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  • FIRST POST
    • suiyat`
    • By suiyat` 5th Jul 18, 4:02 PM
    • 16Posts
    • 6Thanks
    suiyat`
    Mis-Sold Lease Hold Agreement???
    • #1
    • 5th Jul 18, 4:02 PM
    Mis-Sold Lease Hold Agreement??? 5th Jul 18 at 4:02 PM
    Hello All

    Bought a newbuild house 7 years ago, with a leasehold - 250 per year. not a problem at the time.

    had big issues with the conveyancing, and the solicitors in question were awful, and we ended up going to the ombudsman to complain, and got compensation for poor service. They closed business shortly after.

    So, this past January (2018) we received an invoice from the leaseholding company for a ground rent charge which was an increase of around 30% - to 325 per year.

    Looked at my deeds, and it states within them after 7 years there will be an increase, and subsequent increases every 2 - 3 years. Fair enough.

    My issue is that i cannot recollect this being brought up by our solicitor during one of our few meetings, other than the annual 250.

    Due to the incompetence that they showed during the conveyancing, I would think this would have been missed out when reviewing the deeds.


    Big question is, with my solicitor being closed for many years now, would i be able to either gain compensation for the missell, orbe reverted back to the original cost of ground rent?

    Thanks for feedback upfront.
Page 1
    • zx81
    • By zx81 5th Jul 18, 4:06 PM
    • 19,360 Posts
    • 20,684 Thanks
    zx81
    • #2
    • 5th Jul 18, 4:06 PM
    • #2
    • 5th Jul 18, 4:06 PM
    Even if compensation was owe, and it seems unlikely it would be, there is no one to pay it.

    And I can't see the leaseholder agreeing to freeze your ground rent for no reason.
    • Slithery
    • By Slithery 5th Jul 18, 4:18 PM
    • 972 Posts
    • 1,557 Thanks
    Slithery
    • #3
    • 5th Jul 18, 4:18 PM
    • #3
    • 5th Jul 18, 4:18 PM
    Surely you read the deeds before purchasing?
    • suiyat`
    • By suiyat` 5th Jul 18, 4:28 PM
    • 16 Posts
    • 6 Thanks
    suiyat`
    • #4
    • 5th Jul 18, 4:28 PM
    • #4
    • 5th Jul 18, 4:28 PM
    'Surely you read the deeds before purchasing?'

    This is what we paid the Solicitor to do as it is their field of expertise - other wise we would not have needed the solicitors services. She went through them with us but we cannot recall her informing us of the increases from year 7.

    Based on the way the conveyancing went, i would not be surprised that this was overlooked by 'the expert' and not brought to our attention.
    • HappyHarry
    • By HappyHarry 5th Jul 18, 4:37 PM
    • 797 Posts
    • 1,163 Thanks
    HappyHarry
    • #5
    • 5th Jul 18, 4:37 PM
    • #5
    • 5th Jul 18, 4:37 PM
    Even if compensation was owe, and it seems unlikely it would be, there is no one to pay it.

    And I can't see the leaseholder agreeing to freeze your ground rent for no reason.
    Originally posted by zx81
    ^^ This

    Do you think that you would you have turned down the property even if this clause was bought to your attention?
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • ACG
    • By ACG 5th Jul 18, 4:43 PM
    • 17,819 Posts
    • 9,605 Thanks
    ACG
    • #6
    • 5th Jul 18, 4:43 PM
    • #6
    • 5th Jul 18, 4:43 PM
    Surely there is someone to pay it?
    If I gave bad advice and went out of business, we have a financial services compensation scheme, presumably there is something similar in the legal world.

    No idea if the OP has a leg to stand on or not, but you could maybe speak to the legal ombudsman in the first instance?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • eddddy
    • By eddddy 5th Jul 18, 4:57 PM
    • 7,179 Posts
    • 7,128 Thanks
    eddddy
    • #7
    • 5th Jul 18, 4:57 PM
    • #7
    • 5th Jul 18, 4:57 PM
    Surely there is someone to pay it?
    Originally posted by ACG
    Yep - I believe that they are required to have professional indemnity insurance.

    (If they didn't have insurance, and you have a valid claim, the Solicitors Regulation Authority has a compensation fund.)
    • takman
    • By takman 5th Jul 18, 5:51 PM
    • 3,775 Posts
    • 3,436 Thanks
    takman
    • #8
    • 5th Jul 18, 5:51 PM
    • #8
    • 5th Jul 18, 5:51 PM
    'Surely you read the deeds before purchasing?'

    This is what we paid the Solicitor to do as it is their field of expertise - other wise we would not have needed the solicitors services. She went through them with us but we cannot recall her informing us of the increases from year 7.

    Based on the way the conveyancing went, i would not be surprised that this was overlooked by 'the expert' and not brought to our attention.
    Originally posted by suiyat`
    If they were so bad that you had to make a complaint about them why did you trust them so much that you didn't even read the lease yourself?.

    I can't believe people spend hundreds of thousands of pounds and don't even spend an hour or two reading the documents!.
    • Smi1er
    • By Smi1er 5th Jul 18, 6:07 PM
    • 603 Posts
    • 418 Thanks
    Smi1er
    • #9
    • 5th Jul 18, 6:07 PM
    • #9
    • 5th Jul 18, 6:07 PM
    'Surely you read the deeds before purchasing?'

    This is what we paid the Solicitor to do as it is their field of expertise - other wise we would not have needed the solicitors services. She went through them with us but we cannot recall her informing us of the increases from year 7.

    Based on the way the conveyancing went, i would not be surprised that this was overlooked by 'the expert' and not brought to our attention.
    Originally posted by suiyat`
    It's always someone else fault isn't it.

    I bought leasehold flat a few years back. Yes, I didn't fully understand all the legal jargon in the lease but I ensured I read it. Especially the section on ground rent. Then I re-read it.
    • Cakeguts
    • By Cakeguts 5th Jul 18, 8:29 PM
    • 5,219 Posts
    • 7,913 Thanks
    Cakeguts
    Are you saying that you signed a piece of paper to say that you would buy a house and you didn't know what you were buying? Didn't you read what you were signing before you signed it?
    • Tom99
    • By Tom99 6th Jul 18, 5:00 AM
    • 3,007 Posts
    • 2,061 Thanks
    Tom99
    A lease can easily be 50 pages long and you can bet the upward review will be buried on page 48. They are not that easy for the complete novice to read and I can understand that many buyers will rely on the summary produced by their solicitor, it is after all exactly what you are paying them for.

    However you are out of time to make a normal claim for professional negligence which must usually be started within 6 years of the negligence occurring.

    There is a get out however, if you can show that you could not reasonably have known about the negligence until a later date, you have 3 years from the date you became aware of the negligence to make a claim subject to an absolute limit of 15 years.

    Would the average buyer have been expected to find out about the review clause through their own enquiries, if not then you will be within the time frame to make a claim but that is only the 1st step.

    You then have to show that not alerting you to the review was negligent. It is certainly an omission but whether is is negligence would be debatable.

    If you are within the timescale and think you have a claim the next hurdle is to find someone to take to court after all this time.

    Many solicitors practice as part of a partnership and I do not know whether on dissolving the partnership they remain liable for negligence. If a sole practitioner was employed then you will have a name to go after, even if they are retired.

    Solicitors are required to have professional indemnity insurance to cover claims for negligence and I suspect, like surveyors, they are required to keep run off insurance for 6 year when the cease business. Unfortunately you are out side that timescale but that itself would not prevent you making a claim.

    The final thing to consider is the amount of your loss. You are paying an extra 75pa and if you valued that in perpetuity at 5% you get to a capital value of 1,500. However it might be argued that you would have paid the same price for the property even had you known about the review so you have not actually lost anything.

    Since your loss, if any, is quite small and will be dealt with as a small claim, you are not going to be able to recover any legal or other fees you spend in pursuing the claim.

    The Solicitors Regulation Authority compensation fund would only come into play if the solicitor should have been insured but was not. I doubt there is a requirement to have insurance for claims 7 year old.
    • InterestedParty2018
    • By InterestedParty2018 6th Jul 18, 11:32 AM
    • 128 Posts
    • 71 Thanks
    InterestedParty2018
    A lease agreement is indeed a long document which can be very difficult to follow with all the legal jargon. However, all the clauses are there for a reason, and anyone investing huge sums of money buying their leasehold interest should read the document in its entirety to fully understand their obligations for the duration of the term.

    If you dont understand a particular clause, ask your solicitors for a layman's explanation.

    A clause that is pertinent to one owner (e.g. a covenant regarding pets) may be irrelevant to some purchasers, but exceptionally pertinent to another. Paying service charges annually in advance my be a financial burden too far for some, but not for others. So read all of it.

    Furthermore, calculating your genuine loss versus the cost & hassle of taking the matter further, and the road to recovering compensation (if due) may be disproportionate.
    • sal_III
    • By sal_III 6th Jul 18, 11:49 AM
    • 653 Posts
    • 666 Thanks
    sal_III
    It's always someone else fault isn't it.

    I bought leasehold flat a few years back. Yes, I didn't fully understand all the legal jargon in the lease but I ensured I read it. Especially the section on ground rent. Then I re-read it.
    Originally posted by Smi1er
    Same here, In my case the paperwork was about 400 pages. Took me a while to read it all, but I did and then asked my wife to do the same. Then reread the parts where money are concerned.

    In my mind I was paying the solicitor to facilitate the deal and communications with the vendor solicitor, and at best highlight some glaring issues. Not to think instead of me what is right and wrong.

    In this specific case I wouldn't bother to seek compensation for something that costs me 75/year extra.

    What is the wording in the Lease? I doubt it states every 2-3 years, these things are usually very specific. Is the increase linked to something like RPI? If it's a free reign for the Freeholder to pick a number I can see how this might affect the sell-ability of the property and lower it's price.
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