Negligence Claims against Property Solicitors

Excessive Ground Rent may become the next PPI scandal.

Claims against Housing Developers and Property Solicitors are on the increase and look to continue to rise as the issue surrounding leasehold ground rent becomes more prevalent.

These claims involve those people who purchased leasehold properties with ground rents that can double in a short space of time, resulting in the purchasers being unable to afford to buy the freehold or resell the properties as mortgage companies are refusing to give mortgages on these types of properties.

These properties have increasingly been sold by developers in the North West of England with clauses that allow the ground rent to increase in later years. Most developers then sell the freehold to a third party, often an offshore company with nominee directors. It is estimated that over 100,000 types of these homes have now been sold in the UK. With 40,000 of them being sold in the last 5yrs.

The basis of the complaints against the Solicitors are that clear advice was not given to the purchasers by their Solicitors regarding the increasing ground rent and so the purchasers were not aware of, or understood, the implications of the terms of the ground rent. Often these clauses are contained within the small print which is the duty of the Solicitor to read and notify the purchaser of. Therefore, any Solicitor who advised on these properties is at risk of a potential claim.

The Government have stated that they will step in and ban these types of leaseholds on new build properties. However, this will leave those 100,000 home owners who have already bought these properties without any resolution.

Phoenix Legal Limited are currently investigating claims on behalf of purchasers against their previous solicitors and the advice that may or may not have been given.

If you or someone you know has unfair ground rent clauses then please do not hesitate to get in touch with us for a free no obligation consultation.

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