Taylor Wimpey proposes to vary the leases to “convert existing doubling leases to an alternative lease structure, specifically incorporating materially less expensive ground rent review terms”.
LKP urges caution on the part of leaseholders to accept any deal involving turning the ground rents into those linked to RPI.
A number of freeholders have already made an offer to vary the leases to RPI.
What Taylor Wimpey needs to understand – and the murky, anonymous investors who bought these freeholds hiding their beneficial ownership behind nominee directors – is that the ground rent game is exploded.
Taylor Wimpey needs to offer the freeholds to its cheated customers.
This means settling up with the investors who bought them, but that is Taylor Wimpey’s problem.
The whole grisly process of these sales was spelled out by solicitor Mari Knowles to MPs at the All Party Parliamentary Group on leasehold reform last week.
If Taylor Wimpey thinks it is dealing with uninformed and unadvised former customers who can be fobbed off with slightly less predatory ground rent terms, it is going to be rudely disabused.
Dear Mr Boyd and Mr O’Kelly
We wanted to send you an email with the details of the announcement we have made today and which we are currently communicating to our customers.
As you know, Taylor Wimpey announced in November that we would undertake a thorough review of leasehold structures including those with a ten year doubling ground rent clause. Whilst we have always been clear that there is no legal obligation to act on this issue, we do take the concerns of our customers very seriously and therefore have undertaken a significant amount of work to investigate the issues that have been raised.
Today, we are able to confirm the details of a help scheme – Ground Rent Review Assistance Scheme – to be funded by Taylor Wimpey. The proposals below are based on discussions with the current freeholders, lenders and communication with the customers themselves and are aimed at addressing the concerns raised including regarding mortgageability and saleability.
The help scheme, funded by Taylor Wimpey, is to assist customers who purchased from us and still own homes which have a doubling lease. The scheme is being offered by Taylor Wimpey on a voluntary basis to qualifying customers, subject to necessary eligibility checks.
Based on the findings of our review, we believe that the best solution is for Taylor Wimpey to help customers convert existing doubling leases to an alternative lease structure, specifically incorporating materially less expensive ground rent review terms. This will be done via a legal document called a deed of variation. From our discussions with lenders, we are of the view that this proposed measure will also allay concerns around the saleability or mortgageability of our customers’ homes which have doubling leases.
In order to achieve this, as Taylor Wimpey no longer owns the freeholds to these properties, we are working with the organisations that own the freeholds to convert the doubling leases. At this stage, we have engaged with freeholders representing the majority of the properties with doubling leases and these discussions are proceeding well. This gives us a clear view of what we are hoping to achieve and how we would like to help qualifying customers.
Taylor Wimpey will cover the cost of converting the lease terms and will also make a fixed payment towards each customer’s legal costs incurred in relation to the deed of variation. While we believe that changing the lease provides the best answer, if for unforeseen reasons we cannot reach a reasonable solution with a particular freeholder, we will continue to pursue other avenues to help our customers.
While discussions are proceeding well with freeholders, we anticipate that the detail of the process will take some additional time to work through in full and we would appreciate your ongoing patience as we work hard to achieve this positive outcome. In the meantime, we intend to come back to customers again by Friday 23rd June with an update on each individual position. If we are able to come back to customers individually before then, we will of course do so.
We have also established a dedicated customer service centre to support and guide customers. This will include a new section of the Taylor Wimpey customer service website (for info it can be found here www.taylorwimpey.co.uk/leaseholdFAQ) which will include further details, including full qualifying criteria and guidance on how to start the process.
I hope you have found this information useful and it provides you with a thorough overview of how we intend to proceed for our customers. We would be happy to meet with you to discuss our approach. If this would be helpful, please let me know when you might be available and I will ask my office to arrange a convenient date.
While Taylor Wimpey is not legally obliged to take any action with regard to doubling leases, we do recognise that these leases have caused our customers concern. We want to help our customers and we are committed to helping to resolve this.