9:31 AM, 26th August 2022, About 5 months ago 10
Action by the Competition Markets Authority (CMA) will see landlords who are leaseholders paying a doubled ground rent receiving a refund from the rip-off practice.
And nine more companies will remove these costly terms from their leasehold contracts.
Sarah Cardell, the interim chief executive of the CMA, said: “For years leaseholders have been plagued by what we believe are unfair practices.
“That’s why we sought to tackle the problem by launching action against some of the biggest names in the business.”
She added: “As a result of our work, over 20,000 people now have a new lease of life, freed from issues like costly doubling ground rent terms.”
Greg Clark, the Secretary of State for Levelling Up, said: “This is good news that will see thousands of leaseholders get the refunds they are entitled to.
“Levelling up home ownership and creating a fairer, more transparent leasehold system is a top priority for this government, and these agreements are an example of this in action.”
He added “We will work with the CMA to continue challenging industry on its practices, so we can ensure more leaseholders get the fair deal they deserve.
The companies that bought freeholds from the housing developer Taylor Wimpey must now remove problematic contract terms that cause ground rents to double in price every 10 years, which can lead to people being trapped in homes they cannot sell or mortgage.
The businesses that purchased freeholds from Taylor Wimpey and provided undertakings are:
The businesses that purchased freeholds from Taylor Wimpey who have not provided undertakings yet are:
A further four national developers – Crest Nicholson, Redrow, Miller Homes and Vistry – have also agreed to work with the companies who purchased their freeholds to remove doubling terms.
All affected landlord leaseholders will now see their ground rents remain at the original amount, that is when the property was first sold, and this will not increase over time.
The nine freeholders have also agreed to refund residential leaseholders who had already paid out under doubled ground rent terms and remove contract terms which were initially doubling clauses but were converted so, the ground rent increased in line with the Retail Price Index (RPI).
The original doubling clauses were unfair and should therefore have been fully removed – not replaced with another term that still increases the rent.
This action brings the total number of homeowners that have benefitted from the CMA’s investigation to more than 20,000 after starting their investigations in 2019.
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