In news which will serve as music to many Leaseholders’ ears, one of the UK’s largest home builders Taylor Wimpey has announced its plans to set aside a reported £130m to resolve the problem of unfair ground rent clauses ‘hidden’ within many leases of homes sold by the company, the freeholds of which have now been sold on to 3rd party companies.
This comes just weeks after the Government published its Housing White Paper in which they stated that they intended to ‘consult on a range of measures to tackle all unfair and unreasonable abuses of leasehold’, highlighting the problem of increasing and onerous ground rent payments.
The problem clause within these leases is one which allows the ground rents to double every ten years. This has resulted in once affordable payments in the hundreds of pounds quickly become unaffordable payments in the thousands of pounds per year.
Unfortunately, this has reportedly left some homes which were sold on a Leasehold basis with this particular clause virtually unsellable with a large financial burden being left on those who own them and this news will come as a great relief to the many Leaseholders affected.
However, the Leaseholders who have signed into such contracts must ask questions of their solicitors who are likely the ones to have officiated the transfer and are tasked with checking such contracts before allowing them to be signed. You would argue that a competent solicitor should pick up on such a clause and highlight this to the potential buyer prior to any purchase.
Taylor Wimpey released a statement addressing the matter:
“Our review of leases with ten year doubling ground rents is now complete and, following conversations with freeholders and lenders, we are today announcing measures which will address our customers’ concerns in an appropriate and fair manner.”
“we have already entered into negotiations with the respective owners of the majority of the freeholds to alter the terms of the doubling lease to materially less expensive ground rent review terms, with the Group bearing the financial cost of doing so. In the event that we are not able to reach agreement with individual freeholders, we will continue to pursue other avenues to help our customers.”