An open letter to Robert Jenrick: the costs of delayed leasehold reform

Dear Robert,

Just over ten years ago, an old leaseholder died of shame because she could not pay the huge major works bill from her social sector landlord.

That single death saw one of your predecessors pass a law in her name to limit the large bills that social sector leaseholders have to pay. We now know that law failed, and we continue to see tens of thousands of people facing the same cruel situation as that poor lady.

“I was appalled at Florence’s treatment and was determined that no other leaseholder should ever have to endure the stress and hardship she experienced in the final weeks of her life,” said the then Secretary of State Eric Pickles.

We at Leasehold Knowledge Partnership have spent over a decade trying to help ministers, officials and MPs understand the serious failures in leasehold law across the social, private and retirement sectors. It would be fair to say that our input has not always been welcomed at the time, even though history shows we were right.

Minister Grant Shapps and officials were keen to tell me and my local MP on a number of occasions in 2011 that I was simply wrong.

They assured everyone that leasehold law was “balanced” and “mostly working well”.

Hopefully we have helped convince you, and your two most recent predecessors, and your officials, that the law is not “balanced” and that many things in the leasehold sector are in fact working quite badly.

We have contributed to numerous projects undertaken by: the OFT; and then the CMA; the Law Commission and the Department. We have contributed to the resulting White papers, Green papers, consultations, discussions, and reviews. Despite this, there is yet to be any substantive reform.

This lack of reform means that hundreds of thousands of leaseholders continue to pay the price for defective legislation.

In the most extreme cases that means some have lost their homes.

There are thousands now living in homes they can’t afford to stay in, but which they also can’t sell.

Over a hundred thousand have onerous lease terms, many of which are not being corrected, despite the claims of the sector pledge.

Hundreds of thousands are no longer saleable because they may have some form cladding.

Many in the social sector still face the same huge major works bills, which Florrie’s Law was meant to stop.

The purpose of this open letter is to ask you 6 questions:

1. Is it right that, during a pandemic, there are social landlords threatening forfeiture, despite your clear statements that this must not happen?
2. Is it right that the social sector regulator has concluded it has no power to regulate leasehold issues for social sector leaseholders?
3. Is it morally right that leaseholders in the social sector still face huge bills, despite Florrie’s law, and that often, when agreeing their payment plan, the leaseholder is required to waive their legal right to dispute the level of the charges?
4. The social sector Green paper produced in August 2018, and the results from the consultation, have never been published. Is this an effective use of government resources?
5. The CMA made clear, in their 2014 leasehold inquiry, that the Section 20 major works consultation process needed to be reviewed. Since 2015 the matter has been under almost constant consultation by your department, but with no result. Is this an effective use of government resources?
6. Despite the government’s cladding fund, we still have many problems for cladding sites. The most egregious of these seems to be that some social landlords are seeking to pass on 100% of cladding costs to shared owners who may only own 25% of the lease for their flat. Is this a position the government condemns or condones?

Martin Boyd
Chair of Trustees

---

Supporting evidence:

1. The Covid-19 letters. Notting Hill Genesis has sent the following standard letter to a number of leaseholders threatening forfeiture even though small or monies may be owed or in some cases are in dispute.

2. The lack of regulation. In July 2019, the social sector regulator advised in regard to Section 20 major works consultation by Notting Hill Genesis (or rather the lack of it) that:

“After considering the information you sent to the regulator, we concluded the consultation in question appears to relate to a consultation with leaseholders. Although we recognise the importance of this issue for the residents association, under the legislation which governs our work, we are unable to consider complaints about leasehold properties and the consumer standards, including the Tenant Involvement and Empowerment standard which you refer, do not apply to leaseholders.”

(null)

(null)

3. Huge demands:

£146,257 – the highest major works bill ever? – Leasehold Knowledge Partnership

Leaseholders at Tustin Estate run by Southwark Council have had an estimated major works bill at a staggering £146,257.22p for a two bedroom flat. This may well be the highest bills ever to have been sent out in the social sector. If anyone has seen a larger bill per flat for a social sector major …

4. The social sector green paper. Issued in August 2018, the website page still states: “We are analysing your feedback”.

A new deal for social housing

The social housing green paper proposes fundamental reform to ensure social homes provide an essential, safe, well managed service for all those who need it. We will consider how we can re-balance the relationship between residents and landlords to ensure issues are resolved swiftly and residents’ voices are heard.

5. The 2014 CMA report made clear the need for a review of Section 20 major works. The review by MHCLG has been ongoing since 2014.

Residential property management services

April 2016 Further update on CMA recommendations 2 December 2014 Publication of market study findings and recommendations 19 September 2014 Deadline for representations on the range of remedies set out in update paper 1 August 2014 Publication of update paper on the market study 4 March 2014 Launch of market study 31 March 2016: This update report provides an overview of the progress that has been made in the implementation of our recommendations, what has been achieved to date and what further work remains in progress.

6. The problems faced by shared owners has been raised in the Commons by shadow housing minister Mike Amesbury:

Mike Amesbury: Young, highly mortgaged, often shared owners, with now uncertain employment … are facing homelessness and ruin over cladding – Leasehold Knowledge Partnership

By Harry Scoffin Shadow housing minister Mike Amesbury has warned government of the disaster facing a generation of young home buyers owing to cladding bills. Coming on top of post-Covid 19 job uncertainty, bills for waking watch fire wardens or cladding remediation of blocks lower than 18 meters, which are to receive no government handouts, …

In case the Secretary of State and the Department remain unclear after ten years why so many leaseholders do not trust the government service LEASE, here is their comment on Florrie’s Law which everyone in the sector knows does not work. According to LEASE, it does:

Mandatory capping of major works service charges for leaseholders of social landlords in England (“Florrie’s Law”) – The Leasehold Advisory Service

By Fenella Fern, Legal Adviser August 2014 The Social Landlords Mandatory Reductions of Service Charges (England) Directions 2014 (PDF) These directions, popularly known as “Florrie’s Law”, came into force on 12 August 2014. They apply to leaseholders of social landlords, in England, who are individuals (not a company), and who occupy their house or flat as their …

Notting Hill Genesis, the Social Housing Regulator and ministers all point leaseholders to LEASE for advice.

While some of the body’s advice is very good, other information they share is little more that government propaganda.

Florrie’s law: new cap for council house repairs comes into force

Local Government Secretary Eric Pickles vowed to introduce the cap after a 93-year-old constituent was landed with a £50,000 bill by her local authority for roof repairs. Newham Council based its fee on a guess because it had not conducted a proper survey on the first-floor flat.