We have previously reported on the issues of Ground Rents and the Government’s recent announcement of the Ground Rent Bill. We therefore welcome the news that Aviva and Persimmon have taken further steps to assist leaseholders.
This news comes after the Competition and Markets Authority started enforcement action against four housing developers in September 2020 in an attempt to make leasehold-ownership fairer for leaseholders.
Niki Adkins looks at the announcement and discusses whether other housing developers and freeholders will follow suit.
What have Aviva and Persimmon announced?
The two groups have announced the following pledges :-
How are Aviva going to help leaseholders?
Aviva have pledged:
- To remove doubling ground rents from leases; or inflation-linked ground rents that were varied from doubling ground rents as we touched on in our Deed of Variation for ground rent article. It is understood that the ground rent will be reduced to whatever the ground rent started at before any doubling or inflation-linked increase (for example, if the ground rent started at £200 but doubled every 10 years, we understand that it will be capped at £200 for the entire term);
- To refund leaseholders the increased ground rent that they have paid i.e. any doubled or inflation-increased ground rent paid by leaseholders will be refunded.
How are Persimmon going to help leaseholders?
Persimmon have pledged:
- To sell freeholds for a discounted price to leaseholders;
- To refund leaseholders who have already bought their freehold the difference between the price paid and what the discounted rate would now be;
- To extend the timeframe that buyers have to exchange contracts after reserving a new-build property.
This news will be welcome for thousands of leaseholders who are facing difficulty selling or re-mortgaging their properties as a result of their increasing ground rent.
When will leaseholders receive the ground rent refunds and freehold discounts?
Details of how leaseholders can go about achieving any of the above pledges is yet to be seen, but if it is anything like the Deeds of Variation we have come across from similar housing developers, Aviva and Persimmon may be writing to affected leaseholders in the near future.
It would be nice if Aviva/Persimmon agree to cover the leaseholders’ legal costs, as leaseholders will no doubt need legal representation to, at the very least, check the documentation provided and register their Deeds of Variation or freehold-purchases at the Land Registry.
However, we would be happy to assist anyone in this situation by approaching their freeholder to see how matters can be dealt with quickly and efficiently.
A Leasehold Property Specialist’s view
Niki Adkins, Head of our Leasehold Property Team commented :-
“This announcement couldn’t come quick enough for Aviva & Persimmon leaseholders who are affected by increasing ground rents. For some, they are prevented from selling or re-mortgaging due to the ground rent provision in their lease.
I am hopeful that other housing developers and freeholders will follow Aviva’s and Persimmon’s lead.”
Leasehold Property Solicitors
Our specialist Leasehold Property Team is one of the largest in the region and are happy to discuss any leasehold property related queries that this article may have raised. We have vast experience in dealing with the lease extension process from start to finish.
Please call 01202 499255 and a member of the team will be happy to chat about your situation and your specific requirements.
We offer all new clients a free initial chat with one of our bright, knowledgeable lawyers.
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