Sir Peter Bottomley is to calling for an urgent meeting about leasehold issues with Housing Minister Mark Prisk, following the Leasehold Knowledge Partnerhsip /Campaign against Retirement Leasehold Exploitation conference at Westminster this afternoon.
“It is quite clear that pensioners and other leaseholders are facing serious issues and this need to be addressed,” Sir Peter told a gathering of 20-30 including interested MPs and Lords.
Many of those attending, such as Caroline Spelman, MP for Meriden in Birmingham, had been contacted directly by Campaign against Retirement Leasehold Exploitation suporters and urged to attend.
“There are desperately serious problems facing elderly constituents about service charges and the systems of redress,” said Spelman, who has asked LKP for a dossier of information on the fraught issue of retirement leasehold.
The meeting was also addressed by veteran leasehold campaigner Baroness Gardner of Parkes, who is raising the issue of commonhold and the need to build more of it in the Lords on November 19.
“Being born Australian and owning a flat there I know full well that commonhold is a far less complicated form of property tenure, and less susceptible to abusive practices,” she said.
As well as a meeting with the Housing Minister, Sir Peter is also to seek a meeting with officials in both the Department of Communities and Local Government and the Ministry of Justice. Responsibility for the much criticised Leasehold Valuation tribunal system is to pass back to the Ministry of Justice next year.
No civil servant from DCLG at meeting
Although invited, no officials of the DCLG attended the LKP meeting. However, two did find time to attend the annual conference of the trade body the Association of Residential Managing Agents (ARMA) last month. It is headed by former DCLG civil servant Michelle Banks.
Sir Peter said that officials in both departments must meet and listen to the complaints about leasehold, which have been directed to LKP /Campaign against Retirement Leasehold Exploitation.
Many MPs and Lords had direct experience of leasehold sharp practices in their constituencies, and LKP will be reporting on the leads established at the meeting.
Robert Plumb, the CEP of HML Holdings plc, which manages 33,500 residential properties, was able to give the MPs direct insight into the problems of the sector – and the urgent need to regulate it properly.
Baroness Greengross, the president of the Association of Residential House Managers, who in the Lords debate in April dismissed complaining pensioners as “barrack-room lawyers” with too much time on their hands, said nothing.
LKP director Sebastian O’Kelly cautioned the MPs to ignore the self-interested calls within the sector for mediation as a means of resolving leasehold disputes.
“Mediation has at its heart this complicit deal: the freeholder knows you know you have been cheated, but you will keep quiet about it if he stops. It sets no precedent, it is not public, it helps no one else. The leasehold industry is very partial to mediation as a remedy, and the reasons are obvious enough.
“Even worse is the suggestion that mediation be a compulsory first step before an LVT action.”
Baroness Gardner echoed this sentiment, saying mediation was a waste of time in major leasehold disputes.
Martin Boyd, of LKP , who masterminded the meeting, outlined the legislative and judicial reforms in leasehold that are urgently required.
Thanks were expressed to both Chris Paterson, of the liberal centrist think tank CentreForum, and Steve O’Connell, a Conservative member of the London Assembly, whose reports were published earlier this year.
The CentreForum report was funded by Lord Alliance, who was also at the meeting.
Investors hold far too much power in relation to the amount of money they invest in the freehold.
Charges for insurance are invariably inflated and freeholders commonly ride roughshod over lease conditions, using loopholes to ensure they can claim maximum charges.
In my own case, the freeholder employs himself as a sole trader managing agent in an unlimited company to ensure that the 10 per cent admin charge stated in the lease can be converted to 110 per cent admin charge as the freeholder “employs” a managing agent.
The freeholder has also demanded a premium of £8,000 plus costs to add 25 years to the lease for a flat which is worth £90,000. He also wanted a ground rent of £250pa doubling every 25 years.
Not bad for a £16,000 investment in 2009!
Tribunals to fight for your rights are time consuming, expensive and demoralising and you are at the freeholder’s mercy in terms of extra charges levied and poor maintenance. The unregulated nature of freeholders and managing agents is wide open to abuse as it stands, and this does nothing to support people on low incomes to enter the housing market.