SimonD

Registered with Property118.com
Tuesday 5th November 2019


Latest Comments

Total Number of Property118 Comments: 4

SimonD

11:14 AM, 7th May 2020, About 2 years ago

Walking Watch Fire Safety Charges?

In response to Ian's comment above, this highlights why freeholder landlords should not be embedded in peoples homes at all. Nowhere except England and Wales use such a system for flats. Most places use Commonhold type systems - flat owners collectively own the building, no ground rents, no permission fees or lease extension costs payable, no declining lease. Freeholders are happy to get these fees and yet do not want to pay for remediation. In other words the average leaseholder gets no benefit from paying these fees to a remote entity, and is in effect paying a private tax.
I have some sympathy with his view that freeholders usually have a very small financial interest in the building compared to the leaseholders, yet they are classed as the building owner and have excessive legal powers compared to the leaseholders who have the majority financial stake. Landlords with such a small financial interest cannot expect the building to be remediated for them by the tax payer, however innocent leaseholders deserve such protection. The best thing would be for the landlord to leave the building, the freehold to pass to the leaseholders, and the cost to be paid for by those responsible - the original developer, their insurers and the government (weak building regulations and oversight). The freehold / leasehold system as used in England and Wales complicates matters, with the government expecting freeholders to pay - freeholders naturally want to pass the cost on to leaseholders via the lease because the system allows it.... Read More

SimonD

10:36 AM, 6th November 2019, About 2 years ago

10-point Leasehold reform manifesto

Most of the leaseholders trapped with flammable cladding do not have shares in a freehold company, they are innocent buyers. Their surveyor on purchase was not going to ask about the exterior of the building unless made aware that the cladding was dangerous. It is more obvious where wooden cladding has been used on tall buildings, which seems very stupid when it has been known since 1666 that wood buildings usually burn easily.
I have suggested to ministers how money could be raised to improve necessary, carefully costed social infrastructure including this problem (Bank of England creates the money free of interest, so called Peoples Quantitative Easing. Govt does not want to do this because it is in the pockets of banks and big investors who want to rent money at interest, so government has to raise taxes, sell public assets, rely on unlikely economic growth, or do austerity)
The government is paying for ACM cladding, so should pay to sort out other flammable cladding rather than this continuous damaging delay in the absence of Peoples Quantitative Easing.
Commonhold has not caught on because the sector discourages it including lawyers, and there is a steady existing income stream to freeholders and their associate agents and lawyers from ground rents, lease extensions, permission fees and so on.
I don't want to get into a long dialogue Ian, because we will never agree and you work for freehold interests. Defending long leasehold is like trying to defend slavery, because many leaseholders are captives in a financial sense, or unable to sell their property for a fair price. It would be great if more lawyers would look forward and embrace fairness and justice, rather than defend the indefensible.... Read More

SimonD

20:44 PM, 5th November 2019, About 2 years ago

10-point Leasehold reform manifesto

Contradiction in Ian's comment.
Implies freeholders are caring, long term custodians of the building (which in most cases they are not, just in it to extract as much money as possible from captive leaseholders). But at the same time they have no obligation to pay to replace flammable cladding.
From a leaseholder's point of view the freeholders are a useless obstruction to progress on the cladding issue. The government because of poor regulation and oversight, developers, and their insurers are responsible for paying to get these buildings safe.
The flammable cladding issue highlights the absurdity of leasehold.... Read More

SimonD

19:58 PM, 5th November 2019, About 2 years ago

10-point Leasehold reform manifesto

Fast rising grounds rents for no service, excessive permission, enquiry and admin fees, high costs to enfranchise or do a lease extension. Freeholder appointed managing agents with high service charges who may be impossible to remove in some circumstances, for example if a Housing Association, more than 25% commercial in the building, or an estate of houses. Long leasehold is an unjust, feudal relic, now unique to England and Wales. Everwhere else uses Commonhold, and manages without a remote freeholder, some who are offshore entities, and usually care nothing for the leaseholders other than extracting as much money from them as possible. A freeholder who may have paid just 1% of the building's value for the freehold interest, and yet has near 100% control of leaseholders lives. Freeholders like this will cause more conflict in the building, not less, because leaseholders have to deal with an uncaring, profit motivated entity, which should have no part in their lives or homes.
Leaseholders can make their own decisions about their destiny. If leaseholders cannot or will not agree, then the court can appoint a managing agent from an approved list. The freeholder is often an unnecessary expense and obstruction for leaseholders.
Mortgage lenders should avoid toxic leasehold, look forward, and embrace Commonhold. Leasehold takes longer during property conveyancing and is more expensive, because there are 3 parties in a transaction including the unnecessary remote freeholder.
The "pledge" is useless because many agents and freeholders have not signed up to it, or even if they have, fail to follow it. It is also useless because moving a high starting ground rent to RPI can still make the lease onerous. Ground rent above £250 per year can make the property an assured tenancy, and who knows what inflation will do in future. Many thousands of properties have a ground rent greater than 0.1% of property value which is regarded by some lenders as onerous.
The bigger elephant in the room is out of control service charges, and the great difficulty many leaseholders have in challenging them and holding managing agents to account.
Buildings insurance - another scam where commissions are paid both ways to agent / freeholder and insurer at leaseholders expense, or the freeholder fails to insure the building at all, leaving leaseholders exposed.
Buildings and contents insurance for a 3 bed freehold semi, £130 per year. Buildings insurance for a 2 bed flat, £460 per year. Leaseholders add all the value to the building and their flats, yet suffer from corruption like this.
Clear information at point of sale is needed so home buyers can make an informed decision, not buried in a complex lease document which only lawyers can understand.

No freeholder means -

No unnecessary permission fees
No ground rent
No lease extension or enfranchisement costs.
No speculators controlling peoples' homes and lives.
The lease is a wasting asset for leaseholders which will no longer apply.
No potential forfeiture of the lease.
No mis-selling of houses as leasehold where the freehold was sold on to a 3rd party, and failure to warn home buyers this could happen at point of sale.
Less work for expensive lawyers which has to be good in reducing costs for millions of leaseholders.

A giant ponzi scheme, where a few benefit at the expense of 6 million leaseholders. It is incredible such a system as long leasehold still exists in the 21st century.... Read More