The All Party Parliamentary Group on leasehold and commonhold reform met on December 6 at Westminster.
Overshadowing all was the conclusion of Communities Secretary Sajid Javid’s report on “Tackling unfair practices in the leasehold market”: the review that he announced in the summer, that concluded in September, into the ground rent and leasehold houses scandal.
A response had been anticipated before December. Now it is inevitably going to be raised at the Commons debate on leasehold on December 21.
The APPG heard two important current issues:
The gargantuan bills run up by freeholders to remove Grenfell Tower cladding from blocks of flats, which may well end up being paid by leaseholders.
The appalling theft of the mobile home of Sonia McColl OBE, who set up the Park Homeowners Justice Campaign, in what appears to have been a motivated crime.
LKP does not involve itself in issues concerning park homes as we simply do not have the resources – although forensic examination of the banditry in this sector is long overdue.
However, we are supporting Mrs McColl.
The state honoured her with an OBE, but does not seem to have protected her from losing her home.
As a result, we have launched an appeal for her and raised to date a pledge for £10,000.
Please give generously: Sonia McColl gave her time and effort freely to help her neighbours and now she is suffering for it.
Her address to the APPG was a moving appeal for help, and we should give it and show solidarity that these practices – mainly inflicted on pensioners – are unacceptable.
Park home campaigner Sonia McColl OBE tells MPs how her home has been stolen in revenge theft
Sonia McColl OBE (left), the founder of the Park Home for Justice Campaign, whose mobile home was stolen in what is believed to be a motivated crime addressed MPs last night.
Mrs McColl, 70, a widow told of how she had experienced death threats and intimidation from site owners.
“These included phone calls at night, threats to my dog and even shouting outside my door in the middle of the night.”
The site owners were incensed by her campaign, particularly issues surrounding the blocking of site sales when owners of park homes need to sell and want to move.
“Our campaign had upset the site owners by criticising practices experienced by park homeowners, particularly
them blocking site sales.
“It had got to the point where I really could not take anymore and my family were very worried about what was going on so I decided to move.”
Mrs McColl bought a second hand park home for £30,000 and was waiting for it to be delivered to a plot beside her daughter’s house in Devon when it was stolen.
“A part time policeman was assigned to the case until the Leasehold Knowledge Partnership managed to get this crime covered by BBC and the press. But the home has not been found.”
Press reports here: https://www.leaseholdknowledge.com/lkp-prods-media-cover-theft-sonia-mccoll-obes-park-home
Sebastian O’Kelly , LKP trustee, told the APPG that LKP did not habitually involve itself in park home issues as resouces are stretched as it is with leasehold.
“The white collar bullying that leaseholders experience at the hands of freeholders and the professionals they employ are as nothing compared with the intimidation faced by many park homeowners.”
Sir Peter Bottomley told Mrs McColl: “Please keep going, because you should not have to stand alone.”
Because it is the only registered charity in the sector, LKP has set up an appeal for Sonia McColl with the aim of buying a new mobile home.
To date, £10,000 has been pledged.
Leasehold deluges the Law Commission as moves for reform gather pace
The Law Commissioner Nicholas Hopkins, whose work will be key to a systematic reform of leasehold law, told the APPG last night that residential leasehold makes up “one of our biggest post bags”.
“What we see is that the calls for reform have become louder; they have become more urgent and, further, that the issues have become of greater interest to Government,” he said.
The Law Commission will play a key part in any systematic reforms of leasehold law.
Mr Hopkins listed the Top Ten leasehold issues raised with the Commission.
1/ Commonhold. “Despite its apparent attractiveness hardly any sites have been developed and there are various issues to do with that. Part of the difficulties is due to the legislation. These need to be resolved.
2/ Enfranchisement. “We were told that the procedure was complex and exercising these rights is too costly.”
3/ Regulation of managing agents. This is currently under review by the DCLG. “Stakeholders told us about poor management service provided by some managing agents relative to the fees charged, and called for improvement and better redress.”
4/ Unfair terms in leases, including onerous ground rent and high service charges.
“In the Law Commission review of event fees we looked at challenging leasehold terms under consumer rights legislation. There is more work to be done particularly to ensure that the terms of existing leases can be considered under the Consumer Rights Act when those leases are transferred.”
5/ Service charges. “Stakeholders complained about the complexity of legislation and the lack of transparency and ineffectual consultation procedures.”
6/ Right to manage. “We were told that the process is too complex and that there are onerous qualifying criteria.”
7/ Right of first refusal. “This is the right to be offered to freehold before it is sold to a third party. We were told that this right is of limited practical importance in part because the legislation is poorly drafted.”
8/ Leasehold administration fees. For example, the landlord’s costs for consent for assignment. “This is something that the Conveyancing Association has highlighted recently in its work.”
9/ Energy efficiency. “This is the problem of raising energy efficiency in leasehold properties in part because the person who reaps the benefits of those measures is not the person who has to pay the cost of installing energy efficient measures.”
10/ Complexity of legislation. “There is dissatisfaction with the general complex network of leasehold legislation which is partly the result of frequent piecemeal reform. We were told that there is a need for rationalization, simplification and streamlining.”
“In sum, we have an area of Law which is criticised for its inconsistency, for its complexity, for the cost and fees involved and for its unfairness, with insufficient regulation and lack of transparency.
“There are aspects of leasehold that we agree are ripe for reform, but we need to prioritise in order to make the lives of Leaseholders considerably better and to offer a viable alternative to leasehold.”
London mayor wants ‘independent’ advice service … but no mention of the existing Leasehold Advisory Service
The London mayor’s office wants to see a national fully funded and independent advice service for leaseholders, the APPG was told.
The APPG was addressed by the London deputy mayor James Murray, who heads Sadiq Khan’s housing strategy.
But there was no mention of the Leasehold Advisory Service, which had to be reminded by the housing minister earlier this year that it must be on the side of leaseholders:
LKP has serious concerns about this body: its non-representative board; its conflicted chairman Roger Southam; its total silence in the face of widespread evidence of leasehold abuses.
These concerns have been raised in the Commons by Justin Madders and Sir Peter Bottomley, and by the APPG chairs with ministers.
Mr Murray said: “LKP’s own research shows that over 50 per cent of housing in London is leasehold. In addition, 90 per cent of new homes are leasehold, so this is an issue that is going to be increasingly important to Londoners.
“Improving advice and support on leasehold for Londoners is something that the mayor is very keen on.”
Mr Murray emphasized that there was no political division on dealing with leasehold and the mayor’s office approached the subject in a “spirit of co-operation” with government.
“What we need to do is work out a practical solution to improve the experience of leaseholders. The focus has been on new build property and the tenure of new flatted developments.
“But we want to make sure that there is greater provision for existing Leaseholders who bought some time ago, but who are now stuck in a position where they haven’t necessarily got the right supporting services.
“I think it is crucial to that is funding a fully independent advice service.”
He added that the mayor’s office “broadly support the aims of the APPG and it’s report on commonhold as a more attractive alternative form of tenure”.
“When we come to leasehold houses I think there is very strong support across the board for stop them.
“We agree with lease extensions being less difficult and a more formulaic approach is needed [a reference to Justin Madders’s Bill, which is due for a second reading in February].”
“This is important for Londoners who bought leases to council flats in the 1980s on a 125-year leases, because these will be coming up for extension.”
“Those who bought through help to buy in the 1980s will still have a really long time left on the lease, and the cost of extending them will be pretty normal.
“However, council’s could be more proactive stop by offering lease extensions at a reasonable price.
“Nobody ever promotes these to the leaseholder and nobody is advertising the importance of lease extensions.
“So you have to become aware of the fact that you have a problem before you extend your lease, and that could be avoided.”
Gleeson Homes boss tells MPs how council planners can stop leasehold houses
Ruth George, Labour MP for High Peak in Derbyshire, asked the APPG how councils could prevent housebuilders from building leasehold houses.
“We have got a lot of new build leasehold houses and I wanted to ask whether others in the room have experience of councils preventing planning permission on them, or whether this is something that we could call for?”
A reply came from an unusual quarter: Jolyon Harrison, the CEO of Gleeson Homes.
He responded: “Gleeson is a housebuilder that does not do leasehold houses.
“Every planning permission application comes with a viability study. You should mark the cards of your planners to ask developers whether the houses are going to be sold leasehold.
“If they are that increases the viability of the scheme. Therefore the builders cannot ask for a reduction in, say, affordable housing stop.
“This would be quite a big incentive for housebuilders not to build leasehold houses.”
Regeneration via compulsory purchase is a scandal, too
Louie Burns, Leasehold Solutions, told the London deputy mayor James Murray:
“I think it is a scandal that leaseholders who bought ex-local authority flats are facing compulsory purchase owing to generation schemes and how they are treated through that process. I think this is a scandal that matches leasehold houses.
“We are seeing more and more people put under threat of compulsory purchases.”
Mr Murray replied: “This is something that is very high on the agenda in London and some of the issues that have been associated with the compulsory purchase are well known.
“The mayor issued guidance on good estate regeneration over a year ago and he has been consulting on.
“One of the key priorities of good practices is making sure that this is a fair deal for leaseholders and freeholders as part of any estate regeneration plans. That means making sure that the offers in terms of acquiring a properly as part of an estate regeneration plan are fair and insuring the residents have the option of staying on the estate, through shared equity or shared ownership or whatever the appropriate mechanism.
“We want to make sure that they stay on the estate if that’s what they choose to do and stay part of the community.”
Vast bills for fire marshals and removal of Grenfell cladding
Jim Fitzpatrick, MP for Poplar and Limehouse, APPG joint chair and a patron of LKP, spoke of the enormous bills being dumped on leaseholders to remove Grenfell style cladding.
He was speaking in response to Andrew Pattinson, director of the Independent Review of Building Regulations and Fire Safety, which is heading a review that will report before Christmas.
“A whole range of cases has come to public attention, with The Times covering the issue this week.
“As well as the cost of removal of the cladding, there is the cost of the retention of fire marshals on some sites – around 60-100 of which have the cladding.
“The cost is falling on leaseholders who were not responsible.
“The cost of the fire marshals in the number of cases appears to be extravagant – to be generous. In Croydon 100 flats are paying £25,000 a month; in west London 300 flats are paying £165,000 a month stop and one place in my constituency with 500 flats is paying £32,000 a week.
“The cost then goes to the leaseholders, which like all the other leasehold charges is very difficult to combat, challenge and ultimately to go to court over.
“This is a completely different area and does not intrude on Andrew’s work. His team of experts are doing really important, fundamental work and they are making really fast progress.
“But leaseholders face the danger of being penalised for something that was not of their causing.”
Tom Woodley, of Town and City property management, said that his firm had produced its own highly regarded fire safety brochure in response to the Grenfell tragedy.
It is circulated to leaseholders blocks managed by Town and City, which is an LKP accredited managing agent.
He ensured that a copy was passed to Mr Pattinson after the meeting.
Justin Madders’ Bill for a statutory formula to end lease valuation racket needs government backing
Justin Madders’ Bill to allow leaseholders to buy out the freehold of their sites for 10 times annual ground rent needs government backing, the MP told the APPG meeting.
“We’ve had good cross-party support, with some MPs wanting to support it but unable to get on the paper, which is a good sign.
“We’ve had lots of leaseholders putting pressure on their MPs asking for support, but although it has its second reading on February 2 we are sixth on the list to be debated.
“This means that it is unlikely to be heard, which means it gets put off for a further time. We have asked whether the government will support any elements of the bill, which will mean more time and a likelihood of getting passed. But we are waiting for an answer on that and will just have to see.
We are in a living nightmare, say leasehold house owners
Katie Kendrick, one of the founders of the National Leasehold Campaign Facebook group, told the APPG:
“There is a general feeling in the group that they are in limbo. People don’t know what’s happening to the leasehold houses – and flats – that they can’t sell.
“You can’t move even from properties with ground rents that are paid in line with inflation. Even here sales are falling through.
“People are ringing me up asking, how the hell do we get out of this? And I don’t know.
“It is a living nightmare. What we want is our freehold and we want it for a fair price, without paying inflated prices. In some cases the fees alone – which are paid by the leaseholders – is more than the cost of the freehold.”
Sir Peter Bottomley urged the Facebook group to put pressure on their MPs: give examples of scandals demands and fees and urge them to attend the debate on leasehold on December 21.
“Thousands of leases come up for extension every year, and for enfranchisement, and we must get these costs in proportion.
“They ought to be low; it ought to be simple and there should be very little argument in most cases, and as a result we would have a far better housing situation.”