Although Linden Wates remains liable at law to remedy genuine defects in workmanship, leaseholders at Linden’s development in Chichester have been advised by their solicitor that it would be pointless for them to sue in order to compel the company to decently shoulder its responsibility to build homes fit for people to live in, because after having paid lavish dividends to the shareholders, precious little money is left in the firm’s accounts. Perhaps exemplifying the late Sir Edward Heath’s “Unacceptable face of capitalism”, documents filed at Companies House record that the limited liability entity especially created by Linden Limited and Wates Developments Limited to build at Linden Chichester, paid the two company shareholders a dividend of £1,000,000 in 2012. The latest accounts filed for 2016 show a net worth of only £164K, which amount may be enough to pay the costs of proceedings to liquidate the company, but insufficient to clear up the shambles Linden Wates created. For technical and small print reasons, the backup insurance policy, provided by Premier Guarantee, turned out to be effectively worthless and the Leaseholders are being left to pick up the pieces, estimated at £2½ million.
More Dirty Tricks
The JCT form of contract, which is the most common form in the construction industry, provides that the developer bears a contractual ‘Right to Return’ to the site to remedy any defects until ‘Practical Completion’, at which point the building is accepted as being complete and free from patent defects. On multiple occupancy sites, handover on completion is usually arranged between the building developer and the Managing Agent who should represent the interests of the buyers or leaseholders. They normally inspect the building and agree that the common parts, roofs, stairways, roads, etc. are effectively complete and free of defects.
In the case of Chichester, Linden Wates strapped buyers into their own Estate Management Company with nifty lease terms, putting themselves in position to control management of the Chichester estate on behalf of the leaseholders who were thereby disenfranchised. This little trick allowed Linden to effectively hand the buildings over to themselves. Not only were both companies owned by parent Galliford Try Plc, but to cement executive control the same director, Tom Marshall Nicholson, served on the boards of both companies.
Having previously Self-Certified their own work, Linden Wates then got it inspected and signed off by their own ‘at-arms-length’ selves, with no questions asked and no independent building control checks. The leaseholders allege that practical completion was claimed prematurely and independent professional surveyors have exposed multiple Patent Defects that Linden’s ‘sister’ management company let remain unresolved.
Linden Homes money grubbing conduct in Chichester:
- Linden created a separate Limited Liability company at arm’s length to develop the site in Chichester. (In recent cases, such as Horsham, Ringwood, Salisbury, the means chosen is an LLP, probably for tax reasons.)
- Local Authority Building Control inspectors never visited the site (see page 1), Linden failed to observe the Building Regs. and appeared to exercise careless control over the quality of build, evidenced by abundant construction defects, some of which are life threatening.
- As houses were sold, the shareholders paid themselves £1,000,000.00 in dividends.
- Linden established a subsidiary ‘stooge’ management company to arrange premature handover of the development and multiple exposed defects were neglected 5 years later.
- The fall-back Building Guarantee turned out to be practically worthless to policyholders, unhelped by a symbiotic relationship between the developer and the provider, Premier.
- Although the shell company created by Linden remains liable to remedy genuine defects in workmanship, legal action to compel Linden to decently shoulder its responsibility to build homes fit for people to live in would be pointless, because after having paid the profits to shareholders the balance left is barely enough to pay for a winding up procedure.
Linden Homes calls in libel lawyers to silence customer who spoke to BBC
Leasehold Knowledge Partnership reported on February 25 2017, that Linden Homes, part of the Galliford Try group, is instructing defamation solicitors to act against the purchaser of one of its leasehold houses in Bedfordshire.
Louise O’Riordan featured in a BBC Look East report on the leasehold house scandal earlier this month.
She bought a three-bedroom leasehold terraced house at Linden Homes Kaleidoscope site in Dunstable in September last year.
A number of frustrations – including those concerning the leasehold tenure of her property – encouraged her to mobilise her neighbours and form a Facebook group: “linden homes | leasehold scandal | complaints | galliford try”
But the developer is furious that Mrs O’Riordan, who lives in the property with her husband and step daughter, also approached potential customers in the sales suite and questioned them about the information provided by the sales staff.
Michael Coker, MD of Linden Homes Midlands, wrote to her earlier this week:
“Your continuing distribution of defamatory misrepresentations of the facts, together [with] harassment of prospective purchasers and site operatives is unacceptable and the Company is instructing Solicitors accordingly.”
Mr O’Riordan is indignant because she claims that Linden Homes sales staff told her that the freehold to the site was owned by a nearby college.
In fact, it is owned by Linden Limited, whose directors are given as Peter Martin Truscott, the CEO of Galliford Try, Mark Robert Farnham, Andrew Richard Hammond, Tom Marshall Nicholson and Stephen John Teagle.
The misconception that the freeholder was the local college was widespread among Mrs O’Riordan’s neighbours, it appears.
Ground rents are £200 a year, rising in 10 years time with RPI and then every subsequent five years.
Andrew Selous, Conservative MP for South West Bedfordshire, was interviewed on BBC Look East.
“It seems to me that the developer is trying to make extra revenue selling the house and then collecting the ground rent.
“I think that is an unfair and wrong practice.”
Linden Homes said in a statement to the BBC: “Linden Homes has been clear and consistent in its response to Mrs O’Riordan and finds her claims unfounded and misleading.”
Linden Homes said that it would offer the freeholds for sale to the leasehold house owners of the properties at Kaleidoscope.
Mrs O’Riordan also has frustrations with Linden Homes regarding parking spaces outside her house – she thought she was buying two but only has one – and the quality of flooring, that she believed would be free as part of the developer’s incentives, but had to be paid for.
Acknowledgements to Leasehold Knowledge Partnership, Secretariat of the All Party Parliamentary Group on leasehold reform
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