Thousands of tenants will get land rent refunds of thousands of pounds – find out if you can claim

THOUSANDS of people living in leasehold properties should receive reimbursements for unfair land charges.

Nine property companies have been ordered to remove punitive clauses from lease contracts, the Competition and Markets Authority has said.


Tenants could be compensated after a CMA decisionCredit: PA: Press Association

Thousands of landlords living in leasehold properties have unwittingly signed contracts with clauses that mean their ground rent doubles every 10 years.

The companies owning the freeholds have now been ordered to remove the terms of the lease contracts.

Tenants will see their ground rent stay at the original amount from the time the property was first sold, and the cost will not increase over time.

Refunds will also be given to those who have already seen their land rents double.

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More than 5,000 households are expected to be compensated following today’s announcement.

This means a total of 20,000 landlords will be compensated or have their ground rent stay at the original amount following the CMA’s investigation, which began in 2019.

The nine companies included in this latest decision are:

  • BDP Freehold Limited
  • Limited Mortgage Incentive Fund
  • The Bridges (Darlington) Management Company Limited
  • Bessant Properties Limited
  • Brigante Properties Limited
  • Furatto Limited and Long Term Reversions No 1 Limited
  • SF Ground Rents No18 Limited, SF Ground Rents No15 Limited and RMB 102 Limited
  • Sarum Properties Limited
  • Taylor Court Limited

Four major developers – Crest Nicholson, Redrow, Miller Homes and Vistry – agreed to work with those companies that purchased the freeholds to remove the doubling conditions.

Renters should not do anything to request a refund. They will be contacted by the company owning the full property.

If you have left a leasehold property and think you may be entitled to a refund, you should contact the company that owns the freehold.

Sarah Cardell, Acting Chief Executive of the CMA, said: “For years tenants have been plagued by what we believe to be unfair practices. That’s why we’ve sought to address the issue by taking action against some of the biggest names in the industry.

“Thanks to our work, more than 20,000 people are now breathing new life, free from problems such as costly doubling of land rents.”

Secretary of State for Leveling Greg Clark said: ‘This is great news that will see thousands of tenants get the refunds they are entitled to.

“We will work with the AMC to continue to challenge the industry on its practices, so that we can ensure that more tenants get the fair deal they deserve.”

The AMC said the broader lease investigation is entering its final stage as it works with the remaining companies that have purchased freehold properties from Taylor Wimpey.

This follows a decision last year that saw thousands more tenants seek refunds when Aviva and Persimmon agreed to remove clauses from historic contracts.

What is a lease and am I entitled to a refund?

A lease is where a landlord buys the right to live in a property for a set number of years, but does not actually own the land the property is on.

Leasehold homeowners pay land rent to the landowner, known as the landlord.

Ground rent is a controversial charge paid by owners of a leasehold property. It is essentially a rent paid to the free owner for the land on which the property is located.

But, above all, there is no limit to the amount that the freehold owner can charge in ground rent.

The charges are written into the contracts, but some developers have included clauses that will allow them to double the land rent every 10 to 15 years.

This means they end up with huge bills and often unable to sell their home because buyers don’t want to pick up the cost.

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The Sun previously spoke to a couple who bought a flat in 2009 with ground rent of £250 – which was set to double every 10 years. This means that after age 50 the annual charge would be £8,000.

New rules will effectively set ground rents to zero in England and Wales, but that hasn’t helped people already trapped in homes with those charges.

Thousands of tenants will get land rent refunds of thousands of pounds – find out if you can claim

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