Aviva, Persimmon Commit to Leasehold Changes in Face of Regulatory Investigation

By Adria Calatayud

The U.K.'s Competition and Markets Authority said Wednesday that it has secured formal commitments from leaseholders Aviva PLC and Persimmon PLC and warned other players in the sector to review their practices or face legal action.

The antitrust watchdog said Aviva has offered to remove certain terms from its leasehold contracts which cause ground rents to double, and agreed to refund homeowners who were affected by these ground rent clauses the excess money they had paid.

The regulator said Persimmon agreed to offer leaseholders of houses built by the company the opportunity to buy the freehold of their home at a price below market value.

House builder Persimmon separately said it has offered its commitments without any admission of wrongdoing or liability, and that its agreement with the CMA ends its involvement in an investigation into leaseholds by the regulator.

The CMA said the commitments from Aviva and Persimmon follow an enforcement action against housing developers in September and an investigation into firms that bought large numbers of freeholds.

"We now expect other housing developers and investors to follow the lead of Aviva and Persimmon. If not, they can expect to face legal action," CMA Chief Executive Andrea Coscelli said.

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

June 23, 2021 02:45 ET (06:45 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.