January 19, 2021

Housing Minister Mark Prisk holds leasehold meeting with Campaign against retirement leasehold exploitation – but keep pestering MPs!

After years of banging on a closed door, Campaign against retirement leasehold exploitation / Leasehold Knowledge Partnership held a meeting with Housing Minister Mark Prisk (left) yesterday.

But Campaign against retirement leasehold exploitation activists are urged to keep pressing MPs (and copy us in to your correspondence!)

As a result of the meeting, the minister is reviewing the following:

  • How right to manage is being frustrated by truculent freeholders, particularly of retirement developments;
  • How managing agents pool leaseholders’ funds in opaque bank accounts, rather than hold separate accounts for individual blocks as was envisaged in section 152 and 156 of the Commonhold and Leasehold reform Act 2002;
  • How freeholders secure full legal costs in litigation with leaseholders through administrative charges, whereas leaseholders legal costs are capped at £500.

The Westminster meeting was held on the prompting of Sir Peter Bottomley, Conservative MP for Worthing West, who has involved himself in leasehold disputes both in his constituency and beyond it.

He was accompanied by Sebastian O’Kelly and Martin Boyd, of Campaign against retirement leasehold exploitation / LKP, and Stephanie Smith, the barrister who won the “legal torture” case this year involving pensioners at Oakland Court in Worthing. Prisk, a former chartered surveyor, was assisted by civil servants Sally Blandford and Ian Fuell, who both handle leasehold issues in the Department of Communities and Local Government.

The meeting was told that the protections of leasehold law are not working, particularly in the retirement leasehold. O’Kelly outlined the cases of retirement developments which are repeatedly being frustrated in exercising the right to manage. Parliament’s intentions are being thwarted by freeholders who will use trifling legal arguments to stop right to manage. As LVTs set no precedent, their decisions are widely inconsistent and right to manage will be granted in one case and refused in another even though the arguments opposing it are the same.  The delays and repeated appeals that freeholders adopt often mean that original applicants are dead by the time right to manage is achieved. In these circumstances it is hugely difficult to keep the residents united in seeing the action through.

Further meetings with the Ministry of Justice will result from this.

Martin Boyd, who presided over the four LVT victories at Charter Quay in Kingston where the residents won back more than £500,000 in over-paid service charges, pointed out the unfairness in the LVT. These were envisaged by Parliament as a low-cost tribunal and legal costs were capped at £500. Freeholders’ costs are in practice unlimited, whereas only leaseholders costs are restricted to £500. The legal costs for leaseholders at Charter Quay were around £40,000.

Stephanie Smith explained how freeholders are getting around LVT rulings on legal costs. LVTs may rule that they cannot be levied as a service charge, but lawyers have successfully argued that they can be obtained as an administrative costs.

One of the most important aspects of leasehold is the need for clear and up to date accounting. Campaign against retirement leasehold exploitation / LKP has argued in favour of the adoption of sections 152 and 156 of the Commonhold and Leasehold Reform Act 2002. Stephanie Smith pointed out that there were issues why these provisions were resisted by social landlords and local authorities. She will be working with Campaign against retirement leasehold exploitation / Leasehold Knowledge Partnership to provide clear guidelines that achieve the same purpose.

“This meeting was extremely positive and we are at last pushing leasehold up the political agenda,” said O’Kelly. “But it is vital that Campaign against retirement leasehold exploitation activists do what Baroness Gardner said: drive your MPs mad on this issue.

“Unscrupulous freehold-owning landlords, their lawyers and managing agents, have made a mockery of the protections that Parliament intended for leaseholders. Politicians don’t like that.”

Comments

  1. Please do not forget those of us who own a freehold property on a (mixed) Peverel Retirement estate. We have no rights whatsoever under the current legislation, No LVT and RTM for us !

    • You are right, and we do forget it. Campaign against retirement leasehold exploitation did attempt to help with these issues at Windrush Court, where David Cameron was involved. But they are not resolved.

      It would be very useful if you could gather information of other freehold sites and send this information to me with contact details.

      The matter should be raised and the scale of freehold owners problems do need looking into. I have no idea how they are to be resolved, however.

      One aspect of Windrush Court, I recall, was that capital values of freehold property had held up very well, in spite of the covenants and management fees for common areas. Retirement leasehold capital values have fallen just about everywhere.

  2. The position about park homes — Campaign against retirement leasehold exploitation has mentioned recently about new laws, etc. coming in – I have spoken to an ex–frustrated park home owner after years of unjustified charges–like for example, grass cutting charges where they had to do it themselves — he is glad to get out of it all, however, he has now found out that the freeholder is selling freeholds on their pitches only and not the roads or other parts of the site— he believes that the freeholder is doing this to avoid future issues with the council to do with these laws! Can anyone explain why this should be? It sounds like another wingle wangle to me.

    • Paul is making a very good point. Curiously, Mark Prisk’s predecessor Grant Shapps supported regulation of park homes, but thwarted it for leasehold even though the issues are so similar. It would be very useful if a Campaign against retirement leasehold exploitation activist looked into this area, as there is so much on at the moment. Any volunteers?

  3. MICHAEL HOLLANDS says

    Have you looked at the PHAS website, they look very helpful
    PARK HOMES ADVISORY SERVICE

  4. Does anyone think our latest Housing Minister Mr Mark Prisk will be able to do anything to stop leasehold abuse?

    The promotion of the commonhold system to replace the leasehold system was previously spearheaded by Labour MP Nick Raynsford and Frank Dobson as part of the New Labour Party election manifesto before Tony Blair came to office in 1997. Since then, we have had many housing ministers after Nick Raynsford was moved aside, but Labour has never explained why commonhold was dropped from government policy in 2004 by Keith Hill as Housing Minister.
    Caroline Flint was reported in the press as saying she was treated as “window dressing” by the other members of the inner cabinet. So is the Housing Minister’s position just “window dressing” for the inner cabinet and having NO ministerial power to bring in new legislation to stop leasehold abuse ?

    Who is wielding the power and thinking process behind the Inner Cabinet to keep England and Wales locked into leasehold? The only countries still imposing the outdated leasehold system on its citizens are England, Wales and Hawaii: the rest of the world has moved to commonhold.

    1997 Hilary Armstrong
    1999 Nick Raynsford
    2001 Lord Falconer
    2002 Lord Rooker
    2003 Keith Hill
    2005 Yvette Cooper
    2008 Caroline Flint
    2009 Margaret Becket
    2009 John Healey
    2009 Grant Shapps
    2012 Mark Prisk

    • Lesley Newnham says

      Perhaps Keith Hill will explain why commonhold was dropped in 2004 when he was housing minister now that he is supposedly ‘independent’ (not sure how he can be independent?) at ARMA-Q!
      He obviously could have saved us all a lot of bother if he had acted then.

  5. These CARL newsletters can reminder us of what Keith Hill , Housing Minister said & did in 2004 to retain the Leasehold system and prevent its replacement by putting the Commonhold system into use. Even Scotland and Southern Irelend have stopped using leasehold tenure , unfair leases and terminated leasehold abuse.

    http://www.carl.org.uk/newsletters/NL%20Spring%2004.PDF
    http://www.carl.org.uk/newsletters/TL%20Summer%2004.PDF
    http://www.carl.org.uk/newsletters/TL%20Autumn%2004.PDF

  6. Barry Sheerman Questions:

    Hansard source ( Citation : HC Deb, 16 Dec 2004 , c1239W)
    http://www.theyworkforyou.com/wrans/?id=2004-12-16a.205280.h&s=speaker%3A10534#g205280.q0
    Barry Sheerman ( MP Lab, Huddersfield ) :
    To ask the Deputy Prime Minister if he will investigate (a) the activities of Estates and Management Ltd. and (b) its treatment of leaseholders in England and Wales.
    • Hansard source (Citation: HC Deb, 16 December 2004, c1239W)

    Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)
    The Office of the Deputy Prime Minister does not have the power to carry out investigations of companies that own and/or manage residential leasehold properties. Investigations into companies under company law are the responsibility of the Companies Investigations Branch at the Department of Trade and Industry, who are able to consider applications for, and carry out investigations.
    However, through the wide-ranging leasehold provisions in the Commonhold and Leasehold Reform Act 2002 the Office of the Deputy Prime Minister has significantly improved the rights of long leaseholders. These provisions include the right to ask a leasehold valuation tribunal to determine the liability to pay, and the reasonableness of, administration charges.
    On 16 November the Office of the Deputy Prime Minister also made the 5th Commencement Order which will bring into force the latest phase of provisions to protect leaseholders and improve their rights. These will include the requirement for landlords to demand ground rent in a prescribed manner before being able to take any action or imposing penalties for late payment, and will prevent landlords from forfeiting leases as a result of trivial debts consisting of ground rent, service charges and administration charges (or a combination of them) where the debt does not exceed £350, unless all or any part of the sum has been outstanding for more than three years. These provisions will come into effect from 28 February 2005.

    To ask the Deputy Prime Minister what further steps he is taking to protect leaseholders from intimidation by freeholders.
    • Hansard source (Citation: HC Deb, 16 December 2004, c1241W)

    Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)
    Long leaseholders in England will have improved protection and rights with the implementation of the next phase of provisions in the Commonhold and Leasehold Reform Act 2002.
    These measures are in addition to the provisions that have already been introduced to improve leaseholders’ rights, and will:
    require landlords to demand ground rent in a specific manner before being able to take any action or impose penalties for late payment;
    require landlords to first satisfy a leasehold valuation tribunal, court or arbitral tribunal that a disputed breach of a lease has occurred before being able to take any forfeiture action;
    prevent landlords from forfeiting leases as a result of trivial debts consisting of ground rent, service charges and administration charges (or a combination of them) where the debt does not exceed £350, unless all or any part of the sum has been outstanding for more than three years.
    Prevents landlords of leasehold houses from insisting that leaseholders use a particular insurance company nominated or approved by them to insure the house.
    These measures form part of the 5th Commencement Order and will come into effect from 28 February 2005.

    Can you believe this ? The Housing Minister (and civil servants ) claim to have NO powers to investigate companies that own freeholds and /or manage residential leasehold properties.

    BUT they claim the right to decide arrears of ground rent and service charge exceeding 350 pds are sufficient grounds for the freehold company to commence forfeiture.

    The Housing Minister and Civil servants have been behaving like the proverbial monkees since CLRA 2002 was passed –
    Seeing nothing
    Hearing nothing and
    Doing nothing

    but sending out standard fob-off reply letters to MPs who have been raising complaints from their constituents .

  7. Correction for misquoting the “proverbial monkeys” :

    The three wise monkeys (Japanese: 三猿, san’en or sanzaru, or 三匹の猿, sanbiki no saru, literally “three monkeys”) are a pictorial maxim. Together they embody the proverbial principle to “see no evil, hear no evil, speak no evil”.

    Today “See no evil, hear no evil, speak no evil” is commonly used to describe someone who doesn’t want to be involved in a situation, or someone willfully turning a blind eye to the immorality of an act in which they are involved.

  8. This has been copied on 4th Jan 2013 from the Companies House :

    Reporting Fraud to Companies House
    How we can help
    Companies House is an executive agency of the Department of Business, Innovation and Skills (BIS). The function of Companies House is to receive, store and disseminate information from limited companies and certain other bodies. Please note that Companies House does not have any specific investigatory powers.
    The increase in Fraud is a serious matter and we fully appreciate customer concerns and want to do all we can to assist in resolving these issues.
    Please note however that we are only able to advise on issues relating to fraudulently filed statutory documents sent to Companies House, such as:
    • Registered Office addresses changed without company approval
    • Individuals being appointed as an officer of company without their knowledge or consent
    • Company names being changed without permission
    • Invalid addresses being used for a company’s registered office and/or as an address for a company officer
    • Internal Disputes between company officers involving the filing of invalid documents.
    Please ensure that you provide us with full details of your complaint, including your contact details. Any allegations of fraud relating to the filing of these documents should also be reported to the police as they are the appropriate authority to deal with such matters.
    If we receive a subsequent request for information from the police we will endeavour to assist them in any way we can.
    Advice about different types of ‘scams’ such as job/work visa, escrow and lottery scams can be found on the Important Fraud Warning page.
    If your complaint satisfies any of the above, you can e-mail details to us at fraud@companieshouse.gov.uk (We will aim to respond to your email within 5 working days.)

    The Insolvency Service
    Please note that we cannot assist with any issues that do not involve forms being filed at Companies House.
    If your complaint involves the conduct of a company or its officers you should contact the Insolvency Service.
    The Insolvency Service is an Executive Agency of the Department of Business, Innovation and Skills (BIS). The Company Investigations team within the Insolvency Service has the power to investigate limited companies where information received suggests corporate abuse; this may include serious misconduct, fraud, scams or sharp practice in the way a company operates.
    To complain about a limited company that is still trading:
    Telephone : 0845 601 3546
    Email: intelligence.live@insolvency.gsi.gov.uk
    Address:
    Intelligence Hub
    Intelligence & Enforcement Directorate
    Investigation and Enforcement Services
    Insolvency Service
    3rd Floor Cannon House
    18 Priory Queensway
    Birmingham B4 6FD