Both homeowners and landlords have been warned that a lack of consistency from leasehold landlords could cost them thousands of pounds.
Myhomemove is calling for greater consistency and clarity from management companies and landlords, in relation to the charges they levy at clients who are buying a leasehold property.
In 2013, myhomemove managed 8,246 leasehold transactions, 24% of which were for first-time buyers. Analysing this data has revealed that there are vast discrepancies between the amounts charged by management companies and landlords for services including Notice of Transfer, Notice of Charge, Deed of Covenant, Stock Transfer and Application – currently leasehold clients can be charged anywhere from 10p to over £1,000.
Commenting on these findings, CEO of myhomemove Doug Crawford said: “In this day and age it seems incredible that there is no industry standard for management companies and landlords, meaning they have carte blanche to charge leasehold home buyers whatever they want. Over a third of our leasehold clients are charged between £100 and £200 by landlords and management companies; while the really unfortunate ones must pay between £500 and £1,000. These fees are in addition to their moving costs, ground rent and insurance.”
Last year the number of-first time buyers rocketed by 37%, while the number of buy-to-let investors also increased by 19%; with a large proportion investing in leasehold properties such as flats and apartments, especially in boom areas such as London and the South East.
“We appreciate that services cost money, but when a client is left baffled as to the amount they must pay and why, it seems very unfair; especially as they cannot purchase the property without paying these charges and they have no way of ‘shopping around’ for a better deal,” said Crawford.
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Comments
There is a racket going on in this area with certain freeholders making huge amounts of money because their leaseholders cannot fight back against the threats of the freeholders.
If the leaseholder(living in a one or 2 bed flat might be elderly and infirm, too busy earning a crust, new to the process) questions and refuses to pay an incorrect bill, the freeholder sends the debt collecting letters and the leaseholder decides they might end up in court or paying out more if they lose the argument.
The freeholder issues invoices ten times what they should be, admits the mistake and does it again the next year; the freeholder for some reason gets to charge 2 or 3 times what the insurance would cost if the leaseholder did it themselves; the management bills and repairs schedules are beyond normal understanding.
The only way to deal with this is through the Lease Valuation Tribunal, might be something else now, and get together with other leaseholders in the block. It is an unbelievable racket carried out against isolated leaseholders, it has been publicised on TV, but to do anything about it the leaseholder has to have some cash and a huge determination and patience.