Support for leasehold reform gathers momentum
Conveyancers are stepping up efforts to push for long-awaited reforms to leasehold law amid predictions that 2017 is set to be another bad year for leaseholders. More than four million homes in England are leasehold, as were nearly half of all new-build registrations in England and Wales last year.
Housing and planning minister Gavin Barwell told MPs last month that he ‘most certainly’ did not ‘feel comfortable with the level of concern right across the country’.
He said he was ‘very keen to explore how we can promote greater transparency and fairness, and to work with all interested parties to improve leaseholders’ experience of home ownership’.
The Conveyancing Association says it was ‘greatly encouraged’ by the House of Commons debate and will shortly be publishing a list of ‘action points’ to pursue.
Law Society president Robert Bourns said: ‘Complications due to leasehold properties frequently cause frustration for conveyancing solicitors and homebuyers, and we are pleased that both parliament and government are showing an increasing appetite to grapple with these issues.
’We have previously recommended that, if the government is minded to make changes around residential leasehold property, there are a number of areas which it could helpfully review or reform.’
These include considering the parameters for regulating service charges payable by long leaseholders and allowing long leaseholders to require a landlord to re-tender for property management services.
The Society suggested reviews on how excessive ground rents can be controlled and the current statutory provisions to extend complex leases.
The government should consider applying the principles and concepts in the Landlord and Tenant Act 1988, which sets out duties on landlords to respond within a reasonable time in relation to lease restriction consents. Chancery Lane notes this has worked relatively effectively for commercial leases.
The Society also recommends that larger managing agents are mandated to publish their fees, potentially in a centralised place such as Land Registry. The Commonhold and Leasehold Reform Act 2002 should be amended so that such fees can be challenged in the First-Tier Tribunal.
Bourns said: ‘These proposals have been developed drawing on the considerable expertise and experience of our members, and set out practical and commonsense proposals to deal with concerns around ground rent, extending the length of leases, and delays in the conveyancing process caused by leasehold properties.’
London property company Leasehold Solutions predicts 2017 will be an even worse year than last for the UK’s 4.1m million leaseholders.
Managing director Louie Burns said: ‘It is no exaggeration to say that 2016 was the worst year to be a leaseholder in recent times. From increasing the costs of seeking a resolution through the courts, to a seismic decision on how the value of leasehold extensions are calculated, to a new ruling that affects leaseholders’ right to manage their block, power has been steadily concentrated with already powerful freeholders, to the detriment of leaseholders.
’I’m afraid this trend looks set to continue during 2017, perpetuating the many injustices and inequalities of the UK’s feudal and outdated leasehold system.’
The Law Commission identified leasehold law as a potential project for its latest programme of law reform. Barwell told last month’s debate that the government was ‘working closely’ with the commission.
By Monidipa Fouzder (Courtesy of the Law Society Gazette)