Any suggestions to this reader will be gratefully received.
We have recently been trying to sell the house (due to poor health). It appears to be undervalued by more than 20% when compared with the surrounding market prices. This is as I understand it because there are “ransom strips” built into the estate, which are for the sole purpose of generating ransom money income to the “freeholder” of the “strips”.
In the terms of the sale, we are also required to pay a £318.00 leasehold transfer fee to pass on this set up to our purchaser. Which at present we simply can’t afford.
The management company involved is First Port (originally OM Perverel). They have made it clear that we won’t be able to sell the house unless we pay them the £318.00 fee immediately, and that any further delay may cause delays to our sale, bla di blah, with the usual Law Society references ….
The ransom strip areas as I understand it are still owned by David Wilson (possibly his pension fund) I think. The monthly management fees are quite high for what we get back in return. The estate comprises more than 100 units of mixed ownership (leasehold flats, freehold and leasehold houses, and a small element of social housing). Many of the properties were purchased on a BTL basis, and on a 100% or even sub-prime mortgage basis. A clause in the Deeds of Transfer states that we need a 50% quorum of homeowners to be able to appoint a different managing agent. A cohesive joined up effort to achieve this will be unattainable due to the mix of ownership and interests present.
I worry that this “ransom strip” common area disclosure will dissuade our current purchasers from continuing with the purchase of our property. We will be financially ruined if the current sale falls through as we can no longer afford to pay the mortgage (which is with NRAM, which is another story in itself). We currently have a tenant in the property and are living elsewhere (the tenant won’t move out, but that is another story again). I am unable to work, but my wife still does, but we have had to put ourselves into a considerable amount of additional debt just to be able to afford to sell the property.
Do you know of any organisations from whom we might receive some free legal advice? Is it possible or have we just been “caught out” by David Wilson – good and proper, plain and simple?
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You can check your eligibility to achieve right to manage here: http://www.lease-advice.org/publications/documents/document.asp?item=21 and you should do so. With FirstPort (formerly known as Peverel OM Property Management) you are likely paying too much in service charges. This company’s track record was such that it had to change its name (Search the web on “OFT Cirrus Peverel”).
The 50% participation requirement is NOT an insurmountable problem, but it takes time and effort to achieve. Your first step is to serve a “Section 11” notice on the landlord requiring him to provide you with the contact details of the other owners. You will then need to contact them and make the case for taking over the management of the development. I would imagine that getting rid of FirstPort would cause the value of your property to increase — however this may take some time as, speaking from experience, it’s likely that there is a backlog of issues that require additional expenditure.
There are no quick fixes, and the fee demanded by FirstPort is always going to be payable (it will likely increase in fufure — but if you have RTM you can scrap this). Mostly it shows that you are not behind in your service charges, which would then be a liability of the new owner. What you might do is ask the new buyer, as proof of earnestness, is pay you a sum for the documents, which is to be 100% refunded if they purchase the property. They cannot buy without seeing these documents.
LEASE (link above) can help you with a Section 11 notice. It’s very simple and the landlord is legally required to give you the information.
I would recommend you make a complaint to CMA ( previously known as Office of Fair Trading ) and ask if the “ransom strips” are unfair contract terms for sale of freehold houses by David Wilson Homes..
From Eddy:
Though many of us on our David Wilson Homes development are retired we’re not officially a Retirement Development, but our situation does seem very similar to the poster’s.
One attraction for us was being able to buy a new house without a garden while at the same time having communal gardens to enjoy. David Wilson Homes said before selling to us that to maintain the gardens (and the driveway and lighting) we would have to pay a few hundred pounds each year and they would be appointing a Managing Agent to see to it all.
Another attraction was that they told us the houses would all be Freehold, not Leasehold. So we thought eventually David Wilson Homes would offer us the gardens etc, and we would then probably need to form a Management Company to take ownership and look after them.
But when we looked into it, we found that as this development is made up of Freehold houses and Leasehold flats (with some groups of flats owned by housing companies), setting up a Management Company wouldn’t be straightforward.
But then we learned that David Wilson Homes had already set up a Residents Management Company for this development – although we were a bit puzzled why the word Residents appeared in the name because David Wilson Homes never told us about it. We’ve never been involved in it and they didn’t seem to want us involved in it.
So, like the poster’s development, this David Wilson Homes development seems intended to be run by a Managing Agent which David Wilson Homes appointed, while David Wilson Homes looks like it wants to keep hold of the communal gardens and suchlike. Like the poster, we can’t imagine why David Wilson Homes wants to keep hold of the strips of communal ground though there has to be a reason – and it’s probably financial.
And why did they offer the houses as Freehold, rather than Leasehold, if they intended for the development to be run like a Retirement Development? That was rather misleading.
Although the set-up here suits some people very well, a fair number of us would like for all of us to chip in and buy the Freehold of the communal gardens etc, but given the circumstances we really could do with help from people with experience of this situation. At the time one neighbour wrote to LEASE but LEASE wrote back saying they only deal with developments where owners are Leasehold.
All ideas or information will be very much appreciated!