Estate agents who have acted on behalf of developers in selling new-builds could be drawn into a redress scheme for mis-sold leaseholds, it has been claimed.
Louie Burns, managing director of Leasehold Solutions, which helps home owners extend or purchase their leases, says he is helping compile evidence showing that sales agents on new developments told buyers they could buy their lease, which later turned out not to be the case.
He said: “Virtually all buyers were promised once they have owned a flat for two years that they would be able to buy their freehold for a few thousand pounds.
“That stopped leaseholders from looking deeply into the lease.
“Some put money aside to buy the freehold but they were then sold to ground rent investors with the owners never being told about it.”
Burns said most of the claims are oral, so there is nothing in writing to prove the claims, but he hopes if there are enough people highlighting the same issue then litigation could be brought.
He said: “We are in the process of getting written statements showing what sales agents told a buyer.
“There are tens of thousands of people who will attest to this. If an agent gave that advice purposefully they could be held responsible.
“We are taking counsel advice on whether thousands of written statements to say ‘this was said to me’ would be enough for litigation.”
Burns added that developers are “morally responsible” for turning leaseholds into an asset and for creating leases with onerous terms, while conveyancing solicitors have “legal culpability”.
It comes after Labour MP Justin Madders successfully presented a Bill to Parliament that could see a redress scheme set up for home owners stuck with unfair leasehold as well as a statutory calculation for those wanting to extend or buy their lease.
PPI-style compensation scheme for leasehold home owners could pay out billions
Ok this chap is talking absolute drivel. Firstly (and he is talking about flats and not houses) how is one flat owner supposed to buy their lease. They would either have to buy the whole freehold, or the group of flat owners on the building buy the freehold together. The Freeholder won’t sell off one portion of the freehold. Secondly as estate agents, we can only pass on what we are told, we are not leasehold experts, it is for solicitors to clarify the score with regard to the lease/freehold etc and the service charges.
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“He said: “Virtually all buyers were promised once they have owned a flat for two years that they would be able to buy their freehold for a few thousand pounds.”
I am fairly confident that I can call this bloke’s hand of complete and utterly unadulterated ******** on that one – and I haven’t even looked at what cards I’m holding.
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This will have been under pressure on site sales consultants for major builders, not estate agents, as most of the big boys direct sell.
Even if that did stop “leaseholders from looking deeply into the lease”, that’s the conveyancers job.
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