|Sovereign Harbour||Estate Agents' COP||Council Tax Wrongs||E-mails||Forbes Clan|
|General John Forbes||July 4 music||SH Disability Association||SH Seniors Forum|
By Keith A. Forbes. A disabled author and journalist, he lives with his wife in the harbour and writes and webmasters this website as an activist for the elderly, disabled and vulnerable.
Estate agents selling local properties ignore Code of Practice below
It went into effect on 1 October 2015. Photographs of each of its 8 pages are shown below.
Code of Practice Page 1 of 8 showing the relevant legislation. Pages 2-8 are shown below
See Code of Practice for All Residential Estate Agents (CPRs) at https://www.tradingstandards.uk/media/documents/commercial/codes-of-practice/tpo-sales.pdf.
Shown below are photographs of its 8 pages. (In particular, re Published Material and Information about a Property, see 7i, 7j, 7k & 7l which state this emphatically). Plus, many estate agents indicate mortgages are available. The CPRs prohibit all estate agents from engaging in commercial practices that are unfair to sellers, buyers, potential sellers or potential buyers. The BPRs do likewise, While the PMA only covers estate agents, the CPRs and BPRs are wider in scope, covering letting agents and property managers. The CPRs prohibit misleading actions that could cause the average consumer to take a transactional decision he or she would not have taken otherwise. Estate agents should all now that the 2008 Regulations now offer far more protection to property buyers than was the case earlier.
The laws concerned are the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and their pages 1-8 are shown below. The government took this step to reduce duplicate legislation regulating estate agents and other businesses involved in property sales and lettings. The previous legislation, the Property Misdescriptions Act 1991 (PMA), which had made it a criminal offence for estate agents to make false or misleading statements about properties being offered for sale, was repealed on 1 October 2013.usiness Protection from Misleading Marketing Regulations 2008 (BPRs).
The Sovereign Harbour-specific extra conditions and costs shown below must be stated upfront to potential buyers, not concealed. Estate agents cannot ignore them.
Until this Act, the buyer was responsible for finding out if a property was faulty, had any flaws or annual estate Rentcharges and covenants.
If they didn’t ask, estate agents were not then then obliged to reveal the facts. But now they are, with abolition of The 1993 Property Misdescriptions Act (PMA).
Estate agents and the publishing platforms they use, such as Rightmove and Zoopla, must now comply with the much stricter measures in the Consumer Protection from Unfair Trading Regulations (CPRs).
Material information about a property must be made instantly available. Sovereign Harbour's unique-in-the-world annual estate rentcharge and covenants and obligations occur nowhere else in Eastbourne, East Sussex or anywhere else in the UK. This is a major deliberate omission if not stated by an estate agent. The non-disclosure of the flood defence scheme that extends from the 1 kilometre length of Sovereign Harbour 9 miles east to Bexhill but that only the 3,400 or so residents of Sovereign Harbour pay for, not the 17,500 or so residents of Pevensey Bay to Bexhill do not, is another actionable omission.
The law calls for open, honest, clear and timely sharing of relevant information. Estate agents must provide “accurate descriptions of properties they market. They should be accurate and realistic. There can be no withholding of salient consumer information from buyers.
When estate agents are deemed to be acting unfairly or concealing any information they are now legally obliged to give, they can be issued limitless fines and/or imprisoned for up to two years. CPRs stipulate that estate agents must be honest about their credentials.
A transactional decision is not just whether a consumer decides to purchase a property but also includes such things as to whether to view a property in the first place.
Many mortgage-granting entities, if they approve mortgages for properties affected by an annual estate rentcharge (which many may not do not for legal reasons) may or will require those granted a mortgage to take out appropriate additional indemnity insurance, because the property is subject to an annual Estate Rentcharge with the legal implications involved
If earlier sales have fallen through agents have to find out why and alert the prospective buyer. This means sellers are required to report such problems and buyers must be told by the estate agent. Local schools, night clubs or halfway houses must be mentioned, as do neighbours with ASBOs and whether there have been area burglaries. Buyers need to know if there has been a murder or suicide in the property.
The OFT warns that estate agents act for the seller, not the buyer. And recommends that homebuyers contract their own solicitor or licensed surveyor to act for them when a contract of sale has been agreed.
The OFT has issued information packs on the process for homebuyers and sellers.
The OFT says consumers should do their own research into the buying process, it is not the responsibility of solicitors not selling the property to do so, but it is that of an estate agent selling the property. Solicitors are not specifed in the legislation, estate agents are, as shown below.
Buyers should now expect estate agents to investigate potential problems they think might become an issue, even in such matters as suspicions of damp or probable leaks.
Other practices that are considered unfair include putting buyers under undue pressure to skip the survey, raise their offer or exchange contracts.
Estate agents should also offer their own complaints procedure.
The Office of Fair Trading (OFT) has published guidance for estate agents, Estate agents marketing properties need to take great care how they advertise properties for sale or lettings, and to make sure their particulars on properties are accurate.
Describing properties as ‘stunning’, ‘desirable’ or in a ‘quiet area’ now require evidence to back up such statements.
They cannot have misleading omissions and must follow the new Regulations.
Agents who want to avoid contravention of the new rules and regulations must get their vendors check and sign off on the accuracy of their particulars.
Estate agents who breach either the CPRs or BPRs risk prosecution by their local authority trading standards services responsible for enforcement. On conviction, agents can face substantial fines or in more serious cases imprisonment.
Code of Practice Page 2 of 8 showing the relevant legislation. More pages are shown below.
To comply with the 2008 CPRs and BPRS Estate Agents must state:
Sovereign Harbour has a unique triple-whammy Annual Estate Rentcharge. It is the only place in the whole of the United Kingdom with this.
Other private estates places have annual estate rentcharges or regular rentcharges. But their difference is that the general public is not allowed in without charge.
Their resident homeowners, unlike us, don't pay an Environment Agency surcharge.
Nowhere else in Eastbourne, East Sussex or rest of the UK is this Environment Agency surcharge applicable.
Prospective owner-residents must be told this in advance by estate agents. And that they have to bear a unique-in-the-UK Environment Agency (EA) sea flood defence charge while the huge majority in the very same EA sea flood area are exempted.
Nor are they told that Sovereign Harbour is the only local authority area in the UK where both Eastbourne and East Sussex councillors and former Resident Association chairs sit on the boards of directors of the private companies that levy the charge.
Eastbourne Borough Council and East Sussex County Council councillors thus have a conflict of interest.
They also fail to state on their websites that while Sovereign Harbour gets 4.8 million visitors annually from Eastbourne and beyond, they are allowed in and encouraged to visit and use all the facilities, at no cost to them at all.Not full Freehold. Instead, freehold subject to the annual estate rentcharge with other covenants.
And If in the Sovereign Harbour South water feature area is the water feature charge applicable?.
Current council tax cost.
Name of managing agent of a leasehold property and - for leasehold premises - building owner.
With current annual maintainence charges for the unit and what additional charges are likely for the next financial year.
If it also has gas, the present gas supplier.
Whether or not the property is metered for water consumption.
Restrictions in the lease, such as but not confined to the following:
If a flat, there can be no short-term renting, via any individual or agency such as Air B&B.
Or working from home.
Or having a dog or any other animal.
Or having a business registered at the flat.
Some leases stipulate these and more in the fine print.
Estate Agents can no longer use a disclaimer, must reveal all
General disclaimers telling buyers not to rely on details are no longer effective, or an excuse, in preventing offences. Yet many are still using disclaimers, in defiance of the 2009 Regulations.
Sovereign Harbour miscellany
A to E
About making an offer. It must be stated by the advertisement that the property is subject to an Annual Estate rentcharge, with the latter's components. If you later find out from a surveyor you offered too much you can cancel before you sign. Any problems with the property – from structural issues to rowdy neighbours? Why is the seller selling? Check what nearby homes have sold for. If furnished and to your liking, consider including the furniture in your offer. If more than one unit in a building is for sale, with one offering a garage or a shared one and the other does not, go for the one with a garage.
Annual maintenance charges. Especially applicable to leasehold homes and flats and particularly so in Sovereign Harbour. Apartment and flat buildings and leasehold flat owners are required in their leases to pay these charges to the development company. This company employs another company as the managing agent for that property or, when more than one, that development. The latter company organizes the necessary maintenance work each year and sends quarterly billings to all the leaseholders as a proportion of the total estimated cost for the period shown. If the annual maintenance charges are not deemed to be reasonable they can be challenged by leaseholders.
Areas. There are two main areas, Sovereign Harbour North and Sovereign Harbour South. Check them out before committing to know about the many local roundabouts, transport links, green spaces if you have children, where you will live in relation to the locales of schools. (South Harbour is best for them). The local shopping centre is as convenient to both, so are the restaurants and bars, buses and train stations in and near Eastbourne. The Harbour Medical Centre and yacht club are in North Harbour. Local medical services, buses, shops and trains are about the same distance as other Sovereign Harbour properties.
Avoid asking an estate agent to find a solicitor or conveyancer not familiar with this area. Some believe wrongly that a chancel repair liability applies. Others don't know and have no way to find out about the Annual Estate Rentcharge and its covenants including the unique-in-UK Environment Agency surcharge to Sovereign Harbour residents only, not to any other part of Eastbourne or East Sussex or any other part of the UK. It may also result in a slower completed sale or a more expensive one.
Balconies. Many flats have them, some next to each other, which can be a problem.
Broadband and WIFI availability. Medium speed broadband/WIFI is readily available from many suppliers but highest-speed cable from Virgin Media is still is not in 2020, despite that company being asked for it in 2016.
Car parking. In apartment buildings occupied by leaseholders are usually outdoors and invariably assigned, with garages usually shared only by higher-floor leaseholders. Others have outdoor assigned spaces. Will the space be big enough for your vehicle? Is there also a space to store a cycle, mobility scooter and wheelchair? Car parking is not for more-than-one-car households, however a limited number of guest parking spaces may be available. Certain types of vehicles such as vans or trucks not be permitted to park on the property. Note carefully that residents and their visitors who park in spaces not their own but legally assigned to others may find that irate residents entitled to those places may decide park in front or behind them to prevent the intruders from getting out.
Centrally heated? Many flats are not. They are instead electric-only individually room-heated by radiators. when they have both gas and electricity this should be stated. If newcomers want the latter they should make a point of avoiding premises that have electricity only - by far and away the single most expensive form of heating. Note that the government wants and intends to phase out all gas central heating in residential households in the foreseeable future, in accordance with the government's climate-change targets.
Chartered surveyor services. Get a written report on the condition with a present valuation of the property; an indication of any planning that might be prejudicial. It will cost you £450 or more. If it includes full details of the annual estate rentcharge it will be money well spent. If it does not, challenge it and register a formal complaint..
Cladding. New regulations banning the use of combustible materials in cladding were introduced in the wake of the Grenfell Tower fife in 2017. They affect a number of Sovereign Harbour residents. The cladding crisis has clogged up the property market for properties involved and thousands of leaseholders have been unable to legally sell their flats because the changes have meant they cannot acquire or have had major delays in acquiring, the paperwork needed to have a sale approved or for lenders to provide mortgages on the properties. Combustible cladding, insulation and balcony decking have now been outlawed. Those who buy a local flat with cladding should ensure they do not to get lumbered with any expensive present or contingent liability. Estate agents must divulge - but are not - when a property has cladding and if special factors apply, such as height of the building concerned and whether or not the property owners are liable for cladding replacement or repairs. One estate agent was fined heavily for not releasing this information upfront when required. Owners of cladded properties are also obliged by law since 2009 to state this. Mortgage companies may refuse to grant mortgages for properties with cladding without an applicable External Wall Fire Review (EWSI) certificate and they may be deemed worthless until they are certified appropriately. New leasehold buyers of flats with cladding need to know that owners of the buildings likely have the right to ask their leaseholders to foot their portion of the cladding bill re-installment as one of the conditions of sale.
Cupboards, closet or other storage spaces in flats. Many have two bedrooms but few have adequate cupboard or wardrobe space for two people. Some have no built-in cupboard spaces. Flats here were constructed for part-time, not full-time year-round, use.
Commonhold. A recent (2002) type of holding for residential units - does not presently apply to any property subject to an annual estate rentcharge like Sovereign Harbour, but should. It is a fairly new system of property ownership in England and Wales. It involves the indefinite freehold tenure of part of a multiple-occupancy building, typically a flat, with shared ownership and responsibility for common areas and services. It is similar to the condominium systems used in Australia, Canada and USA. It was introduced to the UK via the Commonhold and Leasehold Reform Act of 2002 as an alternative to leasehold as the first new type of legal estate to be introduced in English law since 1925. In the years since the 2002 Act became law, only a handful of commonholds have been registered, whilst hundreds of thousands of long leases have been granted during the same period. As of 3 June 2009, there were 12 commonhold residential developments comprising 97 units (homes) in England and one commonhold residential development comprising 30 units (homes) in Wales. Photo left shows Sovereign Harbour's six and higher-storey properties with cladding located on The Boardwalk.
Conveyancing Fees. They involve considerable additional expenses here for both buyers and setters because of the legal delays implications involved in the Annual Estate Rentcharge. Sovereign Harbour owners, subsidiary, managing agents and the landlord owners levy a separate fee, not only for a revised property registration with the Land Valuation Office but also for their staff operational expenses in getting the property re-registered. Of all the many harbours owned by The Wellcome Trust's Premier Marinas, only this one has this unique extra cost. This considerable extra expense is not the only problem. Another is that this cumbersome process of ending the re-conveyancing process can easily end up taking months, not weeks.
Council Taxes & local authorities. Eastbourne Borough Council and East Sussex County Council. they both charge council taxes. East Sussex CC is one of the top three most expensive places in the entire UK for council taxes. All Sovereign Harbour council taxes are appreciably higher than those in other parts of Eastbourne of similar or higher market value. Some flats in the Eastbourne area in buildings with garages or a shared one, therefore with more space, but their owners pay the the same council taxes, not more, than flats without garages even when residents of the latter have paid a higher price for their flat than those with garages.
Council Tax 1- band disability reduction. Can apply if this is your only home, a member of your household is severely disabled and there is there a separate bedroom and second bathroom available and accessible by wheelchair.
Council Tax living alone. 25% deduction on successful application.
Disadvantages of buying property in Sovereign Harbour. There are lots of other south, south west and south east communities with equally lovely harbour views and beaches, nice communities and nearby shops - and all, with the sole exception of Sovereign Harbour - without the hated annual estate rentcharge or similar rentcharge that applies to both current and future purchasers of any Sovereign Harbour property. Unlike in Sovereign Harbour, their local authorities have trees planted, clean their beaches and do not serve both as on the one hand as councillors and on the other hand as directors of private trusts that collect the annual estate rentcharge, in a gross conflict of interest. Other councils don't have some constituents having to pay an Environment Agency flood defence cost while others do not. And without an annual estate rentcharge it will be easier, quicker and cheaper to buy and if you wish later sell, and for you and any other future purchaser to get a regular mortgage or Equity Release on that property. Also, elsewhere, newcomers avoid having to pay extra management company and/or developers service charges.
Electric car charging in Sovereign Harbour.. Presently, no properties in Sovereign Harbour offer their own electric car charging facilities. Yet the government has mandated that petrol-driven cars will no longer be sold after a few years from now. The only two locally convenient charging places at this time are at ASDA in Sovereign Harbour Village. Will it be possible for local petrol stations to introduce or increase such facilities? It is unrealistic at this time, especially when management service charges for leasehold apartments are already so high and are forecast to grow by at least 5% per year for the next 30 years because of the yearly-increasing cost of living, for those holding leases to expect electric car-charging to become available in or at the buildings where they live. However, for a lucky relatively few leaseholders who live in the third or fourth or higher floors of apartment buildings and because of this have the use of full or shared garages there is a way out. It is to charge their cars in the garages. There should be more than adequate room to do so, as the garages, for fire prevention and other relevant reasons should not be used to store furniture or for any other storage reasons. There may also be an additional advantage for these lucky people. It may well be that because garages are not private but part of the building's community-maintenance area for painting and renovation purposes they have garage electricity outlets that are not charged to individual tenants by their energy companies - as all tenants usually are - but are instead considered part of the building expenses paid by all who live in the building, namely the first and second-floor people as well who do not qualify for use of the garage for their cars (or anything else). If the garages concerned are to continue being used as community property paid by all in that building then a case can and should be made for electric car-charging to be made available for all residents in that building with electric car-charging needs. In the meantime, just as petrol and diesel car drivers don't have the benefit of at-home fill-ups but have to go to a petrol forecourt away from home, electric car drivers should be expected to similarly go out to get their vehicles charged. Presently, all those on the lower floors of the building who do not have the use of garages and any others who not not yet have electric cars (likely the majority of residents of that building) should object strongly to the wishes of the minority of electric car users to have very expensive electric car-charging facilities installed unless they alone are asked to pay for it and/or it is required by law. It will likely be a significant expense that will add appreciably to service charges - already climbing steadily - for the building.
Electricity meters & suppliers. All homes have meters. Currently, they are controlled by a radio signal but this will be ending soon. Some Sovereign Harbour properties have both electricity and gas, others have electricity only. Be aware electricity is the most expensive form of home eating. Some homes without gas do not have electrical central heating, instead per-radiator heating which can hugely increase the electricity cost. Homeowners can select which electricity and/or gas company they prefer and can pay monthly by direct debit or in another mutually agreeable way.
Energy coding to H
Energy coding for the property. Normally done when a property is bought or sold.
Estate Rentcharges. Hugely more concerning to potential buyers than non-estate rentcharges. Applicable on some private estates where estate rentcharges, not rentcharges, apply . .Usually, when private developers build homes on land they buy, the local council - in the case of Sovereign Harbour where there are now over 4,300 such estate-rentcharge homes - the Eastbourne Borough Council - will "adopt" the estate, meaning it will be responsible for the upkeep of public spaces, maintaining roads, paths and pathways and paying for other costs, in return for the council taxes they will charge their constituents. But local councils are not presently required to do this. With their budgets often under some pressure, some local authorities have not "adopted" many new developments. Instead, they have managed to evade laws or regulations or similar that now require them to tell builders not only how many properties they can build but also how many must be affordable or low-cost, and in effect a mix of what kind of people can live there, by imposing premium licencing prices on the developers of the land concerned, thereby ensuring for the builders occupancy of the homes they build by those who can afford it by way of savings or earnings or mortgages or employable prospects. Developers in turn cover this in two ways, by increasing the cost of the house to partly recoup the extra cost levied by the council, and by applying a (often hidden by actual name) annual estate rentcharge. All Sovereign Harbour pay them. No other harbour or marina in the entire UK charges them. An annual estate rentcharge is a legal device in existence since the 1290 Statute of Quia Emptores and was orignally paid to the lord of the manor in perpetuity. Once applicable, a rentcharge/annual estate rentcharge binds both the present and future owner of the freehold or leasehold Sovereign Harbour property. In 1977 an Act dissolved the application of all fresh rentcharges but excluded - because of pressure from landlords particularly including those with Sovereign Harbour properties - any similar beneficial provision for annual estate rentcharges. Under that legislation all rentcharges other than estate rentcharges will be extinguished on or by 22 August 2037. Unfortunately, freeholders concerned have little or no say in either in the process of buying or the charges. Estate agents, despite being required to do so by The Property Ombudsman, other similar regulatory agencies, fail to state in their advertising of particular homes, whether an annual estate rentcharge applies, what it also entail and its covenants. Thus the 4,300 or so consumer property buyers in Sovereign Harbour, where there are number of individual developments both new and well-established, are not told that a unique Environment Agency flood defence charge is payable by them as part of the annual estate rentcharge - but not by the 17,500 or so other homeowners in the same flood zone that extends 8 miles east to Bexhill on Sea. Freeholders have typically little say in the process and the charges. Often, what they are paying for and whether the decisions made offer good value for money are not transparent. Legally, developers or management companies can take possession of a property if homeowners fall just 40 days behind on their payments. Whilst used rarely, it could mean homeowners effectively lose thousands of pounds due to forgetting to pay a relatively small bill. For legal reasons, because of the annual estate rentcharge, regular mortgages for buyers may not be available and those who need to get a lifetime mortgage or Equity Release may also not be able to do so. Some property owners may not mind paying an estate rentcharge but should be warned that the rentcharge obligation continues with subsequent purchasers of the same property and they might well mind. Also, under present regulations sellers must disclose it, cannot pretend to prospective purchasers that it is a mere "harbour charge."
Flood Zones for the property concerned, for contents insurance purposes. North Harbour is in Flood Zone 3, South Harbour is in Flood Zone 2. Note that while all other areas of the UK do not pay for Environment Agency flood protection, Sovereign Harbour owner--residents are the glaring exception with part of their annual estate rentcharge payment going to the Environment Agency in a way that no one else in the UK has to pay. On 19th November 2019 the government announced some compensation for homeowners hit by floods - see https://www.gov.uk/government/news/government-announces-grants-to-help-protect-properties-from-flooding - but the 3,400 or so Sovereign Harbour residents may be excluded while residents in the same flood zone extending from Sovereign Harbour in the west to Bexhill-on-Sea 9 miles to the east will be included.
Flooring. Some flats have wood or composite, others have concrete. Those with wooden floors mean that neighbours below can expect more noise.
Freehold. The UK Government's Land Registry states that all land in England and Wales, technically belongs to the Crown. What “land owners” actually own is a right to use and occupy their land, called an “estate in land”. These estates were granted by the Crown centuries ago to noblemen, who in turn granted estates out of their land to farmers and such. Prior to 1925 and the introduction of the Law of Property Act 1925, which is the basis of modern land law, there were many different types of estate but the Law of Property Act reduced these to two: Freehold and Leasehold. Freehold (or to give it its full name, “fee simple absolute in possession”), is in practical terms absolute ownership. The owner of the freehold estate has a perpetual right to use and occupy the property to the exclusion of all others (except anyone with a legal right over the property such as a right of way) and is free to sell, mortgage, lease, gift or bequeath the land as he wishes. Although technically the land still belongs to the Crown, as long as there is someone to inherit the right will continue for eternity so that the Crown has no real influence.
Freehold in fee simple absolute. Unfortunately, the latter does not apply to the vast majority of Sovereign Harbour properties because they too are presently required, despite being advertised as freehold, to pay the annual estate rentcharge. Note that 99% of the relatively few "freehold)" Sovereign Harbour are not freehold in fee simple. Instead, they have to pay the annual estate rentcharge. Freehold with fee simple is the highest form of freehold, meaning no Estate Rent Charge, no leasehold fees, no management fees. Only a tiny minority, perhaps 6 homes out of the 3400 or thereabouts Sovereign Harbour residences are in this category. Freehold in fee simple means the homeowner or joint home owners as the case may be have clear and absolute ownership of a real property, or his/her/their own piece of real estate. Owners have the ability to use it as they see fit providing their usage meets local zoning and relevant other laws and/or regulations in real estate such as police power, eminent domain, escheat and pay relevant council or property taxes. Police power is government's right to enforce regulations for land development in the interests of public safety. Eminent domain is the government's right to convert public property if deemed necessary, with appropriate notice and with appropriate compensation. Escheat is the government's ability to seize land for cause. Upon purchase of a property, the buyer owns both the house and land on which it sits with no time limit on ownership, unlike in the case of leaseholders who own flats or apartments only, not the building or land, for a fixed period of time. Usually, this means there are no management charges. But for some freeholders, for example those purchasing a Sovereign Harbour supposedly freehold house, annual estate rentcharges apply.
Garages. Some flats in buildings have either full or shared garages. Owners in the same building pay the the same council taxes, not more, as flats without garages .All owner- residents of one building pay the same council taxes If more than one unit in a building is for sale, with one offering a garage or a shared one and the other does not, go for the one with a garage.
Gas-only boilers. For Sovereign Harbour properties with both gas and electricity, gas-only boilers, those that run exclusively on natural gas, found in many homes face being banned after 2026. It is part of the UK's push to hit climate goals. The government hopes to ensure that only new boilers will be allowed, that will run on hydrogen instead. Tests are ongoing to see if hydrogen can be used safely and effectively in all UK homes, instead of natural gas. Gas-only boilers are expected to be banned by 2025. From August 2021 gas has risen astronomically in price, not just in UK but throughout Europe.
Gifted Deposits. A common feature in buying a home. The term used when money is given to a homebuyer to help buy a property. Given on the understanding that there is no legal requirement for the money to be repaid. The person gifting the money has no rights or legal interest in the property being purchased. Parents often provide their children with gifted deposits to help them get on the property ladder. Other relatives may not be similarly eligible. Gifted deposits are required to be declared by the buyers to the relevant mortgage company and conveyancing solicitor and a Gifted Deposit letter will need to be signed. There can be Inheritance Tax implications.
Ground rent. A similar concept to a Rentcharge but applicable only to leasehold not freehold properties. Payable by all Sovereign Harbour leaseholders in addition to the annual estate rentcharge, at an average annual rate of £140 per residential unit per year for properties built 10 years or less earlier. Ground rent on properties more than 10 years old may be charged significantly more. In some cases ground rents double every 10 years. This increase is often built into contacts, meaning that some people can struggle to sell their homes and find themselves trapped.
Hanging out laundry to dry outside. Not allowed by most leases. It might be justified in part where some properties are deemed exclusive and private and members of the public are not allowed to pass by. But they cannot be justified in properties where, such as in Sovereign Harbour, walkways and paths are not exclusive because they allow any and all members of the public who are not Sovereign Harbour residents to cycle or stroll or walk by and on the beachside, bring their dogs. If they are allowed and dogs can leave their messes for hours or days without being picked up by owners then surely Sovereign Harbour freeholders and leaseholders should not be prevented from hanging out their laundry to dry for just a few hours. Not allowed by most leases. It might be justified in part where some properties are deemed exclusive and private and members of the public are not allowed to pass by. But they cannot be justified in properties where, such as in Sovereign Harbour, walkways and paths are not exclusive because they allow any and all members of the public who are not Sovereign Harbour residents to cycle or stroll or walk by and on the beachside, bring their dogs. If they are allowed and dogs can leave their messes for hours or days without being picked up by owners then surely Sovereign Harbour freeholders and leaseholders should not be prevented from hanging out their laundry to dry for just a few hours.
Hot water boilers. In their own best interests, newcomers purchasing or leasing Sovereign Harbour homes need to get sellers to give them dates or years of purchase, or better yet, the paperwork from when bought, of hot water boilers. Why? Because they need to be serviced yearly and buyers need to know when the next service is due. If this information is not given there is a grave risk of a boiler flooding by day or night, ruining floors and carpets and possibly also affecting neighbors. Flooding has occured frequently in apartments of certain buildings.
Code of Practice Page 3 of 8 showing the relevant legislation. More pages are shown below
H to Leasehold reforms
Kitchens and washer-dryer equipment. Many kitchens in Sovereign Harbour flats are smaller than in a house, which means their appliances are also smaller. Persons used to doing a large load of laundry and using a separate dryer will be dismayed by the small size and capacity of many combined washing machines and dryers. Most flats were kitchen-designed to be used for holidays, not year-round residence. Most refrigerators are also smaller and a number are under-the-counter accessible as separate small refrigerator and freezer units, instead of larger combined stand-alone units. Newcomers purchasing property should ask sellers about the age of their stoves, refrigerators, washing machines and microwaves. Many newcomers have had to replace those either more than 10 years old dating back to when the apartments or homes were first built, or that are operating inefficiently. These are expenses that need to be budgeted for.
Leases and leasehold. Sovereign Harbour leases usually have specific conditions and exclusions in addition to those below. For example, they demand acceptance of the Annual Estate Rentcharge and all its covenants; may stipulate for private residential use only by the leaseholder concerned and forbid commercial use of or registration as an office; may not allow pets of any kind; forbid use of the flat for rental purposes except on a long-term basis of six months or more; will not allow washing to be hung from balconies, etc. Almost all ‘owned’ flats in England and Wales are in fact leasehold, as are many houses. As a long leaseholder you buy the exclusive right to live in your property for a fixed number of years (“the Term”). This time limit on ownership of the apartment or flat only, not any other part of the building or property on which it sits, is a key factor to consider. The ownership of the structure and common parts of a building containing flats are usually retained by the landlord. The responsibility for maintenance of the structure, the upkeep of common parts, placing of the building's insurance and provision of services usually rests with the landlord (who may or may not be the freeholder). A lease is a legal term used in property law to describe a particular type of property contract. In many respects a lease is similar to any other type of contract: it is a private contract between you and your landlord and sets out the rights and duties of both parties. Your lease will allow you to occupy the property for a fixed number of years: typically for 99 or 125 years when first granted. The length of the lease reduces over time from the date when it was originally granted. The outstanding term will depend on what was left when you took over the lease. The lease will also expire automatically at the end of the term, although many - but not all - long leaseholders have a statutory right to stay on as renting tenants at the end of the lease, buy the freehold or extend their lease.
Leasehold Association applicable to you. If you will be a long-leaseholder there is likely a particular association for that building or that owner's group of buildings. All leaseholders of a particular building should become members, usually for a small annual cost. Why? Members provide a common defence against matters such possible attempts by managing agents or building owners to raise fees for new maintenance or related works. When a leasehold association has 60 percent or more of its occupants as members in good standing it has a legal right to challenge arbitrary decisions. If that 60/% is not realized because not enough occupants are current members, managing agents and/or the building's owners (who usually appoint the managing agents) are legally entitled to proceed without such blockage or interference. Only when a leasehold association reaches 60% of its leasehold-holding owner-occupants does it have the power to demand a change of managing agents. This has happened especially when either management charges and additional maintenance expenses have been deemed excessive - unrealistically high by the majority of members of the leaseholders association, or when the managing agents and/or owners of buildings have been continuously uncommunicative, or both. The third is the managing agent of that building.
Leasehold homes (including houses) beware. A BBC report of September 2018 noted that about half the people who bought a leasehold house in the past decade - including in Sovereign Harbour - had no idea what they were getting into, according to a new study. Homebuyers faced high fees and charges, with many feeling they were mis-sold. The research follows controversy which led the government to crackdown on "unjustified" leasehold houses. The National Association of Estate Agents warned: "Most buyers have no idea about the trappings of a leasehold contract until it's too late." The new property trap has affected thousands. Leasehold house owners are often charged expensive ground rent as well as fees if they want to make changes to their homes. The report found that leaseholders paid an average of £277 per year in ground rent when they moved in, and are currently paying £319, with most having been in their properties for three or four years. It also said that freeholders typically charged home owners £1,422 to install double glazing, £887 to change the kitchen units, and £689 to replace the flooring. Some faced bills of £527 for changing their blinds and £411 for installing a new front door. As a result 94% of house buyers regretted buying a leasehold while 62% felt they were mis-sold, according to the study. Unsellable houses have resulted. A leasehold house can also be difficult to sell. A third of those currently trying to move said they were struggling to attract a buyer because they do not own the freehold. Meanwhile a quarter said house-hunters who were interested were put off when they found out it was a leasehold home. House builders started offering more and more new leasehold houses because it offered them an extra income stream either through ground rent or from selling on the leases to investment companies. Many of the leases included onerous rising ground rents that have now been outlawed. Last year, Taylor Wimpey, one of the UK's biggest house builders, was forced to set aside £130 million to compensate home buyers because of the scandal. Last December, a government crackdown put a stop to the sale of new leasehold houses in England, And in June, the Secretary of State for Housing, James Brokenshire, announced that housing developers would no longer be able to use any new government funding schemes for unjustified new leasehold houses. Mr Hayward called on the government to ensure that leasehold homeowners were treated transparently and fairly in the future. He said: "Almost all of the homeowners we surveyed say they wouldn't advise their friends or family to buy a leasehold home, which is a damning indictment on the industry. It's time we listened to this and sought a robust solution for all those affected, unable to sell their homes, and serving a leasehold life sentence." He reckons buyers of new-build homes should have access to an ombudsman scheme and that freeholders of leasehold properties should be required to sign up to a redress scheme. A Ministry of Housing, Communities and Local Government spokesman said it was "unacceptable for home buyers to be exploited through unfair and abusive practices within the leasehold system". "This is why we have already announced measures that include a ban on leaseholds for almost all new-build houses and restricting ground rents to a peppercorn." He said the government was also working with the Law Commission to support existing leaseholders to make buying a freehold or extending a lease "faster, fairer and cheaper". A spokesman for the Home Builders Federation said: "The vast majority of new-build houses are sold on a freehold basis, but it can be necessary on occasion to sell new houses with leases. As such, leasehold is a well-established and secure tenure with which to own a home. In all transactions, builders strive to provide prospective purchasers, their solicitors and their mortgage lenders with all relevant information. Purchasers are always advised to engage their own legal advice during the purchase of a home."
Code of Practice Page 4 of 8 showing the relevant legislation. More pages are shown below.
Leasehold Reforms legislation planned, but unlikely to apply to Sovereign Harbour. See https://www.naea.co.uk/news/january-2021/leasehold-reform-to-save-households-up-to-tens-of-thousands-of-pounds.aspx. Great news for some but unlikely in Sovereign Harbour. Why? Because of the annual estate rentcharge liability to harbour residents, unlike residents in other places that have rent charges but not annual estate rentcharges or management fees that include annual estate rentcharges.
Lift in property? Essential in the selected property for disabled or elderly and vulnerable residents who cannot climb or descend staircases. This should be a requirement, especially because most properties do not have facilities to take care of the vulnerable in the event of a fire or other emergency.
Managing Agents. They are appointed by owners/developers to collect annual or semi-annual demands for management fees payable by leaseholders and to maintain all lifts and common external areas of the building including the exteriors of garages and parking spaces. But they do not get involved in non-common areas. Leaseholders should also know that if their buildings have lifts installed their management fees will be higher than buildings without lifts, but leaseholders without their own garages will pay the same management fee, not less, than leaseholders with garages, even when those without garages have paid more for their properties than those with garages. Some managing agents are much more responsive than others in answering questions or handling complaints. The fourth is the owner of that building. When occupiers seek, on an individual (non-common) basis, information about their flat, or make any complaint, or have or create any damage or make any structural internal changes to their flats, such as creating or changing rooms or walls or partitions or bathrooms or showers they should probably copy managing agents into their messages but should make sure their submissions are addressed to the owners of the buildings concerned. There have been quite a few changes in managing agents over the years. One example of note is how Ross & Co. replaced Fell Reynolds in managing the various buildings in Sovereign Harbour North's Chatsworth Strand development opposite Sovereign Harbour North's beach area.
Mobile telephone usability. Some Sovereign Harbour homes and flats have poor signal strength. Avoid cheap deals with certain not well-known suppliers and instead stick with BT or Sky or EE or PlusNet or similar. Some newcomers in certain buildings have found that their mobile phone usage is unreliable and that they have to go outside to get a reasonable signal.
Page 5 of 8 showing the relevant legislation. More pages are shown below
Mortgage applications for Sovereign Harbour properties. Prospective buyers should be aware that mortgage applicants will be required to disclose to mortgage entities that an Annual Estate Rentcharge is applicable throughout Sovereign Harbour. Estate agents fail to disclose this, instead refer to it as merely a harbour charge. Be warned that many reputable mortgage companies, for sound legal reasons, may consider the Annual Estate Rentcharge as toxic and either decline to arrange a mortgage or require specific additional indemnity at a cost. Another problem, partly due to the 2020 pandemic claiming more casualties than ever in 2021, is the grim and worsening economic outlook which has tightened the mortgage market further for many potential buyers. Some can no longer get a mortgage if on furlough. In some cases banks have withdrawn mortgage offers in principle when buyers' jobs have been affected by lockdown restrictions. A third factor is the problem with cladding when applicable and the requirement for external wall safety forms. The Daily Telegraph newspaper reported in January 2021 that as many as 4.6 million homeowners (including some in Sovereign Harbour) have found their properties are unmortgageable according to reliable industry analysts.
Porches or balconies adjacent to those other flats. Some buildings with flats have these. This means less privacy and more noise when both flats have people on their porches or balconies at the same time. And in the summer, when you need more air but stay inside, you will want your windows or doors open. But if people on the adjacent balcony or porch in the neighbor's flat are making a noise, you may have to close your window or door.
Rentcharge. A type of legal interest in a house, land, apartment or flat. The owner of a rentcharge is entitled to collect a rent from the owner or leasehold owner affected by it and will have a "right of re-entry" if the rentcharge is not paid. In addition to the obligation to pay the latter there are often other covenants which, if breached, give the rentcharge owner right of re-entry. Rentcharges, like mortgages, can be bought or sold. The Rentcharges Act 1977 banned the creation of new non-estate rentcharges but did not affect existing ones.
Renters. They will be required to pay, in addition to their monthly rent, an upfront deposit amounting to up to two months rent, get estate-agency approved contents insurance and more. If from abroad, or with insufficient monthly income for a monthly rent but with provable sufficient savings, there is a way out. Renters can elect to pay in advance for the first six months of their rental tenancy. Most rental agreements appear to be for an initial six month period.
Page 6 of 8 showing the relevant legislation. Pages 7-8 are shown below.
Residents Associations. Here in Sovereign Harbour a residents association is an informal representative body of freeholders - but not in fee simple, all subject to the annual estate rentcharge that affects flat owners and tenants. It holds no statutory powers and is quite different to a registered legal entity even though the body of membership may be similar or identical. There are several, for example, the Sovereign Harbour Residents Association that not only states it represents residents but developers/owners too, but no longer seems to want to involve itself in serious local issues on behalf of residents, and Chatsworth Strand Leaseholders Association that actively represents the many leaseholders in the multi-building Chatsworth Strand development opposite the North Harbour beachfront.
Restrictions in leasing or subleasing or letting or short-term renting Owners of leases in some buildings clearly stipulate that sub-letting or holiday renting is not allowed for short periods such as weekly holiday lets, while others in the same building do not any such restrictions. Read leases carefully and agree or object and look elsewhere.
Right of Entry into Possession By freeholders. Whose leaseholders fail to pay the Annual Estate Rentcharge when due. One of the severe disadvantages of an annual Estate Rentcharge.
Page 7 of 8 showing the relevant legislation. Final page is shown below.
Sea views or countryside views. May be important to you. If so, don't go for a property without one or the other.
Second Home Owners. Many Sovereign Harbour properties are second homes, including flats/apartments. From April 2020 the government tightened a loophole that allowed their owners to benefit from cheaper business rates. Their tax bills may rocket. In England, second home owners can pay business rates instead of council tax on their properties if they declare they intend to make their properties available to let for at least 140 days in the coming year. Until 2021 was no mechanism to verify this. Now there is. It will need be properly verified by the second home owner to claim the cheaper business rate instead of council tax.
Smart meters. Available now for some but not for all. Smart meters are controlled by a radio, not a WIFI, signal, to display and transfer readings. Smart meters in apartment buildings will save the owner of the unit from having to physically go down to where electricity meters are, to take a reading. Smart meters send information directly to the electric company supplier. Newcomers should request one if available. There are two types, known as SMETS 1 and SMETS 2, representing the first and second generations of the technology. SMETS stands for Smart Metering Technical Qualifications. SMETS 2 is much more reliable and stable and the only one of the the two versions that will accept it when the customer concerned switches the supplier of electricity for any reason - such as if one supplier goes out of business in 2021 or beyond and is replaced with another - albeit likely more costly supplier of gas or electricity or both. For this reason, any Sovereign Harbour owner-resident who has not already begun to use a smart meter, only a SMETS 2 (or later) version should be considered.
Stamp Duty. In 2020 there was a temporary stamp duty exemption on certain sole homes (but not holiday or second homes) being bought but it stops on June 30, 2021 . In July 2020 the nil-rate stamp duty band in England and Northern Ireland on sole homes was raised from £125,000 to £500,000. It then meant that 90% of all new Sovereign Harbour property owners could avoid payment of stamp duty that a similar percentage of earlier local property owners had to pay. But the change has yielded a net loss, not gain, to the Treasury and has to be discontinued.
Code of Practice. Page 8 of 8
Water and waste water supplier. Southern Water. All Sovereign Harbour properties are metered. Southern Water has a Priority Services register for those qualified. Average monthly water bills are £38-48.
Water feature charge. Applies to about 309 properties within the precinct of the water feature in Sovereign Harbour South. Owners have to agree by covenant to pay this. It amounts to over £260 per qualifying residential unit per year in 2020-2021. This is in addition to normal water costs. No other water feature anywhere else in the world has this surcharge, especially for water that cannot be used for swimming or paddling and is full of chemicals.
Working from home. Sovereign Harbour residents who are leaseholders should know that the leases in many Sovereign Harbour apartment buildings state that they do not allow professionals to work from home. Yet most Sovereign Harbour leaseholders associations in developer-owned buildings and the Sovereign Harbour Residents Association have not publicly challenged this, even in 2020-2021 Covid 19 pandemic days when the national government and local councils required many employees to work from home. In the summer of 2021, no matter what freeholders state in their leases to tenants, a default right to work from home if individuals wish is to be enshrined into law.
By this same author
researched, website-designed, administered and web-mastered by Keith A. Forbes.
Email firstname.lastname@example.org. Multi-national © 2021. All Rights Reserved. Last updated: 11 October 2021