A firm supporting leaseholders across the UK says the ongoing Competition and Markets Authority probe should “punish” what it calls “rip off freeholders.”
The Leasehold Group of Companies’ outspoken call comes as the CMA begins an examination of the extent of mis-selling and whether the most onerous leasehold terms, such as permission fees and doubling ground rents, might constitute ‘unfair terms.’
In a letter to the Housing, Communities and Local Government committee, the CMA acknowledged the problems around leasehold sales.
Now leasehold reform campaigner Louie Burns - managing director of enfranchisement specialist, the Leasehold Group of Companies - says: “Leaseholders have been consistently ripped off by freeholders for decades and on a huge scale.
“By employing dishonest practices, including onerous ground rent terms, unjustifiably high service charges and one-off bills, unfair and excessive permission charges, and unreasonable costs to enfranchise or extend leases, freeholders have effectively held leaseholders to ransom. In the worst cases, leaseholders have been left trapped in unsellable and unmortgageable homes.
“This has not happened by accident. It is the result of a concerted effort by greedy freeholders and developers to extract every penny they can from leaseholders, many of whom simply did not understand the implications of leasehold ownership because they were not provided with the correct information at the time of purchase.
“We look forward to the CMA’s investigation and we hope that any freeholders and developers found guilty of mis-selling will be held accountable and punished accordingly.
“We also believe that restitution must be made to leaseholders who have been affected by these scandalous practices; hopefully the CMA will propose an appropriate mechanism for compensation.”
* Estate Agent Today and other Today industry titles are campaigning to replace leasehold with commonhold - we’ve run a series of articles on the campaign, beginning with this story which outlines the broad arguments of the campaign.