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The woman suing her solicitor over doubling ground rent bill 

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Would you pay £1m a year to live here? That’s the fate of one woman suing her solicitor over doubling ground rent bill

  • Carole Patterson’s one-bed South London flat has become her worst nightmare
  • She faces an annual ground rent bill that will eventually cost her £1m every year
  • Mother-of-two’s contract means annual ground rent will double every five years 
  • So in 50 years’ time she would have to pay £1,075,200 a year to keep the home

After years of hard work and saving, Carole Patterson was overjoyed to finally get on the property ladder a decade ago.

But the £170,000 one-bed flat in South London has become her worst nightmare as she faces an annual ground rent bill that will eventually cost her £1 million every year.

Carole, 44, is now one of a growing number of scorned buyers taking legal action against lawyers who they say failed to point out costly clauses in leasehold contracts.

Double trouble:  Carole Patterson's one-bed flat in South London has become her worst nightmare as she faces a ground rent bill that will eventually cost her £1 million every year

Double trouble:  Carole Patterson’s one-bed flat in South London has become her worst nightmare as she faces a ground rent bill that will eventually cost her £1 million every year

The mum-of-two’s contract means her annual ground rent — a charge paid to the freeholder — will double every five years. 

So while her bill is around £1,050 this year, in 50 years’ time she would have to pay £1,075,200 a year to keep the home, rising to half a billion pounds in 100 years’ time.

The Government launched an investigation into the leasehold scandal in 2017 after experts raised concerns about how developers sold residential properties with spiralling ground rents.

In January, ministers proposed new reforms to crack down on ‘unfair and abusive’ leasehold contracts.

Huge shock: Carole Patterson faces ever growing bills

Huge shock: Carole Patterson faces ever growing bills

These included allowing leaseholders to extend their lease agreements ‘at zero ground rent, for a term of 990 years’. But the plans have yet to be debated in Parliament and may not start until 2022.

Meanwhile Carole must start paying the excessive ground rent bills and there is no guarantee the reforms will help her case.

Instead, the freeholder has offered to change the terms of the lease for a one-off payment of £100,000 – a quarter of the value of the property.

Carole, an HR administrator, is hoping to cover this cost by suing her former law firm FBC Manby Bowdler for negligence after it failed to alert her to the ‘ridiculous’ clause.

She says she only became aware of it in 2018 when the freehold was bought by MEA Real Estate Ltd who told her their plan to bill her for the spiralling costs.

Three other residents live in the same building, in East Dulwich, but do not have to pay any ground rent. Carole says this is because their lawyers likely spotted the clause and had it taken out.

She now fears her home is worthless with the onerous clause attached to it.

Her case has been taken on by London firm Osbornes Law who are one of many firms advertising to help leaseholders sue their lawyers who failed to spot clauses that allow ground rents to double. 

The increasing scrutiny around these agreements has caused law firms to start encouraging leaseholders to sue solicitors who let them sign the contracts in the first place

The increasing scrutiny around these agreements has caused law firms to start encouraging leaseholders to sue solicitors who let them sign the contracts in the first place

Osbornes argues that Carole’s original law team failed to provide a ‘reasonable standard’ of service when she first bought the flat.

Carole, who now rents out the flat, says: ‘It has been a very stressful situation.

‘I first got the letter finding out about the clause when the freehold was sold on. I had no idea about it before. I was pregnant at the time and it was such a horrible position to be in.

‘I just feel so frustrated that something I worked so hard for and saved for has no value at all now. I bought this flat as an investment for my pension.

‘The ground rent on Buckingham Palace wouldn’t be as much as what I would be paying at the end of my lease.’

Last month the Competition and Markets Authority (CMA) ordered two of the nation’s biggest housebuilders — Countryside Properties and Taylor Wimpey — to remove clauses in their contracts that saw ground rent double every ten to 15 years.

The increasing scrutiny around these agreements has caused law firms to start encouraging leaseholders to sue solicitors who let them sign the contracts in the first place.

Shilpa Mathuradas, head of litigation at Osbornes Law, says: ‘Our client has been left in a horrendous position of not being able to sell her property while the ground rent doubles every five years.’

FBC Manby Bowdler says it is an independent firm of solicitors regulated by the Law Society that adheres to the Solicitors’ Professional Code of Conduct.

A spokesman says: ‘The issues which arise in this case are much broader than relating to a particular firm of solicitors and are being addressed by Parliament.’ Money Mail could not reach the freeholder MEA Real Estate Ltd for comment.

moneymail@dailymail.co.uk

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Southwold beach hut which is 10ft wide with no running water or electricity up for sale for £250,000

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A beach hut in an upmarket seaside town which is famed for its celebrity visitors has gone on the market for a record £250,000.

The price is believed to be the highest ever to be asked in the UK for a hut which people are not allowed to sleep in – and is double the cost of a three bedroom terraced house just 10 miles away.

The hut, numbered 149 and called ‘Here’s Hoping’, measures 10ft 6ins wide and is in a prime position on the promenade in the Edwardian town of Southwold, Suffolk.

The resort has always been a popular retreat for well-heeled Londoners and celebrities including Chris Evans, Michael Palin, Stephen Fry, Rowan Atkinson and Richard Curtis.

Beach huts on the south coast can be more expensive with selling prices for some in Dorset exceeding £500,000.

But the huts in Southwold, which have no electricity or running water, are subject to strict local by-laws which ban anyone from sleeping overnight.

A beach hut called 'Here's Hoping', pictured, which sits on the promenade of the upmarket seaside town Southwold in Suffolk, Doset, famed for its celebrity visitors, has gone on the market for a record £250,000

A beach hut called ‘Here’s Hoping’, pictured, which sits on the promenade of the upmarket seaside town Southwold in Suffolk, Doset, famed for its celebrity visitors, has gone on the market for a record £250,000

The price is believed to be the highest ever to be asked in the UK for a hut which people are not allowed to sleep in. The hut, called 'Here's Hoping' and numbered 149, measures 10ft 6ins wide and is in a prime position on the promenade in the Edwardian town

The price is believed to be the highest ever to be asked in the UK for a hut which people are not allowed to sleep in. The hut, called ‘Here’s Hoping’ and numbered 149, measures 10ft 6ins wide and is in a prime position on the promenade in the Edwardian town

The resort has always been a popular retreat for well-heeled Londoners and celebrities including Chris Evans, Michael Palin, Stephen Fry, Rowan Atkinson and Richard Curtis. Beach huts on the south coast can be more expensive with selling prices for some in Dorset exceeding £500,000

The resort has always been a popular retreat for well-heeled Londoners and celebrities including Chris Evans, Michael Palin, Stephen Fry, Rowan Atkinson and Richard Curtis. Beach huts on the south coast can be more expensive with selling prices for some in Dorset exceeding £500,000

The buyer will still have to pay annual ground rent of £998 and will only have 18 years left of a 30 year lease, although there will be an option to renew.

They will be able to enjoy spectacular views from a veranda overlooking the beach and the North Sea, while being just a short walk from pubs, restaurants and shops.

But just 10 miles away in Lowestoft, Suffolk, there are several homes up for sale, priced between £120,000 and £140,000.

But the huts in Southwold (pictured), which have no electricity or running water, are subject to strict local by-laws which ban anyone from sleeping overnight

But the huts in Southwold (pictured), which have no electricity or running water, are subject to strict local by-laws which ban anyone from sleeping overnight

Southwold beach (pictured) has always been a popular retreat for well-heeled Londoners and celebrities including Chris Evans, Michael Palin, Stephen Fry, Rowan Atkinson and Richard Curtis

Southwold beach (pictured) has always been a popular retreat for well-heeled Londoners and celebrities including Chris Evans, Michael Palin, Stephen Fry, Rowan Atkinson and Richard Curtis

Huts in the best locations within Southwold, which is famed for its Adnams brewery, pier and lighthouse, are rarely on the market and some have been in the same family or generations

Huts in the best locations within Southwold, which is famed for its Adnams brewery, pier and lighthouse, are rarely on the market and some have been in the same family or generations

Several semi-detached homes in the area offer three bedrooms, one bathroom and two reception rooms, and is located 0.1 miles away from Lowestoft railway station.

Another property on the market is a £90,000, three-bed semi-detached bungalow at Broadlands Park and Marina in Lowestoft which has a garden, one bathroom and one living room.

The listing for the beach hut boasts that it has ‘glazed double folding doors’ and ‘a number of storage cupboards’.

The previous highest price asked for one of Southwold’s 300 beach huts was £150,000 in September 2018.

Prices have soared since then as property prices have continued to increase and the demand for staycation breaks following the Covid epidemic has boomed.

Huts in the best locations within Southwold, which is famed for its Adnams brewery, pier and lighthouse, are rarely on the market and some have been in the same family or generations.

Several semi-detached homes in the area offer three bedrooms, one bathroom and two reception rooms, and is located 0.1 miles away from Lowestoft railway station

Several semi-detached homes in the area offer three bedrooms, one bathroom and two reception rooms, and is located 0.1 miles away from Lowestoft railway station

Many are rented out for around £600 a week to visitors who flock to the town.

The latest asking price is more than double the price of a three bedroom terrace house on the market for £110,000 around ten miles away in Lowestoft, Suffolk.

More than half the properties in Southwold are second homes and the full-time population is now below 1,000, putting extra strain on local services.

Earlier this year, councillors unveiled plans to try and stem the number of second homes in the town and make more affordable housing possible for local people.

A spokesperson for estate agent Flick & Son, which is selling the hut, said: ‘I am sure it will go very quickly.

‘There is a high demand for huts and we expect there will be a bidding war in the end.’

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EU will retaliate to any unilateral action on NI protocol, Coveney warns

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British prime minister Boris Johnson has been warned of the consequences of unilateral action on the Northern Ireland protocol, including the prospect of “retaliatory” action from Europe.

On the eve of Mr Johnson’s visit to Belfast, the Government and Sinn Féin said moves to disapply parts of the protocol risked damaging east-west relations.

Minister for Foreign Affairs Simon Coveney spoke of a “landing zone” for negotiations and indicated that the European Union was willing to make adjustments through “partnership and dialogue” due to what he said were “legitimate concerns” within unionism about the operation of the protocol.

However, he also said that if London moved unilaterally it would make matters “significantly worse” and that “then the EU will be forced to respond to that with some form of retaliatory action”.

Mr Coveney said it was not “helpful” to expand on what form that might take, but that a response “would be very negative”.

Taoiseach Micheál Martin said “there is a real and urgent obligation now” for Britain to engage with the European Commission “in a real and professional way to resolve issues that have been raised”.

Powersharing

Ahead of talks between Mr Johnson and Northern Irish political leaders aimed at restoring powersharing at Stormont, Sinn Féin’s northern leader Michelle O’Neill said unilateral action would “represent an appalling attack on the international rule of law”.

“Only through joint agreement with the EU can solutions to problems or concerns be resolved,” she said.

“I will be telling Boris Johnson that unilateral action deepens political instability and economic uncertainty and must not happen.”

Ms O’Neill is to meet Mr Martin in at Government Buildings Dublin on Monday morning ahead of her meeting with Mr Johnson.

Mr Coveney travels today to Brussels for a meeting of the EU Foreign Affairs Council and will later speak with EU negotiator Maros Sefcovic and British foreign secretary Liz Truss, who is expected to announce legislation on Tuesday that will unilaterally override central elements of the protocol.

Speaking to The Irish Times, Mr Coveney said Mr Sefcovic is open to making “significant progress” on the protocol.

“I believe there are solutions we could pursue and we can agree relatively quickly if there was an attitude to do so on both sides,” he said. “But we need a partner in London to do that, not a partner that is making threats of unilateral action.”

Envoy

The Minister also said he believes it is “likely” that US president Joe Biden will appoint an envoy to the North, saying the US administration is “extremely interested” in marking 25 years since the Belfast Agreement next year with “its institutions intact and functioning as they need to be”.

Mr Johnson is expected to affirm his commitment to the agreement and assert that he is not seeking to scrap the protocol. But Downing Street said ahead of his meetings with the North’s party leaders that he will not drop his government’s threat to unilaterally disapply parts of the protocol, which Mr Johnson agreed with the EU in 2019.

Downing Street said in a statement that Mr Johnson will tell party leaders that the door will always be open to “genuine dialogue” but that “there will be a necessity to act” and protect the Belfast Agreement if the EU does not change its position.

Writing in Monday’s Belfast Telegraph, Mr Johnson outlined that the protocol “has not been adapted to reflect the realities of the [Trade and Co-operation Agreement]”. He will signal that there is “without question a sensible landing spot in which everyone’s interests are protected”. However, he said that if the EU’s position does not change, “there will be a necessity to act”.


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CPEG acquires Geneva office property for €99m (CH)

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Propreal Capital Partners has completed the disposal of a prime office property in the heart of Geneva for €99m after successfully negotiating a new long-term lease with government-backed Geneva University Hospitals. The buyer is Caisse de Prévoyance de l’Etat de Genève (CPEG), the State of Geneva’s Pension Fund. The proceeds of the deal raise Propreal’s war chest to €300m of available capital to place in pan-European assets.

 

The 7,070m² office space was previously occupied by financial group BNP Paribas which terminated its contract prior to the lease break in November 2026. Located on Boulevard de la Tour 8, the building forms part of a larger condominium (propriété par étages, or PPE), which also includes apartments from the sixth to the ninth floors and was wholly owned by CPEG.

 

Yves de Kerdanet, Founder and CEO Propreal Capital Partners said: “Our successful restructuring of the existing lease with BNP Paribas brought a government-backed tenant on board for a 20-year term in an office market that is still feeling the after-effects of the Covid-19 pandemic. This paved the way for a deal with CPEG to acquire the property and terminate the co-ownership structure. Altogether this transaction has helped to unlock substantial investment value.”

 

The office property also comprises 252m² of storage area and 48 parking spaces. The new tenant will relocate parts of its administrative facilities to the building following refurbishment works due to be completed in the course of 2022.

 

Marcus Siggelow, Head of Asset Management at Propreal Capital Partners said: We had an opportunity to restructure the existing lease and negotiate a new government-backed lease for a 20-year term with the Geneva University Hospitals. This value-enhancing leasing agreement illustrates the quality of the location and the building and we’re now on the lookout for further opportunities to expand our portfolio across pan-European markets. The funds generated from this disposal will enable us to place more capital in other prime pan-European assets.”

 

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