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Developers and freeholders agree to overturn unfair leasehold terms

  • 29/03/2019
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Developers and freeholders agree to overturn unfair leasehold terms
More than 40 property developers and freeholders have signed a government-backed pledge which commits them to ensuring that leaseholders are not trapped in unfair and costly deals.


The freeholders that have signed the pledge have agreed to change the terms of leases for existing leaseholders, in a bid to do away with ‘doubling clauses’ which can result in ground rents soaring over a short period of time.

Other industry bodies, such as managing agents, have signed the pledge too and vowed to act “fairly and transparently” when dealing with leaseholders.

Pledge signatories include Bellway, Barratt Developments, Gailliford Try, the Home Builders Federation, Persimmon, Redrow, the Royal Institution of Chartered Surveyors and Taylor Wimpey.


Close legal loopholes

In addition, the government has announced plans to close “legal loopholes” which result in leaseholders paying large fees should they take their freeholders to court over unfair service charges.

It noted that current rules mean that these leaseholders run the risk of being forced to pay their landlord’s legal fees, even if the court rules in their favour, which may result in bills for tens of thousands of pounds.

Heather Wheeler MP (pictured), the housing minister, said the government wanted to ensure there was a leasehold system where people can challenge “exorbitant rates and high service charges”.

She continued: “The plans announced today will stop leaseholders from picking up the tab for unjustified legal costs – creating a housing market that truly works for everyone.”

Stewart Baseley, executive chairman of the Home Builders Federation, said the industry was committed to ensuring that leasehold is used appropriately and remains a safe and secure form of tenure for homeowners.

This pledge is a further demonstration of the industry’s intent to provide homebuyers with clarity, transparency and security ensuring that when used, the terms and conditions of leases are fair and proportionate,” he concluded.


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