August 11, 2022

Bring in commonhold by 2020, says MP Jim Fitzpatrick

Jim Fitzpatrick: fighting of leaseholders in east London

Jim Fitzpatrick: fighting for leaseholders in east London

Jim Fitzpatrick, the Labour MP for Poplar and Limehouse and a patron of LKP, has moved an amendment to the Housing Bill that will see leasehold ended by January 1 2020.

Instead, flats should be sold through commonhold tenure only.

This is the first time since the Commonhold and Leasehold Reform Act of 2002 that the dreaded c-word has made a return to the legislative process.

It has set off a flurry of concern among the vested interests of the leasehold system – game-playing freeholders, their agents and the terracotta armies of lawyers and other professionals who serve the vested interests. Lobbyists for housebuilders are also aghast.

But … it will require a miracle for the amendment to go much further and onto the statute book. Furthermore, Jim Fitzpatrick is not a member of the Commons committee that reviews the bill, so the issue will have to be taken up by someone else to go further.

The government is desperate to increase housing, as George Osborne made clear in his Spending Review today. It still does not seem to care less whether this housing is freehold or whether house-buyers just buy leasehold (which are long tenancies in law).

Housebuilders such as Persimmon have not hesitated to build leasehold properties, where other housebuilders across the road are building freehold ones. Does this decision have anything to do with the long term revenue streams of leasehold?

Jim Fitzpatrick said: “Nearly 90% of the homes in my constituency are flats. Day-after-day I see the problems faced by these leasehold owners.

“Everyone from the right-to-buy owners of council stock, to the most expensive docklands developments face the same problem of dealing with the problems caused by leasehold law: service charges demanded with no accounts provided, huge major works bills and poor property management.

“This government is fully aware of the many problems faced by the leasehold sector, but yet again chooses to do nothing about those problems in the Housing and Planning Bill

“After 500 years we all know leasehold is a deeply flawed system. My view would be that its now time to bring things to an end. Commonhold is a system successfully adopted in almost all countries in the world. Commonhold causes fewer problems, results in more building and less litigation between the flat owners and the companies that manage the building.”

Click to view the amendment:

JimFitzpatrickHousingBill

Comments

  1. David Stevenson says

    There is no doubt about abuses in Leasehold exist but three is no guarantee these will cease under common hold. Managers still have to be appointed and without leasehold legislation flat owners will have no rights to challenge costs other than the rights of a minority unit holder / shareholder under company law, which would mean a challenge in the civil court instead of the Tribunal.

    Many developers offer 999 year leases with no ground rent and the option for lessees to acquire the freehold and the management without further costs. That is a far superior option as lessees retain all their individual rights under landlord and tenant law. How is common hold better than that?

    • Campaign against retirement leasehold exploitation says

      These are good points. Jim’s aim is to demonstrate that there are alternatives to leasehold – indeed, the rest of the world adopts them – and that Parliament should consider them.

      Do you have any comment to add to the Campaign against retirement leasehold exploitation / LKP submission to the housing committee? That offers reforms to leasehold.

      Then there is the comprehensive reform of leasehold outlined by Phillip Rainey QC at the LKP / Campaign against retirement leasehold exploitation roundtable at Westminster in January. (These were not his views, but they were proposals that could be considered.)

      http://www.leaseholdknowledge.com/packed-westminster-meeting-leasehold-reform