December 8, 2022

We must stop freeholders and their managing agents ‘abusing’ leaseholders, says Bottomley in Budget debate

Sir Peter Bottomley intervened in the Budget debate yesterday calling for adequate resources to protect leaseholders from predatory freeholders and the managing agents that they employ.

He also repeated his call for Parliament to bring in “commonhold properly” and stop perpetuating the flawed leasehold system.

Sir Peter said:

“I say to the Government that there are some areas where money should not be restricted too much.

“On housing, we clearly have to improve leasehold, which requires civil servants in the Department for Communities and Local Government to watch what happens.

“We also need to bring in commonhold properly and make sure that resources are such that managing agents and freeholders do not get away with abusing leaseholders. I am not saying that they all do that, but it happens too often.”

Curiously, leasehold issues made a feint appearance in the Budget itself yesterday as the government – which only has 48 days left – said it will “take forward” the Competition and Markets Authority recommendations for the sector.

“These changes will make tangible improvements in the RPMS [residential property management services] market to the benefit of both leaseholders and landlords,” said the Chancellor in his full Budget statement.

Of course, this does not mean much beyond that leasehold is working its way through the engine of government.

The CMA report had some good elements – the ARMA rubbish that problems in the sector were restricted to non-member rogues was well and truly nailed.

It is good that the civil service involved in the sector now do understand that there are issues, which are only going to increase as ever more households live in flats.

Last Friday, Lord Ahmad of Wimbledon, Parliamentary Under Secretary of State for the Department for Communities and Local Government, made a statement about the private rented sector that included reference to LKP’s work in leasehold.

“There is an estimated 4.1 million leasehold dwellings in England, 1.6 million of which are in the private rented sector,” he said, referencing the revised increased figure for leasehold properties that originated with LKP.

“My department announced in August a number of areas that we are looking to address.

“A package of works is therefore being taken forward, which includes making it easier for tenants associations to be recognised and improving the provision of pre-purchase information to enable informed decisions to be made.”

Recognised residents’ (tenants’) associations are extremely important: they have the power to employ professionals to examine the accounts.

At this tribunal case, the freeholder of fancy West India Quay employed at a cost of £75,000 a legal army including a QC to resist recognition of a residents’ association.

The freeholder, the Yianis group, lost.

But why on earth should residents have to go to tribunal to obtain such a ruling?