(Alliance News) - Countryside Properties PLC on Wednesday said it agreed to remove doubling ground rent clauses from its contracts after an investigation by the UK Competition & Markets Authority.
The Brentwood, Essex-based housebuilder will remove all contract terms that allow ground rents to double in price every 10 or 15 years, but added it has not sold properties with doubling rent clauses since 2017.
The CMA launched enforcement action against Countryside last September for using "possibly unfair" contract terms. The watchdog warned that writing ground rent increases into contracts might break consumer protection law.
The CMA said on Wednesday, now that it has secured commitments from Countryside, leaseholders can "breathe a sigh of relief".
"No one should feel like a prisoner in their home, trapped by terms that mean they can struggle to sell or mortgage their property," said CMA Chief Executive Andrea Coscelli.
"We will continue to robustly tackle developers and investors - as we have done over the past 2 years - to make sure that people aren't taken advantage of."
As part of its review, the CMA also investigated Buckinghamshire-based Taylor Wimpey PLC for unfair contract terms, Leicestershire-based Barratt Developments PLC and Persimmon Homes, which is part of York-based Persimmon PLC, over the "possible mis-selling" of leasehold homes.
It has so far secured commitments from Persimmon, but urged Taylor Wimpey and other developers "to do the right thing by their leaseholders and remove these problematic clauses from their contracts". The watchdog warned it was ready to take action through the courts if necessary.
Countryside said it expects to pay a further GBP5 million into its Ground Rent Assistance Scheme, set up in 2020, which seeks to help leaseholders whose ground rents doubled more frequently than every 20 years. It previously made a GBP10 million provision to repay affected customers, the company added, but did not state when this was. â€‹
Shares in Countryside were down 1.5% at 511.29 pence in London on Wednesday morning.
By Josie O'Brien; firstname.lastname@example.org
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