thousands of people.

There are 2.9m Leasehold flats in the UK. How does that compare to your "thousands". Or are you talking here solely about Leasehold houses with fast rising fees that the Government is intending to deal with.

Verbal promises at point of sale about buying the freehold after 2 years were broken...

There are statutory options to buy a Freehold, and these kick in after 2 years residence, so perhaps this is a misunderstanding of that?

... when the home buyer later found the freehold had been sold on by the developer to a 3rd party...

What difference does it make who owns the Freehold?

The solicitors failed to warn buyers of the onerous terms in their lease so they were not acting in the interests of buyers, but in the interests of the developers and freeholders. Buyers were incentivised to use the developers pet conveyancing solicitors.

So you are talking solely about Leasehold Houses with onerous fees? I think you should make that clear, because Leasehold flats are in the majority.

Picking up a couple of points from previous posts:

mkgirlchick wrote: »

im dumfounded that if youre Leasehold you are just a Tennant in Law....

This is a meaningless claim. A Rental Tenant has a completely different kind of tenure, governed under different laws and regulations to a Leaseholder. That's just a fact. Leasehold provides a much stronger form of ownership compared to a rental tenancy which does not confer ownership. They are not similar - you are playing word games (or grossly misunderstanding the situation).

That means us who have bought a flat, house, or bought into the shared ownership are nothing but tennants in law- you do not Own your house or Part own your house, its all been mis-sold and mis advertised on a grand scale.

This is another misunderstanding. When you buy a Leasehold you have not "bought a flat". You have bought the right to own the property for a period of time - a long period of time. Under the present law you have rights to extend that period of ownership for a fair cost. None of that represents mis-selling - buyers are taking a considered decision for which they should be undertaking due diligence in discussion with their Solicitor. A very basic part of that due diligence is a basic understanding of the difference between Leasehold, Freehold and Share of Freehold.

Service charges are uncapped and left for a Freeholder to profiteer off of...

There is protection against excessive service charges, although it could be better.

GR is something you pay ontop of your mortgage because in essence you do not own your home - you dont pay your GR you can get kicked out of YOUR home.

Again, due diligence. Most Ground Rent is a trivial amount of money compared to the other costs of home ownership.

Why do you have to pay for a Lease extension and arguably buy the property twice?

You are not buying the property twice. The cost of lease extensions is a proportion of the property value.

There are calls to now call this ownership Lease Rental.

I think that would still confuse people - possibly more so.

ThePants999

mkgirlchick wrote: »

i did not perhaps realise it wasnt a purchase of the house but a purchase of a piece of paper -

Emotional language. The richest people in the world primarily own "pieces of paper". If you buy companies, you basically buy "pieces of paper". If you go to a commodities market and buy a hundred grand's worth of gold, you actually get "pieces of paper". There's no practical difference, day to day, between owning house X outright versus owning a piece of paper that says "whoever owns this piece of paper can use house X until the year 3000". (There ARE problems with some of the clauses in leases, but the fact that leases are "pieces of paper" is not the problem.)

simondv

Still waiting for an explanation of what these "traps" are.

If you bother to read what I and others have said it is clearly explained. You obviously choose to ignore what we have said because you have your own agenda, so discussing this subject further with you is a waste of time.

Rock-on

Thank you SIMONDV for trying to get the message across to the poster who quite obviously does not read what has been written and who obviously knows better than those of us stuck with this archaic system. Perhaps the poster should stop posting ridiculous statements until the poster gets the full facts, not just as they see them.
Those of us trapped in this mess are trapped because we cannot sell these properties and for those of us trapped in shared ownership which was sold as 'a step on the property ladder for first time buyers or those on lower incomes' it is even worse. We cannot sell these properties, or leases as they should be called even at a drastically reduced price. If we cannot afford to staircase to full 100% so called ownership, we have absolutely no chance of even considering a lease extension, without which the property/lease is unsaleable even when the lease expiry is in excess of 80 years.

We have these forfeiture clauses which most of us knew nothing about until very often after completion. Forfeiture does happen, the poster should read some of the reports about that before trying to say it doesn't happen. The chances of being able to have these terms removed from leases is virtually impossible. The cost of even trying to remove onerous clauses is prohibitive. Not only do we have to pay our own legal fees to take this to a very biased tribunal, we have to pay the freeholder fees as well even if we win. We cannot use consumer laws either.
Some with shared ownership who are second purchasers never had a copy of the lease as it was assigned, i.e. signed by the first leaseholder and passed on regardless.
Yes conveyancers should have brought these terms to our attention and no they certainly didn't despite being asked numerous times about the various terms and asked for full explanations, neither for that matter did estate agents who were reselling these places.
As for developers being banned from selling property leasehold, it isn't working if indeed it has become law. There are plenty of developers selling new property with leases all over the UK and plenty of them selling fleecehold property where there is an escalating management fee which again cannot be either disputed or removed with various reasons given for inclusion

rachel230

Katgrit wrote: »

I think that maybe there was only you who weren't aware.

Lol
Read the appg report?
Read the Law Commission Consultation?(6000 responses)
Read the papers?
Listened to the news?

Try informing yourself about the scale of the issue before posting such foolish remarks 😉

rachel230

Sachs wrote: »

https://www.google.com/amp/s/www.bbc.co.uk/news/amp/business-42439155

Have all leasehold houses been banned?

https://www.google.com/amp/s/www.thisismoney.co.uk/money/mortgageshome/article-6523115/amp/New-build-leasehold-scam-goes-despite-Government-promise-ban-arrangement-year.html

Cornucopia

Rock-on wrote: »

...who obviously knows better than those of us stuck with this archaic system.

Perhaps you need to read my posts. I have lived in a number of Leasehold flats, and currently live in a Leasehold flat (albeit with no mortgage).

Perhaps the poster should stop posting ridiculous statements until the poster gets the full facts, not just as they see them.

I don't think you understand how this works. Posters have made various claims about "Leasehold" some of which are exaggerated, some concern only a subset of such properties and some are essentially only theoretical risks - just how many Leases are subject to forfeiture? I'm quite clear about the factual nature of my posts, and that my comments apply to the entirety of Leasehold housing unless otherwise stated. But if I am wrong, it should be easy enough to prove that - if your position is correct.

https://www.todaysconveyancer.co.uk/guest-writers/long-leases-forfeiture/

Those of us trapped in this mess are trapped because we cannot sell these properties...

Thanks. So the "trap" is a trap of prolonged ownership and risk of loss of value.

... and for those of us trapped in shared ownership which was sold as 'a step on the property ladder for first time buyers or those on lower incomes' it is even worse.

But Shared Ownership is not Leasehold (necessarily). There is no link between them.

We cannot sell these properties, or leases as they should be called even at a drastically reduced price.

I have sold several Leasehold properties, and of the properties that I have "owned", the one that increased in value the most was a Leasehold with RTM in progress at the point of sale. So I think we would need to look at individual cases in order to understand any possible issues.

If we cannot afford to staircase to full 100% so called ownership, we have absolutely no chance of even considering a lease extension, without which the property/lease is unsaleable even when the lease expiry is in excess of 80 years.

That must be a big problem for those people affected. However, it does not equate to evidence of a more general issue.

We have these forfeiture clauses which most of us knew nothing...

In which case you did not properly understand Leasehold.

Forfeiture does happen, the poster should read some of the reports about that before trying to say it doesn't happen.

I'm saying it's extremely rare, and that's because there are statutory controls.

As for developers being banned from selling property leasehold...

That is not what is happening. The Government is planning to act against Leasehold Houses. Whether that equates to banning them outright or addressing the quick escalation of fees remains to be decided, I think.

...an escalating management fee which again cannot be either disputed or removed with various reasons given for inclusion

If the fees were Service Charges then they could (easily) be challenged in LVT. My understanding is that they are other fees (including Ground Rent) that do not have such controls, which is why the problem is recognised by Government.