– Select Committee deluged with complaints about taxpayer funded organisation
– It failed to alert government to scandals over ground rents and proliferation of leasehold houses
– Why did it hold seminars advising freeholders how to exploit leaseholders?
– ‘Huge credibility problem’ for LEASE among leaseholders, says MP: it is working against them
– Why is it the monopoly government-funded advisory body?
The Leasehold Advisory Service was eviscerated by the Select Committee on Monday, as part of its inquiry into the leasehold scandals.
Questions faced by chief executive Anthony Essien included whether it should continue as the monopoly-funded government advisory service in the leasehold sector.
The Select Committee hearing can be viewed here:
Parliamentlive.tv
Housing, Communities and Local Government Committee
MPs also raised the issue of the Leasehold Advisory Service hosting seminars for freeholders on how they could make more money out of leaseholders – who the service was supposed to be protecting.
Its inaction over the doubling ground rent and leasehold houses scandals, now being addressed by government, was also questioned.
The taxpayer-funded body was the subject of numerous leaseholder complaints sent to the Select Committee as part of its consultation.
The widespread evidence of dissatisfaction with the public-funded quango, which costs £2 million a year, inevitably raises questions about its future.
The Select Committee had already heard serious allegations by witnesses at the hearing on November 5, where LKP patron MPs Sir Peter Bottomley and Jim Fitzpatrick expressed their “disappointment”.
Martin Boyd, LKP chair, had told the committee: “LEASE has been a monopoly service for far, far too long and it has done huge damage to the sector.”
Yesterday Helen Hayes, Labour MP for Dulwich and West Norwood, raised with Mr Essien “some pretty damning criticism of LEASE itself and the services that leaseholders receive from your organisation”.
She added: “One said the service they received was ‘honestly, quite appalling’.”
Mr Essien replied that “Anyone who says they are dissatisfied with the service first and foremost that would concern me greatly.”
Miss Hayes asked:
“Should the funding that you receive be distributed across a range of organisations so that leaseholders have a choice of organisations where they can go for advice?”
Mr Essien replied: “That is a matter for government completely. We want to grow other organisations, whether funded by government or not, to help leaseholders.
“We have had a robust meeting with the APPG and the Leasehold Knowledge Partnership, where they expressed their views about what we are doing. I want to meet with them again so that we can progress our relationship so we can see how we can progress things for leaseholders.”
[NOTE: The relationship between LKP and the Leasehold Advisory Service has been appalling: one former chairman – apparently a serial quango-crat – threatened the charity with defamation, with another resigned after LKP revealed conflicts of interests with monetisers in the sector.]
Mr Essien also referenced Katie Kendrick, co-founder of the National Leasehold Campaign, who “was kind enough to say at the last APPG that she was willing to meet me in the New Year”.
This is very generous of the NLC, which has refused to meet the Leasehold Advisory Service in the past.
On November 5, Miss Kendrick told the Select Committee:
“The campaigners feel that LEASE has been fully aware of what has gone on for several years. They have advised on the law, but we all know that the law is broken in this area.
“… they have done very little to present it in front of Government, to be honest. I feel that that was the job of LEASE, to see trends and to see where the law is broken, and to advise. If it was not for LKP and the like highlighting this issue, I feel they would have been looking the other way for even longer … We have lost faith in them, to be honest.”
Jo Darbyshire, also an NLC co-founder and LKP trustee, added: “There is a huge credibility problem with LEASE among leaseholders … It then ended up in that bizarre situation where it was running paid conferences for freeholders, advising them how to maximise income from leaseholders. It is just nonsense.”
Shula Rich, a veteran leaseholder activist who runs the Brighton Leaseholders Association, told the meeting of November 5: “LEASE was just one body that was supposed to be financed … We wrote asking for funds and we were then told that the funds were confined only to LEASE, which means that LEASE is seen as a representative of leaseholders, when, in fact, it is staffed entirely by professionals.
“LEASE should not represent leaseholders, and the funds should certainly be more spread out.”
Tanmanjeet Singh Dhesi, Labour MP for Slough, yesterday told Mr Essien: “LEASE has had very mixed reviews from the evidence that we have received.
“There is a huge credibility problem with LEASE among leaseholders. With, in effect, that LEASE was working against them. So what is going wrong and how can you address that?
Mr Essien replied: “That is very concerning indeed.”
He added: “Until Febriuary 2017, our role was to advise everybody in the sector whether lessees, landlords … and that is what we did. That is at an end. Our focus since then has been on leaseholders and park home owners completely.”
Mr Essien is referring to the annual conference of the Leasehold Advisory Service attended by enthusiastic commercialising attendees such as Martin Paine: a freehold owning game player who lands ordinary families with £8,000 a year ground rents and who has been called a “crook” in the House of Commons.
The conference was a disaster for the Leasehold Advisory Service, with then housing minister Gavin Barwell telling it to “be unequivocally on the side of leaseholders” and Sir Peter Bottomley telling the sector insiders present: “if I fail to insult anyone, I will come back next year and try harder”.
Housing minister says LEASE must be on the side of leaseholders, and promises more money
Martin Paine ‘is a crook who is turning sleaze in leases into an art form’, MPs told
Mr Dhesi asked about the Leasehold Advisory Service running seminars on how to draft leases to maximise the income for freeholders. “That is in direct contradiction of what LEASE would be about,” he said.
Mr Essien replied: “That is very regrettable indeed. It doesn’t reflect in any way the nature of our service.”
Miss Hayes noted that the Leasehold Advisory Service was “slow to raise onerous ground rents and that other organisations did the most to bring this to public attention and support leaseholders. When did LEASE first raise these concerns?
Mr Essien replied: “After LKP and other bodies certainly. The focus of our services has been on the provision of advice … ”
Clive Betts, Labour MP for Sheffield Attercliffe, noted that the Leasehold Advisory Service’s role had gone “from being a recipient of complaints to a champion of change?”
Mr Essien replied: “We cannot just provide technical advice we have to get our data out there. Be there for leaseholders and be their champion.”
Mr Betts: “Have you brought in staff to do that?”
Mr Essien: “We do not have new staff, no.”
Mr Betts also asked Mr Essien to define what he considered an onerous ground rent
Mr Essien replied that while RICS states that above 0.25% is an onerous ground rent, his view was anything above 0.1% was onerous.
Mr Betts asked: “That is a clear view from your organisation is it?”
“Yes,” replied Mr Essien. If it increases beyond that with regular reviews it is “punishing”.
“Punishing?” asked Mr Betts. “That is a new definition. We have not heard that one before.”
Mr Essien also expressed the view that if freeholders of doubling and onerous ground rents “do not do something about these leases, government should intervene”. He emphasised it should do so with existing leases.
Related posts:
Sucking a lemon, the Leasehold Advisory Service notes the ground rent Act – which it did absolutely nothing to assist
Communities Select Committee MPs issue devastating report into the toxic leasehold system
CMA’s devastating report on leasehold mis-selling echoes the Communities Select Committee, says Clive Betts MP
March 23: Cladding showdown begins, with Communities Select Committee questioning Tchenguiz group … and LKP
Leasehold Advisory Service has ‘been under review’ for 10 years. Here are the findings …
‘The time is right for commonhold,’ announces Law Commission. (Pity the government doesn’t agree …)
Mr Essien asked to speak to me at the end of the APPG last week.. I was in fact speaking to someone else at the time and he asked if he could interrupt briefly. He said “Katie, can we please meet in the new year, I can come to you”. I said “yes Anthony, I will email you to arrange”. That was it, that was the entire conversation we had.
Meeting with LEASE has never been at the top of my list of “things to do”. I have never had a desire to meet with the organisation I believe chose to turn it’s back on leaseholders a long time ago. I do firmly believe LEASE are very much part of the problem, they have nothing to protect Leaseholders. They have failed in their role. However, I also thought it would do no harm to meet with them to see what they had to say.
However after watching Mr Essien’s evidence to the Select Committee Inquiry on Monday I am very disappointed and feel that his offer of “meeting with me” was nothing more than a tick box exercise so he could use it within his evidence to the Select Committee to portray that he was meeting with other leasehold organisations.
I have attended every APPG meeting for the past 2 years, as has Mr Essien. Never has he made any attempt to speak to me at any of these meetings. His timing last week was pertinent
I am seriously reconsidering meeting with Mr Essien in the New Year. I will speak to the other leaders of the NLC to discuss if this is something we think would be worthwhile for leaseholders or not.
Katie, I did find useful info on the LEASE website, when working out a strategy to get our freehold reversion back in 2013. Their case notes gave me ONE idea, that worked, combined with a few others, at a time when lawyers could not help very much. I wouldn’t write them off.
What Sussex, “you would not write them off” and they gave you just ONE idea, ha ha.
IF LEASE was a Private Company their management would have been imprisoned ages ago for major fraud. offences.
LKP does a trillion times more to help leaseholders for free than LEASE has and ever will do.
Two million pounds a year of tax payers money down the pan, totally wasted paying a few arrogant chaps crazy money for nothing.
The type of answers Essien gave were an insult and still the committee let him get away with them
LEASE should be closed down today, and no leaseholder would be any worse off.
Katie K, I hope you have been able to tell the committee details of the “true conversation” you had with Essien.
Katie, having followed a need for Leasehold Reform since 2008 when Peverel Retirement now Firstport Retirement was Price Fixing/Tender Rigging and also working in hand with their own Insurance Company, Kingsborough Insurance Services Ltd now Firstport Insurance Ltd.
A claim was denied by the Area Manager, benefiting Kingsborough, with leaseholders picking up the bill. For LEASE to now want to meet can be seen as a photo call and not of any real use for the leaseholder but do meet and report back.
When one looks back to the QUANGOS that were in place such as:-
Serious Fraud Office (SFO)
They were sent an email in 2009 regarding the potential of Price Fixing that eventually netted Peverel Retirement, £1.4 million pound. The SFO did not considered serious enough so passed it on to Office of Fair Trading (OFT). This Investigation took 3 years even though Peverel pleaded guilty and were let of, no one fined or jailed, now replaced as not fit for purpose.
We had the Leasehold Valuation Tribunal (LVT) now First Tier Tribunal (FTT) who was supposed to be user friendly. We are aware it allows the RICS – Chartered Surveyor as Chair, who allow the Freeholder/Landlord to use barristers up against leaseholders not very fair. Costs have been awarded even if the Freeholder/Landlord loose the leaseholder has had to pay for their costs, not very fair.
Peverel set up Association of Residential Managing Agents (ARMA) who are a Trade Organisation and toothless being paid by the MA to look after them.
Other QUANGOS also introduced to help the leaseholder such as LEASE who made money providing Freeholders/Landlords with ways to increase their profits by scamming Service Charges and Insurance Commissions, not very fair or lawful?
We as Retirement Leaseholders have now – About Firstport – Better Retirement Housing – LKP and now National Leasehold Campagn. These websites do wonders with little financial support from the government as LEASE receives £2million pounds a year to thwart us when they should of helped us.
I’m not convinced that LEASE can come back to be Leaseholder champions when they have consistently failed leaseholders in the past. Ez-Chair Roger Southam’s Radio 4 interview was damning where he claimed it wasn’t LEASE’s job to raise the leasehold scandal with the Government!!
For LEASE to transform it needs leaseholders in leadership roles in the organisation and yet when I applied for the Chair role that was advertised recently I was told that I didn’t have the necessary experience of transformation. This is a nonsense response as I’ve managed multi-million pound transformations throughout my professional career.
Actions speak louder than words. Top down change at LEASE is needed and Government must fund organisations that have shown themselves to be true Leaseholder champions; organisations like LKP.
I note comments made by Anthony Essien make reference to onerous ground rents being “No fault of leaseholders” and “Changing valuation valuations for enfranchisement”
So if the lease position is that onerous ground rents are not the fault of leaseholders it must follow that dangerous cladding is not the fault of leaseholders either?
And when he refers to changing valuations for enfranchisement would that be the enfranchisement values as worked out by Roger Southam formerly of Lease?
Jo,
I’m not convinced either as they consistently failed leaseholders in the past. As for the ex Lease Chairman Roger Southam it was more than damning when he claimed it wasn’t LEASE’s job to raise the Leasehold Scandal with the Government it began the beginning of the end, he didn’t go quietly.
Did you have an interview for LEASE, and do you know who was appointed in his place?
The need for leaseholders information can be found on this website along with About Firstport and Better Retirement Housing.
Seen as LKP is a Charity and many of us support them, we between us could offer advice at a fraction of the cost and not be in bed with Freeholders or Landlords.
Actions does speak louder than words, so lets begin a campaign to have LKP funded and helpers can provide assistants.
The NLC has evidence from its members of poor advice at best and totally incorrect advice at worst from LEASE. Although it’s website does contain some useful information, answers to direct telephone questions by LEASE advisors have left a lot to be desired.
Add to this their reputation of favouring freehold investors it’s not surprising leaseholders and NLC are unhappy.
Having said all of that Mr Essien has offered an olive branch of sorts (? Under duress) and provided an opportunity for us to meet. If we refuse we may miss the chance to find out what LEASE has to offer the NLC now it is “under new management “ .
What the NLC can offer LEASE is a comprehensive outline of the leaseholder viewpoint on leasehold abuses currently in force. We can advise LEASE on what we believe their role should and should not be based upon two years of campaigning and listening to 12,500 members.
I hope that the much needed overhaul of LEASE takes place very soon and that NLC is a key stakeholder in that process.
Michael
Comments made by Anthony Essien referencing onerous ground rents being “No fault of leaseholders” and “Changing Valuation Valuations for enfranchisement”.
It does follow, Dangerous Cladding is not the fault of leaseholders as they play no part in the contract to carryout these claddings, then how can a Lease have thought up that faulty Dangerous Cladding works that was undertaken by the Freehold/Landlord, who then takes no responsibility shows the fickle thinking, oh yes, we will say the Leaseholder will pay as we wrote this into the lease, I Don’t Think So.
Please explain the Enfranchisement Values as worked out by Roger Southam formerly of LEASE.
Fondly remember ringing Lease back in the LVT days for advice.
Little they said bore relation to actual experience of applying to one of those farcical tribunals.
Like others I drifted into sharing non lawyer voluntary personal experiences to other leaseholders for too many years, to try to help fill the yawning gap I’d found. Stopped for sanity sake as whole system is broken. Only advice left was, Get out of leasehold – try to sell the hassle to another unwitting sucker.
Sadly the publicity now is probably making even that cunning plan hard.
Even forming a “Dad’s Army ” company won’t help because you can’t get or keep competent directors for long, if at all.
Amazing how little leaseholders can know of their rights, even just how to exercise basic legal powers when their own RMC or RTM is highjacked. Sometimes by other leaseholders. Often by agents.
Shark filled sea.
Never understood self how a government funded advice service couldn’t host a high profile advice forum – even allowing for the litigious-happy professionals who pounce on anything out in the open.
Not everybody uses Facebook groups, what with all the privacy scandals.
Somebody should set up a high profileleaseholder advice forum for shared knowledge on facts rather than theoretical “rights”.
Didn’t somebody plan this here about?
This information is for all the people working at LEASE including Mr Essen and legal advisors :
The UK Government Tax Revenue for 2019 comes from :
Income tax 33%
National Insurance 18%
Business Taxes 7%
Indirect Taxes ( VAT etc) 42%.
Leaseholders pay income tax at 20% and 40% and 45% on earnings.
Freeholder companies pay corporation tax at 19% on profit AFTER deducting loan interest from the ground rent income and so pay very little tax contribution to the Tax Office.
So make sure your Tribunal and Court Judges understands who pays the taxes for upkeep of Parliament and the County Courts system , FTT and UTT etc.
Many of the freeholder companies don’t any tax.
We want the Directors of the Freehold Company , and the Mortgage Lenders and Commissioner for HMRC to attend the FTT hearings and explain why they are exploiting the leaseholders.
As I have shown . the Government’s tax revenue comes from :
Leaseholders contributing to 33% tax on income + 18% on NI + 42% on indirect tax ( VAT etc )
Freeholders ( operating as a company ) pays little tax. ( on profit after deducting interest at 19% ).
Grant Schapps , when as Housing Minister claim it was necessary to “seek the best balance” between freeholder and leaseholder, he failed to to realise most of the MP’s pay was funded by tax paid by the leaseholders.
Even the Government funding for LEASE and FTT comes from taxes paid by Leaseholders.
This means Mr Essien at LEASE should be working to support the leaseholders side and bring an end to ground rent collection.
He can start by recommending to Housing Minister :
( 1 ) Forfeiture of lease proceedings to be abolished.
( 2 ) Payment of annual ground rent to cease after 21 years.
( 3 ) Statutory 90 years lease extension at peppercorn ground rent to cost a nominal £500.
( 4) Automatic right of leaseholders to become directors of the company owning the freehold of their block of flats.
As I have shown . the UK Government’s tax revenue comes from :
Leaseholders contributing to 33% tax on income + 42% on indirect tax ( VAT etc )
Freeholders ( constituted as a company ) pays little tax. ( not much profit after deducting loan interest ).
So the major part of funding for LEASE and FTT/UTT comes from taxes paid by Leaseholders.
This means Mr Essien at LEASE should be working to support the leaseholders side and bring an end to the leasehold system. He can start by recommending to Housing Minister :
( 1 ) Forfeiture of lease proceedings to be withdrawn from current legislation .
( 2 ) Gross ground rent income to taxed at 40% ( loan interest NOT deductable as an expense ) .
( 3 ) Statutory 90 years lease extension at peppercorn ground rent to cost NIL or nominal £500.
( 4) Automatic right for leaseholders to become directors of the company owning the freehold of their block of flats.
Despite an increase from £960,000 to £1,210,000 in the Government grant the Leasehold Advisory Service made a loss of £71,000 last year.
These losses were compounded by a dramatic drop in income from training and conferences that fell from £310,000 down to a mere £27,000.
This serves to highlight as to just how dependent the “independent” Leasehold Advisory Service was reliant on income derived from those whose vested interests were diametrically opposed to those of leaseholders.
By coincidence the £71,000 loss almost exactly matches the annual salary of Mr Essien.
Michael,
It goes to show the increase of £960k to £1.2 million pounds in Government Grant a 20% increase made no difference at all. The Government use these departments as Feelers that feed back information so they are kept in the loop over what is a problem they need to look into.
FLEASE along with all those 7 recent Housing Ministers, failed to pass on information and problems now facing Leasehold Reform, or if having passed on the info, Governments ignored it.
Remember, Select Committee have seen so many complaints regarding many of the Taxpayer Funded Organisation from:-
1. The Office of Fair Trading (OFT) after the Price Fixing Scandal 2005/2009 were closed down.
2. Serious Fraud Office – Arrested Tchenguiz Brothers on false information 2012, and then paid them millions for false arrest.
3. FLEASE made money by arranging seminars how to Maximise Service Charges with Freeholders and also how to Maximise Commissions from Insurance Premiums.
LEASE a Monopoly, and a Government Funded Advisory Body – advised Freeholders on how to exploit Retirement Leaseholders. It failed to inform Government over Doubling Ground Rents and proliferation of leasehold houses, along with Estate Management who charge excessive fees for works that are not required or not carried out or undertaken poorly,
Roger Southam FLEASE CEO, was forced to resign, after stating it was not the responsibility of FLEASE to inform Government of problems.
The drop from £310k to £27k from training says it all, as without the money made by arranging seminars for the Freeholders they will not survive. No wonder it has been renamed FLEASE as this is what has occurred ever since I first contacted them. It has like all Government Bodies that are underfunded and therefore loose its direction.
The underlying problem as I found in my case is that these issues of bias and wiful ignorance go to the root of democracy. Not only all the way up, as many say to a latterday aristocracy that wields overwhelming financial power, but sadly all the way down as well, to what should be grass roots democracy.
My own case achieved a court order against a borough council supposedly ‘controlled’ by good Labour councillors. They had no control. All went hush-hush. Same ever since. Campaigners write about this secrecy on a number of local issues. FOI requests are the only way to get realistic debate, but often too late due due to appeals and protracted delays in the Information Commission process.
I could go on at length, but suffice it to mention a number of bodies and regulators that routinely fail or themselves defraud homebuyers, largely controlled by biased lawyers who support each other: Borough Councils, (County Council) Trading Standards, Land Registry, Local Government Ombudsman, SRA, Police, Action Fraud, DPP, and of course the UK and EU parliaments themselves with their various ever-failing ministries.
Pardon my cynicism, but why would LEASE (or a proposed successor, down the line) be any different? In a country that tells disabled people they are not disabled, how are we to discipline lying, biased or ignorant officialdom more effectively?
A new Housing Regulator with NLC and LKP lay assessors might help. And a new more effective citizen’s charter to tackle public bodies that routinely reject whole classes of complaint.
The LGO for instance, will not consider anything remotely to with a lease, saying leases are only for a court of law. So why then make you go through this timewasting year-long phony complaints process, as required, effectively, under Court Procedure Rules? Having a laugh, like many of our MPs, MEPs, and PCCs, Waste of money having Parliament, if no-one will enforce its laws.
I would add that our small estate has no Section 5 or other protection, because the homes were built ‘for resale’, not as social housing. Our freehold was sold as a ‘Ground Rent’ at auction (actually the day after the auction) to a ‘lawyer’ of sorts.
No genuine buyer would want it, because our estate costs money to upkeep, as with other local pavements and roads, except ours is theoretically ‘private’.
In other respects our freehold sale was similar to the Bellway and other cases, where the freehold changes hands and then you find the expected terms have changed.
My view is that ‘Ground Rent’ sales would be legitimate if that’s all they were, but that surrounding pretences are unlawful: Community land and contractual obligations cannot honestly be regarded as ‘sold’ in that way – not without lessee involvement and consent, regardless of s. 151 of the LPA.
Problem is, you don’t get to the High Court with your argument, because in strong cases like mine, the Defence gives in to all demands on the first day in court, then pretends it was just a slight technical error in the conveyance.
It is massive long-winded con by those with more money and power, as with so many aspects of leasehold. Utterly sick when they use our own tax monies willy-nilly to defeat us.