Residents at Blagdon Retirement Village, an upmarket retirement complex near Taunton in Somerset, are mobilising to fight 12.5 per cent exit fees involving all Retirement Village sites.
Blagdon is a complex of 85 cottages, bungalows and flats “clustered around Blagdon Lodge where communal facilities can be found”.
With 20 “interest and social groups”, the Lodge is described as a “hive of activity”, although one that seems particularly active right now is an Escape Committee.
Four properties have been on the market for 18 months and prospective buyers have been deterred by the exit fees, which are, Campaign against retirement leasehold exploitation understands, the highest in in retirement leasehold.
There is no suggestion that Retirement Villages has ever hidden these fees. Its retirement complexes are clustered around nice country houses, which have communal areas and are rather like a luxurious club. The upkeep to such complexes is high.
But the 12.5 per cent exit fees mean that if you want to – or have to – sell up, the financial cost is prohibitive.
Tony Warren, an unhappy customer of many years standing, has been trying for some years to mobilise support for a number of grievances among his neighbours at Cedars Village in Hertfordshire.
But the rebellion at Blagdon Retirement Village appears to enjoy wide support.
The residents’ association committee appears to be trying to stifle the issue.
Furthermore, in (another) case of “shoot the messenger”, Campaign against retirement leasehold exploitation is blamed for damaging prospective sales.
The idea that Campaign against retirement leasehold exploitation has single-handedly halted the market in retirement leasehold (only 1,600 retirement leasehold flats were built last year, according to McCarthy and Stone), is preposterous.
In fact, the appalling greed of developers introducing sneaky revenue generating clauses in the leases (such as exit fees, which the Office of Fair Trading has stated are unfair contract terms) and predatory management companies have driven the sector into crisis.
Campaign against retirement leasehold exploitation’s advice is not to buy retirement leasehold at all, but consider renting instead.
Any Retirement Villages residents or heirs to property can contact sok@leaseholdknowledge.com. Inquiries will be dealt with in confidence.
Campaign against retirement leasehold exploitation has been given permission to publish the letter from the Blagdon Retirement Village residents, although their names have been withheld on request:
With reference to our previous mails to you regarding Blagdon Retirement Village in Taunton, Somerset (Retirement Villages Ltd.) 39 of us asked our Residents’ Association Committee to hold a secret ballot to ascertain how many residents wanted to take the subject of the assignment fee further in view of the OFT report, e.g. to contact other villages to find out their views and contact both our local MP and Sir Peter Bottomley. The committee have refused us a ballot and have been circulating information to all residents definitely siding with RV and, together with other ridiculous statements, are saying that having signed the lease we must pay the 12.5%. Unfortunately, many of the residents here, especially those living on their own, are believing everything they are told and are fearful of upsetting RV Ltd!
There are four properties on this site that have been for sale for up to 18 months and we know from the sellers that some prospective purchasers have been ‘put off’ by the high exit fee. However, the committee say, and we quote, “the existence of a substantial assignment fee may deter some purchasers but may equally attract others by ensuring that the initial payment is competitive with other similar accommodation in the area”! There is no evidence that this is true and proves that our committee have no real understanding of the situation.
They dispute the fact that retirement properties have gone down in value and in the minutes of the last committee meeting they state, and we quote: “The most significant threat to the prospect of a sale is the atmosphere of uncertainty generated by the uninformed public activities of organisations such as Campaign against retirement leasehold exploitation” !!!
We know we are fighting a losing battle here but after Parliament’s summer recess we will, as you suggest, contact our local MP and also Sir Peter Bottomley backing him in his call for an urgent All-party parliamentary group on leasehold.
Related posts:
Trapped in a Retirement Villages site: once you are in, how do you escape?
OFT does deal with Tchenguiz to cut sub-letting fees to £85 at retirement developments – but exit fees on sale still stand
OFT promises ‘substantive announcement’ on exit fees in August
Exit fees: what to do after the OFT/Tchenguiz deal
The lease is a legally enforceable contract in any UK County Court. If it says you must 12.5 % exit fee to the freeholder for any transfer of your property to another party, then you are committed to that.
If you have 39 leasehold members , you can collectively ( and supported by your local MP) apply to the OFT to get the 12.5% declared an unfair term in a contract.
If you can increase your support to 45 members ( over 50% of 85 units ) , you can ask for a secret ballot of ANY proposal. You can even replace the RA committee members. who are siding with RV . You can set up a RTM to take over administration of the service charge account .
How about everyone applying a bit of commonsense to this issue.
Retirement Villages must be well aware that their Exit Fee is extortionate and excessive.
But while it is impossible to sell these properties due to this fee then Retirement Villages are not recovering any monies.
It is up to the Residents association , the Rebels and Retirement Villages to sit down with their Solicitors and agree a more reasonable reduced Exit Fee. This will get the Market moving.
The lease is a long term rental agreement and constitutes a business asset of the company which owns the freehold property. Most leases are written on terms in favour of the Lessor and leaseholders position to negotiate for change of terms is weak. The Leasehold Laws legislated many years ago supports the landlords position and NOT the leaseholders position . There is no obligation by the freeholder to change the terms of the lease if they own the site and control the mind set of the Residents Association.
A typical property now on sale at Blagdon, the owner is asking 244K and if sold, the 12.5% exit fee may well come to 30K. That is 30K LESS than for a similar property without exit charge. The OFT have already declared that exit fee is an unfair contract term and some volunteer should persuade the OFT to bring this matter to the County Court and get it struck out of the leases.
This is the OFT website giving OFT ‘s position :
http://www.oft.gov.uk/OFTwork/consumer-enforcement/consumer-enforcement-completed/retirement-homes/#named9
This is a better link to OFT’s summary on exit fees.
http://www.oft.gov.uk/shared_oft/consumer-enforcement/retirement-homes/oft1476.pdf
If you look at the Charter Quay website , you can find much information how leaseholders to found independence from a rip-off management company . By using the LVT procedeures , they have also managed to claim back 0.5 mil pds in overpaid service charge fees.
The CQ residents have just bought the headlease for 0.9 mil pds and 223 out of 243 flats participated in collective purchase. That’s 90% support by leaseholders who decided buying the freehold was in their best long term interests.
At Blagdon RV, it makes economic sense to buy the freehold at 5.5K per unit and delete the exit fee clause which would inflict a charge of 30-40K Pds if you leave the estate.
I think the 39 members who all want to end the exit fee system could each recruit one resident to their side ( but leave those members of the RV Committee alone ) until you have ninety per cent support.
At Charter Quay , there was 90% support for buying the freehold so the same can be acheiveable at your site.
Any comments from RV Leaseholders ?