When did it become the norm?
The title to this post may seem a bit obscure, but whilst we have been putting our strategy for CALAFEX together, we couldn’t stop thinking about, when, how and why developers started to sell off the free hold and have property management companies responsible for the developments upkeep.
In the area that one of the admin’s lives, there are many small ‘niche’ developments, that are marked ‘private road’ and maintained by Peverel OM – which appears to have become the norm.
What happened to the day’s when a house was built and the owners purchased the freehold at the same time and the council were responsible for it?
Why are Councils (after all they give the go-ahead) allowing developers to build on land, to sell of the freehold and appoint PMCs?
Why can’t developers build developments with public access, that isn’t via a private road and is the responsibility of the local council to look after. Obviously, we understand why flats / apartments require PMC’s – but that is a separate issue.
Homeowners are paying council tax for a reason and for them to be charged that, plus a PMC charge is unreasonable.
Some where along the line, it must have become the ‘norm’ for Councils to approve developments, on the proviso that they wouldn’t be responsible for it, until a later date. By which time, the developer, freeholder, PMC have all profitted from this.
We need to get to the bottom of this fact, before the government start putting pressure on developers to build homes in the future, otherwise, the government are pretty much holding the gun to homeowners heads and saying, “here’s a home, to live in it, we want council tax and for you to pay hidden charges”
Money clearly talks and I’m sure this entry will cause a stir, but when you look at the bigger picture, it’s true. This type of transaction is now the norm and it’s time for change!
February 6th, 2010 at 11:53 pm
Are we going to have ‘leaseholdgate conspiracy’ exposed which is a gateway to use us as a ‘money cow’ in order to make others rich and powerful?
February 7th, 2010 at 5:32 pm
Your post discusses leasehold houses whereas this concerns flats. Leasehold has been there for many many years but in my opinion the present system relates to houses being built for investment rather than for residents. We bought our off-plan flat from St George Developments (part of Berkeley Homes) in 1997. Unknown to us at the time of our first enquiry the head lease dated May 1995 stated that the block manager would be appointed by the freeholder and that the freehold had been sold to OM. We asked the sales manager who their target market and ideal buyer was but received an elusive answer. Much later we discovered that the only flats sold in the UK were those few that had failed to be sold to punters in HK. For the last few years the proportion of flats built out of new ‘homes’ has exceeded 50%. The punters of HK were replaced by UK punters in the naughties and was a contributory factor in the downfall of Alliance & Leicester, Bradford & Bingley, Chelsea, Halifax, and Northern Rock.
February 8th, 2010 at 5:40 pm
Neil, thank you for your posting that is leading me to give further back up to my statement and hope that is what TTAS is trying to convey.
It appears there are 2 types of leasehold properties are being built which are mushrooming. The council are approving such new developments for others to print money at the cost of the leaseholders/freeholders.
1. Leasehold properties for leaseholders.
This type the land and building is owned by the landlord (lessor), who appoints Management Company to mange his land and property. The leaseholders own the right to live and use the amenities for the limited period. After that the building and the land reverts back to the landlord. The leaseholders pay ground rent to the landlord and service charge to the Management Company for usage of the property and land.
2. Freehold property for freeholders with leasehold access road
In this type the building is freehold, therefore, no ground rent or service charger to be paid. However, the outside land and access road is owned by the landlord, therefore, the freeholder of his own property has to pay the ground rent to the landlord and service charge to Management Company for the usage of the outside land. They also have to pay full council tax at the same time.
It appears to be money making scheme which public need to made aware and stopped. I believe the new buyers can stop it if they refuse to buy such properties. They have the power to force the council and delvelopers to stop the explotation. I hope that’s the message TTAS is trying to convey.
February 8th, 2010 at 6:14 pm
I’m a bit unclear about the point of this thread.
I’ve owned both a leasehold flat and a freehold house both managed by PPMG (Peverel Property Management Group). The freehold house was just that: freehold house “with a service charge”. There is no such property as a “freehold with leasehold access road”. In that scenario you’re not leasing anything. You own the freehold to your house, and pay a contribution to the common areas, and possibly the access road. You don’t lease the road (however you might lease a nominated parking space).
Even if you do pay a service charge, the council can still “adopt” the road.
It’s an important point to note, as it’s far easier to get your council to repair street lights than a PPMG co – even if the road (like mine) was on a private estate. You wouldn’t want to have to contact them when the lights weren’t working.
And of course you have to pay your council tax. That money isn’t just used for road maintenance (fire, education and social services etc etc).
What exactly are we trying to stop (goes back to my first point)?
You can’t stop people buying land. And there’s already a way of buying the freehold and sharing it amongst a group of owners (collective enfranchisement). But as long as you’ve got dwellings, stacked vertically, you’ll always have a need for leasehold properties as no one person can physically lay claim to the land beneath them. This is not directed at any one person – but you must realise what buying a leasehold property involves surely? You’re just buying the right to live there for xx years and sell that right within that time. You don’t actually own anything.
Although… you could campaign that every new build flat came with a share of the leasehold but that would probably stop house builders in their tracks.
February 9th, 2010 at 1:41 pm
Anon I own a freehold house and pay rent to E&M which is written on the invoice as fixed rent. I also pay keep of the communal area to Solitaire which is written on the invoice as variable rent charge. I do not rent a garage or anything else except use of the road and car park. I assumed I am paying rent because one only pays rent to the landlord who is renting the space for use, therefore, will be leasehold land. I will have to read on it to understand how it is constructed. I assumed it was a norm for everyone and that is what TTAS are referring to.
This development owns a community centre which I have already raised 5 questions under the tag “Have Proof That Solitaire / Peverel Have Your E-Mail” dated November 12th 2009 to Andy.
The landlord Holdings & Management (Solitaire) Limited responded which is listed under my initial NV entry dated December 3rd. 2009. Clare of H & M discloses in her letter to me,
“Holdings and Management (Solitaire) Limited are part freeholder and part rent charge owner of Compass Point.”
I pay rent not service charge to two different companies but certainly own a freehold house at the same time.
I am still waiting for the response to clarify it and so watch the space.
It is certainly a learning curve for all of us to come together to find parts one by one of the jigsaw puzzle created by one of the largest management company, builders and council in the country.
February 10th, 2010 at 6:29 pm
Nicky,
You may be interested to know NH is leaving Peverel on 19th Feb.
Replacement is a KG.
February 11th, 2010 at 3:00 pm
Nicky,
Are you buying your property under a part own/part rent scheme where you have bought say 50% of the freehold and renting the other 50% ?
You need to buy a copy of the “freehold title” from Land Registry Online and check whether the freeholder is your self OR yourself plus another party. Also there may be some information attached to title documents regarding the annual payment for maintenance of communal areas.
February 11th, 2010 at 3:28 pm
It seems that Barratts have been selling leasehold houses on 155 years lease in Stoke on Trent area. This matter was raised by a prospective buyer of a leasehold house at the Landlordzone forum under thread no. 25734
February 11th, 2010 at 4:13 pm
No my terraced house is 100% freehold and only share communal area .
The Community Centre is leasehold on the lease, which does not say a part leasehold and a part freehold. Solitaire may be using 2 companies for leasehold and freehold. First they made it inhabitable due to neglect and then bought for nothing but have been charging us for the upkeep.
We are charged for sweeping the roads in our development but usually wind does the work. Last time, I saw sweepers working, who informed me that they are employed by the council. I am wondering if council has adopted the road now without my knowledge. My neighbor told me that Council is trying to use the Community Centre for crèche which we will be opposing. Something is being cooked.
Andy must respond now to throw some light.
February 12th, 2010 at 4:22 am
Nicky,
Buy a copy of the property title for your house and see what it says. If you own 100% of the freehold, then you should not be paying rent .
February 12th, 2010 at 9:06 am
Nicky,
You need to complete form OC1 from the Land Registry:
http://www.landreg.gov.uk/assets/library/documents/oc1.pdf
You can complete the form online and print it out (you can’t save it with your personal details) or just print it and complete by hand.
You then need to send this to the Land Registry Telford Office:
Land Registry Telford Office
Parkside Court
Hall Park Way
Telford
TF3 4LR
TEL: 01952 290355
with the Application Fee – which I think is around £25 but call the Land Registry first and confirm.
Hope that helps?
Nirmal
February 15th, 2010 at 10:56 am
It should cost 3 or 4 pds to buy a copy of the freehold property title from Land Registry online ( same for a leasehold title ). Just type in the postal code of the property and you will be offered the freehold title or leasehold title (if applicable) to choose.
And costs about 25 pds if you want to buy a copy of the lease for which a application form is required.
February 15th, 2010 at 11:32 am
Thank you all, your contributions mean a lot not just for me but for other too, who may dig out their leases/land registry to investigate.
I checked the land Registry Number, which is: NGL:428112
The builder has created freehold houses and 4 blocks( leasehold ?). We the freeholders are named as Grantor. The ‘Perpetuity Period’ means a period of 85 years which is only applicable for the communal amenities areas, access road and so forth.
It states,
“The Grantor as beneficial owner hereby grants to the company the perpetual yearly estate rentcharges of (a) fixed rentcharge of £5.00 and (b) a sum hereinafter called the ‘variable rent charge’”
“The Company has agreed to provide maintenances services in consideration of the grant to it of the rentcaharge ……”
The communal area is not leasehold at all as I thought. As far as my understanding is that our council, builder or land owner have created a “cash cow” by giving the communal land to the Management Company for 85 years at the same time pay rent for it.
Am I the one who got properties with faults or is it norm as may be one doesn’t read ones legal documentation?
Any suggestions will be most welcome. Perhaps admin can add to their list to take to PM with petition.
February 19th, 2010 at 5:09 am
Some info on “rentcharge” :
http://www.go-nw.gov.uk/gonw/PeopleSustainableCommunities/Housing/Rentcharges/?a=42496
February 24th, 2010 at 10:59 am
Thank you Bruce.
We do have an Association run by a Barrister who advised me that we cannot get rid off Solitaire. I will send him the link and see waht he has to say.