Compton Group +ground rent +insurance

tobytops

We are leaseholders on a 1000 year lease for our house and pay ground rent of £5.25 per year. For 20 years we have paid and not had any additional demands from the leaseholder. Now it seems the lease has been sold to Compton Group and their insurance arm, Compton Insurance Services are insisting we can only insure the house with their chosen insurance company, Zurich. We are not willing to do this and it seems the only option is to buy out the lease. It appears these property companies are looking for any way to make money out of the householders and I can't help wondering what they will demand next. They want to charge £655 for this. I think it is unlikely that Zurich will give us a better deal than we have already and demands like this can only adversely affect the value of our property. Has anyone else had a letter insisting on this change of insurers. The deeds do state the leaseholder has the right to have an 'approved' insurer but it does seem unreasonable so long as the house is insured with a reputable company for the full amount which it is.

phead

You could always try asking the bunch at www.lease-advice.org , then were quite helpful when I checked something with them in the past.

To be honest you might be better just buying the freehold, just to get rid of them.

martinman3

When you say that the lease has been sold you really mean that the freehold has been sold don't you ?
If so then for the first time in 20 years you are seeing the difference between a leasehold property and a freehold property. I hope that there are no other surprises in the lease. I would have thought that you should have been given the chance to purchase the freehold if it was to be sold but I am not familar with the rules for houses but only flats. See http://www.lease-advice.org.uk/ for more info.

Maybe it is just the managing agents which has been changed and the freeholder is the same.

Incidentally, if the freehold has been sold then the price should appear in the Land Registry web site, after paying £2 or try using http://www.houseprices.co.uk/ for free.
The commission on their insurance brokerage will provide a good return on their investment.;)

kijoe07

hi tobytops
your post as prompted me to reply - i was in the very same position as yourself a few years ago - With exactly the same company"compton" group who wanted approx 10 pound a year rent/lease & exactly the same demands to get my house insurance with a insurance company of which they stated cant remember if it was zurich at the time & also the option to buy my leasehold for 500 quid approx

i was quite annoyed at the time because i thought it was unlawful so i rang citizens advice bureau who explained to me that this company cant legally make me take a insurance out (i dont know if things have changed since - new laws etc etc)- but i also seeked advice from a financial advisor whom said they could - so with contradicting advice - i decided to buy the leasehold and be done with it - which to be honest i could have thought of better things to do with 500 quid but now i am in the process of selling my house its much better in my opinion to be freehold & also if you are staying put & maybe having any kind of extensions it is also better (dont quote me on that - its just what ive been told) anyway hope this helps
good luck

tobytops

Thanks for messages. We have decided that buying out the Freehold is the only way forward. We are in a fortunate enough position to be able to afford this. I thought there may be a right to choose your own insurance under the 2002 Act to do with Commonhold and Leasehold but don't think that is the case now if it is the deeds of the house that give the leaseholder the right to choose an insurer. To stay with the current situation would probably knock thousands off the value of the house and we would lose our discounts and no claims bonus we have with our current insurer, so looking at it from that point of view we are much better off buying the freehold. I just feel sorry for householders who can't afford to do this.

kijoe07

Hi Toby tops

You seem pretty clued up on your plans for your dilemma .. & yes I also do feel sorry for people who cant afford to buy out of the leasehold - luckily for us at the time we had just remortgaged (bit of spare money available) otherwise we would be with the unlucky ones...So good luck & Im sure you wont regret it

Eddi_the_Seahorse

The exact same thing happened to us a few years ago (though in our case, Compton's "approved" insurer at the time was AXA, not Zurich). Otherwise, the details are identical. And unfortunately it's perfectly legal - Compton are exploiting a loophole in the law which allows them to veto any insurance company they wish, without having to give a reason.

By forcing their leaseholders to use a particular insurer, Compton are providing that insurer with a captive clientele. And in return, they can pocket a hefty commission.

What worries me is that Compton's "approved" insurer could then, in theory, go on to charge its captive customers whatever premium it likes, safe in the knowledge that they are prevented by law from looking elsewhere for a cheaper alternative.

Like you, we found that the only way out was to buy them out.

tmm_aka_tracy

Hi Guys,

I've got the same problem, with the same company Comptons.

I have lived in the house for 23yrs + and for the first 19 years, paid my £1.12 per year ground rent. Around 4/5 years ago, my ground rent bill came by Comptons, together with instruction from them to insure my building through Zurich.

After a quick search, I found a standard letter which you complete with your insurance details, and if it is recieved by them within 14 days of the insurance renewal, then there is little they can do to knock back your insurance.

However..... this year, I forgot to send the standard letter in time, so I got the frightners from Comptons, stating I was in breach of my lease and that they 'could' pass my case to thier legal department to start proceedings. (I have asked on numerous occasions what this would actually mean to me... but have never received any kind of answer).

I did send the letter about 6 weeks late, and thier response was that I owe them £25..00 to approve this insurer - even though I have used the same insurer for the past 12 years and they have accepted this in the past.

They have now written to my mortgage company, who have written to me suggesting that Comptons could now start 'possession proceedings'.

I ran the leasehold advisory service today to ask what the worst case senario is, and tbh, the advice was rubbish (just buy the lease; just pay them £25 to get them off your back; make sure you send the letter in within the timescale).......

I cant afford the freehold and on principle I refuse to pay them £25. I'm almost tempted to see how far they will go to persue this, and wonder if they went so far as to take me to court whether the judge would indeed rule in thier favour and reposses my house. I know its very extreme, but they have really put me in the mood for a fight.

Also, I was not informed of any change to my leasehold (or deeds) in recent years, so how can they now insist that I am in breach?

Has anybody actully taken them on and won? I know that they have been debated in the house of commons over thier actions. I have written to watchdog, but I dont think that they are interested in this.

If I was of a nervous disposition I dont know how I would cope with thier aggressive letters and language of legal proceedings.

Anybody have any advice?

Thanks

Tracy

richaki

We too received a letter this week demanding we change our insurance to Zurich after 11 years at the same property. The only alternative being offered is to buy out the freehold (quote in the post). When the Boteler Trust sold our interest to Compton's they offered us the option to buy the freehold for several £100's but we couldn't see a reason why we would do this as we only pay £3.50 per year...........now I know why!!! I'm now interested to see how much Comptons will charge us to sell the freehold back to us.

I've read several postings and assume I've got little choice but to pay out. Sent some questions to my Lawyer so will let you know the outcome.

It's an outrage that they are legally permitted to force us down this route - whatever option we take up will cost us money.
:mad:

tmm_aka_tracy wrote: »

Hi Guys,

I've got the same problem, with the same company Comptons.

I have lived in the house for 23yrs + and for the first 19 years, paid my £1.12 per year ground rent. Around 4/5 years ago, my ground rent bill came by Comptons, together with instruction from them to insure my building through Zurich.

After a quick search, I found a standard letter which you complete with your insurance details, and if it is recieved by them within 14 days of the insurance renewal, then there is little they can do to knock back your insurance.

However..... this year, I forgot to send the standard letter in time, so I got the frightners from Comptons, stating I was in breach of my lease and that they 'could' pass my case to thier legal department to start proceedings. (I have asked on numerous occasions what this would actually mean to me... but have never received any kind of answer).

I did send the letter about 6 weeks late, and thier response was that I owe them £25..00 to approve this insurer - even though I have used the same insurer for the past 12 years and they have accepted this in the past.

They have now written to my mortgage company, who have written to me suggesting that Comptons could now start 'possession proceedings'.

I ran the leasehold advisory service today to ask what the worst case senario is, and tbh, the advice was rubbish (just buy the lease; just pay them £25 to get them off your back; make sure you send the letter in within the timescale).......

I cant afford the freehold and on principle I refuse to pay them £25. I'm almost tempted to see how far they will go to persue this, and wonder if they went so far as to take me to court whether the judge would indeed rule in thier favour and reposses my house. I know its very extreme, but they have really put me in the mood for a fight.

Also, I was not informed of any change to my leasehold (or deeds) in recent years, so how can they now insist that I am in breach?

Has anybody actully taken them on and won? I know that they have been debated in the house of commons over thier actions. I have written to watchdog, but I dont think that they are interested in this.

If I was of a nervous disposition I dont know how I would cope with thier aggressive letters and language of legal proceedings.

Anybody have any advice?

Thanks

Tracy

anselld

tmm_aka_tracy wrote: »

I cant afford the freehold and on principle I refuse to pay them £25. I'm almost tempted to see how far they will go to persue this, and wonder if they went so far as to take me to court whether the judge would indeed rule in thier favour and reposses my house. I know its very extreme, but they have really put me in the mood for a fight.

According to the Shelter website ...

The freeholder can only start forfeiture proceedings if:

• you owe £350 or more in ground rent (or a combination of ground rent, services charges and administration charges)
• you have been in arrears for three years or more.

clutton_2

i have had ground rent companies try to charge me an admin fee of £115 +VAT for a £1.75p annual rent - so i read the lease and no admin fee is mentioned so i refused to pay it. they never asked again.