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Ian Rice
When Ian Rice bought his new home two years ago, he did not really think about the lease. Now he is angry to have been "badly sold" by an unfair contract.
"We think we are trapped in a lease, the developers were not honest with us, they told us that we had to call their lawyers, who did not warn us about it. no hidden service charges in the lease, "he told the BBC.
Ian thinks it will cost him more than £ 20,000 to get out of the lease.
But stories like his have prompted the Competition and Markets Authority to announce a survey of the leasing system.
He said that he wanted to know if people are treated fairly when they buy a home.
Unfairly treated
Ian Rice is convinced that he was treated unfairly: "It was a new build and the sales representative said that the land rent going up to £ 250 a year, it was useless to buy the property freehold. "
But when the Liverpool-based builder decided to add an extension, he had a shock. "We discovered that there were all sorts of clauses on the lease.
"We should pay permission fees to build an extension or even to paint our doorway."
He is sorry to have mis sold the lease and the fact that the developers have now sold freehold and that the new owners have doubled Ian's purchase cost.
"It will cost me over £ 20,000 to buy the full property and pay the badociated legal fees," he said.
Deceptive practices
The CMA opened its investigation after MPs and consumer groups expressed concern over unfair, costly or onerous lease agreements.
"Our investigation will provide a better understanding of potential misleading practices and unfair terms to better protect people who buy a home in the future," said George Lusty, senior director of consumer advocacy at the University of Toronto. AMC.
The watchdog writes to developers, lenders and free owners asking for information about how leases are sold and managed, as well as the terms and conditions of their contracts.
He also wants to understand the impact of these practices on owners and asks users to share experiences that could be useful for his work before July 12th.
What will the survey cover?
The CMA's Consumer Protection Law investigation will focus on two main areas:
- Potential bad sales: whether the persons who purchased a property have the necessary information to understand the obligations they incur, for example the obligation to pay land rent over a period of time, or if they fully understand their capacity to buy their full property.
- Potential abusive conditions: if people have to pay excessive fees because of unfair contract terms. This will include the costs of administration, service and "permission" – where landlords must pay free owners and managing agents before making home improvements – and ground rents, which can sometimes double all 10 years.
In March, a committee of deputies called on the CMA to investigate leases.
The Housing, Communities and Local Authorities Commission has stated that the UK's leasing system has left a number of owners in unsaleable and non-marketable homes.
He said tenants of new buildings are often considered a source of profit.
"For too long, homebuilders and developers have not been sufficiently transparent about what leasing actually means, which has led to three out of five [people] the impression of being poorly sold, "said Mark Hayward, general manager of NAEA Propertymark, an agency specializing in the trade of realtors.
"The purchase of a property is a huge undertaking and this should be an exciting time, but for thousands of homeowners, this has created financial difficulties as they are trapped in confused contracts with homeowners It's heartening to hear the AMC take steps against any company deemed to be misleading by consumers. "
"Leaseholders have always been scammed by free owners for decades and on a huge scale," said Louie Burns of the Leasehold group of companies.
"By resorting to dishonest practices, such as expensive rents, unnecessarily high service fees and one-time bills, unfair and excessive authorizations, and unreasonable costs of franking or extending leases, free owners have effectively owners to ransom.
"It did not happen by accident, it's the result of a concerted effort by greedy, avid owners and developers to extract every penny possible from lease holders, many of whom simply did not understand." the leasehold implications as they did not have the information at the time of purchase. "
The difference between a free owner and a tenant
Someone who owns a property, including the land on which it is built, is a free landlord.
With a lease, the person owns a lease that gives him the right to use the property. But they must always get permission from their landlord for any work or modification of their home.
When a rented apartment or house is sold for the first time, the lease is granted for a fixed term, usually between 99 and 125 years, but sometimes up to 999 years – although people can extend their lease or buy the full property.
But leasehold owners often have to pay high rent and fees if they want to make changes to their homes. A rented house can also be difficult to sell.
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