Housing & Pensioners

Good4you very strongly argues for a Sectional Title Act to replace the current leasehold system of 'owning' flats.

The problem: Leasehold contracts benefit the rich and prejudice the poor. Buying Freehold is the best investment of a lifetime, and Leasehold is the worst possible lifetime investment. It is legally impossible to own part of a building in Britain. The best one can do is to ‘buy’ the right to a contract of lease (a rental contract) by Leasehold. The net effect of leasehold property is that just when the poor have finished paying for the biggest asset they ever ‘bought’, they must GIVE possession back to the rich landowner, who sells it again. Like selling homing pigeons.

 

The Solution: Britain can copy South Africa, which already has a “Sectional Titles Act, No 95 of 1986” by which a flat can be bought by freehold so that it can be inherited by one’s descendants in perpetuity. Possession never automatically reverts to any former title holder, nor to a freehold lessor.

 See: http://faolex.fao.org/docs/texts/saf85682.doc

 

Our Aim: We wish to research and write a comparative document about Leasehold vs Sectional Title, and to present it to members of Parliament so that they can pass a similar Sectional Title Act in Britain.

 

Who will benefit:

Disabled People. There are 11 million disabled people in Britain, and half of them live in poverty. We want them to be able to buy a small, cheap, piece of a building for their children to inherit. That other poor people in Britain will gain the advantage of access to the property ladder is a bonus to our objective.

Taxpayers. In Britain provision for old age vests in the state, instead of in the individual. Sectional title will help shift the responsibility for old age into the hands of the individual because Freehold ownership gives people wealth, assets, and a formidable stake in one's own old age. Coming to the end of a lease puts pensioners in state housing at the expense of taxpayers.

 

Cost and Funding: This is a one year project of research, publication and lobbying for a new law. A budget of £30,000 will cover a portion of rent and overheads, the direct cost of research, the direct cost of publishing the results to the right people, and the direct cost of meeting with members of parliament and lobbying for the new law. One year is enough to get the project started in such a way that it will continue by itself in the hands of those who are informed of the issue, and take up the issue.

 

Capability: Francois Greeff, managing Director of Good4you, is a Chartered Secretary by profession, and holds a masters degree in Corporate Governance. He is a highly capable and skilled researcher who has, for a quarter of a century, done advanced genealogical research on three continents, regarding records over four centuries, in four languages. He lived in South Africa where he studied the Sectional Titles Act, No 66 of 1971, as amended. He also studied the Share Blocks Control Act, No 59 of 1980, and the Alienation of Land Act, no 68 of 1981.

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 Postscript: additional detail.

 One does not “buy a flat” by leasehold. One merely buys the right to a contract, by which the property is rented very cheaply (nominal ground rent). The rental period is usually in the region of 100 years. At the end of the rental period one must GIVE, without consideration or payment, one’s home back to the lessor, who is the Freeholder. At that stage the freeholder may be the child or grandchild of the original person who owned the freehold title. The true inheritor of the property is thus the descendant of the freeholder, instead of the descendant of the occupant. The situation is exactly the same as when Britain had to GIVE Hong Kong Island back to the Republic of China. In the beginning Britain rented an almost bare rock and put a century of labour into it, and built billions of pounds of buildings, factories and industries on it, and developed one of the most powerful markets in the world. Then they had to give away all the fruits of a century of added value. It is like a homing pigeon flying away, and taking all her offspring with her.

 Leasehold homes, offices, shops and factories are exactly the same. They enrich the rich at dreadfully unjust cost to the poor. 

—  Rich People:

—  Freehold

—  Can buy big units

—  Appreciating Asset

—  Instalments accrued

—  Good security for loan

—  Finance kids’ education

—  No permissions needed

—  Low cost legal steps

—  Ultimate Inheritance

—  Best contract in lifetime

—  Poor People:

—  Leasehold

—  Cannot buy small parts

—  Depreciating Asset

—  Instalments alienated

—  Poor security for loan

—  Not in later years

—  Landlord’s consent needed

—  High cost legal steps

—  Give back to the Rich

—  Worst lifetime contract

 

Sectional Title

  • —  Any part that can be rented can, equally, be bought (eg. a room in a hostel, a bedsit, a flat, a house)
  • —  Housing benefits for the poor can include subsidised purchase.
  • —  The poor owner acquires a vested interest in social investment: They go for education, better jobs, upward mobility. Job stability improves with the need to pay off a mortgage.
  • —  Tenants don’t care; self ownership breeds pride.
  • —  Security and provision for old age becomes vested in oneself, not only in government
  • —  Invest own labour in property – The labour of home improvements add value to own capital.
  • —  Buy, improve, sell at a profit.
  • —  Small unit becomes deposit for bigger unit.
  • —  Appreciating asset
  • —  Excellent security for loans
  • —  A form of wealth that is an excellent buffer against personal disaster.
  • —  Kids can inherit from parents or grandparents.
  • —  Community values are enhanced by interaction in the “body corporate”. you get to know your neighbours, and to work with them.
  • —  Best investment in a lifetime!
  • —  http://huis-huis.co.za/sectional-title.htm
  • —  http://www.justlanded.com/english/South-Africa/South-Africa-Guide/Property/Community-Properties
  • —  http://www.saiv.org.za/v1/docs/Sectional_Titles_Act-95-of-1986_Steyn.ppt

 

There are 60,000 homeless families living in temporary accommodation in Britain today. The taxpayer must perpetually pay to house the same number, although the actual people rotate and move on. Instead of giving people a housing benefit the government can introduce a partnership scheme by which the poorest are helped to buy cheap sectional title properties so that they develop responsibility and have a vested interest in working to protect what they own.

 

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