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The Leasehold Scandal

News Article 1 | News Article 2 | News Article 3 | Peverel Action Group | Truth about Solitaire

Carlex | CARL | Channel 4 News Broadcast on the scandal

Read the articles and visit the links on this page to get the full picture. If you are in this position and want to fight back, then contact Carlex via the link above.

If you own a leasehold flat or house in England and pay service charges to a 'freeholder' or 'landlord' (usually collected via a management company) you are very likely being overcharged to the tune of thousands of pounds. You may also be getting a sub-standard service from the management company despite paying through the nose.

The whole leasehold property industry in this country seems to be in the hands of a very few companies. The main names that are coming up all the time are Peverel, Solitaire, Fairhold and the 'Consensus Business Group', who are linked to or own the others. While the most recent revelations have been about retirement apartments, many younger people are complaining about non-existant service from management companies who are supposed to maintain their homes.

The most common way of raking in money from retirement apartments is to charge the residents at least double the market rent for the on site house manager's apartment. The Freeholder may also own the management company, the buidings insurer and the providers of many of the service contracts in the block. They don't put the contracts out to tender and they can overcharge. All the fees go back to the Freeholder.

What is so hypocritical is that in some regions residents have been told that they do not need a full time resident house manager and the management company supply someone who monitors several developments. In other areas residents are forced to pay the wages, council tax and rent (over£25,000 in most cases) for someone who only works office hours, is not on call when off duty and whose duties could easily be carried out by someone off-site. Residents are in fact paying high charges for a careline emergency call system when a manager is living on site but is not on call after 5pm.

The final insult is the 1% of the market value of the property that they will often charge as a 'transfer fee' whenever you sell it (and each new owner again each time it is sold). Another 1% is also charged as a 'contingency' fee to supposedly go towards any future repairs. The Office of Fair Trading is about to rule on this practice and it may be judged an 'unfair term in the lease' and residents will then be able to refuse to pay it.

If you are elderly and your relatives are left to sort out your estate when you pass away, they will be burdened with these charges until they can sell the property (many have already been up for sale for years). If they try and sub-let the property to pay the high service charges, they will find that the landlord charges up to 2% of the market value of the property each time they get a new tenant, which wipes out the rent they may get from the flat.

There is now a growing rebellion among residents all over the country and they are claiming back thousands of pounds. The Lease Valuation Tribunal usually finds in the residents's favour and often awards them back-dated payments. The landlords rely on people not being clued up and being too frightened to fight for their rights. Once they see you mean business they often cave in before going to tribunal (they don't want the publicity) and pay up.

If people stick together and stand up for their rights against these unfair practices and get the service charges reduce, not only will they save money but will be able to sell or pass on their homes more easily in the future.




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