There appears to be a trend in the ‘new home’ housing market and it’s got nothing to do with en-suite bathrooms for every bedroom. It is happening all over the UK and especially in the North East of England and has resulted in many people trapped in their own homes not being to sell or achieve re-mortgage.
The situation occurs when the builder or the developer of the estate sells a new house with a leasehold to the property (for example for 999 years). This sounds ok if slightly unusual as you would expect to buy a new house as a freehold in most instances. However, the developer then sells the freehold of your property to a third party for them to manage. With the third party now the owner of the land, they have control over the charges they can impose for ground rent. The most common repercussion of this is that the third parties have been doubling the ground rent fee every 10 years, which can be a clause hidden in the leasehold documentation. So, whilst this may first appear fairly low, within 40 years it could be unaffordable.
There have also been cases where the third parties have then sold the freehold on again and for every change in ownership new rules can be imposed leaving you feeling out of control in your own home. This often happens when the developer offers a sales package that includes their “pet” conveyancing team. They may not be as diligent as your own solicitor should be, to highlight this scenario and in many instances the implications of this ground rent situation has gone un-noticed and unchallenged. When you use a trusted solicitor, they are working for you and you alone, and will alert you to any irregular clauses in agreements for the purchase of freehold or leasehold properties.
If you find yourself in this unfortunate position you may have grounds for a claim against the original conveyancer who processed the sale of the house. For more information on this or any legal matter speak to the team at North Devon Samuels Solicitors on 01271 343457
