Secretariat of the All Party Parliamentary Group on leasehold reform

LEASE: what’s the point?

Katie Kendrick gets Rightmove to include full leasehold listings, while LEASE does nothing (as usual)

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Rightmove is to include full information about leasehold properties offered for sale on the on-line estate agency portal after pressure from Katie Kendrick, co-founder of the National Leasehold Campaign.

Hitting reverse gear by Rightmove is a considerable victory and a direct result of the actions of Miss Kendrick, who is also a trustee of the Leasehold Knowledge Partnership.

National Leasehold Campaign
MPs supporting ripped-off leaseholders: Justin Madders and National Leasehold Campaign founders Katie Kendrick, Joanne Darbyshire and Cath Williams, with front bench shadow housing secretary John Healey. The photo was taken at a demonstration at Westminster in the summer

This response contrasts with the government-funded Leasehold Advisory Service, which had simply offered some consumer advice on leasehold to the portal but made no effort at all to have proper leasehold listings included.

https://www.rightmove.co.uk/news/articles/industry-news/what-is-a-leasehold-and-advice-on-leaseholds

“Rightmove has now told activists that the National Trading Standards Estate and Letting Agency Team (NTSEALT) is working on a list of “material information” that must be included on a property listing.

“An email from Rightmove to the Leasehold Knowledge Partnership, National Leasehold Campaign and members of the All Party Parliamentary Group on Leasehold Reform and Commonhold Reform, seen by EYE, said: “We are in contact with NTSEALT who are currently working on a list of material information that must be included in a property listing based on latest guidance available.

“As soon as we have this we will review any changes that need to be made and will be communicating with all of our agent customers.”

Industry regulator working on list of information that agents MUST include in listings

The industry regulator is set to tell agents what they must include in leasehold property listings. Campaigners have been urging Rightmove to make it mandatory for agents to include tenure terms on their listings rather than just offering it as an option.

“The Property Ombudsman has already warned that agents who don’t divulge tenure terms are in breach of the Consumer Protection from Unfair Trading Regulations.”

Wanda Goldwag: You owe an apology. You know it. And it is overdue

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Bottomley and Fitzpatrick defend LKP in Commons and insist on co-operation with Leasehold Advisory Service

Wanda Goldwag, chair of the Leasehold Advisory Service, launched a vituperative attack on LKP chair Martin Boyd, swearing at him and accusing him of bullying LEASE staff. The evidence for this appears to be a few tweets (below)

Commons debate, July 11 2019

By Sebastian O’Kelly

Some of the contributions to the Commons leasehold debate on July 11 of both Sir Peter Bottomley and Jim Fitzpatrick would have been lost on almost everyone in the chamber, but not the housing minister.

Heather Wheeler would have been aware of a disastrous meeting on April 25 between Wanda Goldwag, the interim chair of the Leasehold Advisory Service, and Sir Peter, myself and Martin Boyd of LKP, and Joanne Darbyshire, of the National Leasehold Campaign.

What was supposed to be an attempt to co-operate more closely – to share tribunal case information was my hope – turned into a swearing, vituperative attack on Martin, as well as more generally on LKP.

It prompted Martin to offer to resign from LKP – declined – and a written formal complaint by me to the Secretary of State and permanent secretary at MHCLG saying an apology was due.

Meeting at Portcullis House

This was supposed to be a semi-formal meeting at Portcullis House, the MPs’ offices at Westminster, to which Joanne Darbyshire had travelled from Bolton.

Wanda Goldwag ignored the agenda to which she had contributed and instead accused Martin of:

“targeting” individual members of the LEASE staff;

said that some had become so distressed that they have cried in meetings with her;

that the modestly paid staff operate in a regime of anxiety in the belief that LKP, and / or Martin might initiate test phone calls to check on the quality of the advice they give out;

and that the distress was so bad that a counselling policy has had to be introduced.

The only evidence offered for this was a series of tweets (below), none of them going beyond criticisms of LEASE that have long been published on this website.

Alone of all participants Wanda Goldwag deployed swearing, once directly at Mr Boyd: who for many years has been the unpaid, volunteer chair of our charity, while Ms Goldwag, a former BA air miles marketing executive, is a career quangocrat with public earnings (we estimate) of around £150,000 a year.

It was an ugly scene, which shocked all who attended the meeting.

Twice I had to urge Wanda Goldwag to behave with more self-discipline, and immediately after the meeting I wrote to her suggesting she reconsider her conduct.

MPs raise the incident in the Commons

It was this unfortunate bust-up that explains why Jim Fitzpatrick asked the minister:

“when the APPG’s officers might receive a response to our request for an apology to our secretariat”.

Sir Peter told the debate on July 11:

“We have to realise that until we can get LKP to be respected by the present chair of LEASE we will only get half as far as we can, because while that sore is still there the Government cannot expect to get the full benefit that LEASE should give and that LKP is trying to give.

“I make this suggestion, which is not for the Minister to answer today. Invite—and if she will not do it, instruct—the chair of LEASE to invite the chair of the Leasehold Knowledge Partnership to come to the LEASE office, and meet the LEASE staff. If there are problems, they can then be resolved quietly, and we will know that we can go on co-operating. That seems the simplest way of dealing with that problem.”

I have no idea what were the motives of Wanda Goldwag to behave in the way she did.

It has been suggested by one of those present that she may have been jealous of Martin Boyd, who is well informed and widely respected among those attempting to reform the sector. 

It may have been an attempt to provoke a rift between LKP and its MP supporters. In which case it was a catastrophic misjudgement of both us and Sir Peter, who has seen off operators of more consequence than Wanda Goldwag.

The best interpretation that can be said about it was that Wanda Goldwag was speaking up for the staff of the Leasehold Advisory Service who, she felt, were being wronged by LKP’s criticisms.

This would have been more persuasive if Wanda Goldwag actually knew who they were: the name of the services’s respected senior solicitor was unknown to her.

LKP argues that the Leasehold Advisory Service should be closed

LKP accepts that it has been strongly critical of the Leasehold Advisory Service – we argue that it should be closed down and its resources better deployed among different voluntary organisations.

We do not believe that a government quango should swim in these shark infested waters.

We accept that this conclusion may be demoralising for the service’s staff.

But leaving aside the organisation’s succession of dud chairs – of her predecessors, one was not reappointed and another resigned because of his track record serving the interests of freehold investors – we have never criticised the LEASE staff nor have we identified them.

Our criticisms are forcible, but they are not out of line with the conclusions of other organisations.

Former housing minister, Select Committee, London mayor’s office and National Leasehold Campaign also critical of LEASE

The Communities Select Committee reported that leaseholders found the taxpayer-funded service “appalling” and working for the commercial interests in the sector not leaseholders. These criticisms were put to the LEASE chief executive Anthony Essien: the only witness at the Select Committee who was questioned alone.

The London mayor’s office has declared the Leasehold Advisory Service “not fit for purpose”, and has published its own advice to leaseholders.

The National Leasehold Campaign has had no dealings with LEASE at all and is also strongly critical.

The vehemence of these criticisms is easy to understand.

The Leasehold Advisory Service has done precisely nothing to bring ministers’ or the wider public’s attention to the various leasehold scandals that are now occupying the efforts of government, Opposition, Parliament and the Law Commission.

Indeed, its former chair of the organisation told the BBC that this was not its job. This is in spite of the quango receiving nearly £2 million in public money.

If there are leasehold reforms, they will most definitely not be because of any effort by LEASE.

It was the then housing minister Gavin Barwell in 2017 who had to tell the Leasehold Advisory Service that it had to be solely on the side of leaseholders.

Martin Paine trained by LEASE

He did this at LEASE’s last annual conferences, a trade show packed with lawyers, freeholders and assorted trade representatives whose incomes and private school fees are ultimately paid for by leaseholders.

One figure present at this conference was the sector game-player Martin Paine, who Sir Peter described in the Commons as a “crook turning the sleaze of leases into an art form”.

It is surely unsurprising that LKP is sharply critical of a taxpayer-funded organisation helping to train such unappetising figures to shaft leaseholders?

In the July 11 debate, Sir Peter was, as ever, generous in his praise for LKP, Martin and myself – and included LKP trustee Bob Bessell, founder of retirement housebuilder Retirement Security.

Bob believes there is no place for ground rents in modern housing, as he has never included them in his leases. In contrast, Wanda Goldwag declined to urge zero ground rents in a BBC R4 You and Yours interview, the policy now of both government and opposition:

New LEASE chair declines to endorse peppercorn ground rents on BBC

But in an unusual departure, Sir Peter also thanked Martin’s wife, Lynn.

She is livid and indignant that her husband has had his character trashed in a meeting with Wanda Goldwag.

For years she has put up with him working ludicrous hours, unpaid, for the Leasehold Knowledge Partnership in this peculiar, not entirely rational endeavour that both he and I have set in train.

He has done so out of a sense of social duty, sharing the knowledge he has acquired steering Charter Quay – a £250 million riverside mixed-use site at Kingston, Surrey – into enfranchised self-governance.

That has been invaluable to thousands of leaseholders.

LKP has saved leaseholders millions of pounds – FirstPort collusive tendering; Taylor Wimpey’s £130m; £200m for Grenfell cladding removal: would they have happened without LKP?. We have also taken up numerous individual cases of hardship, resulting in either success or at least the avoidance of disaster, forfeiture and ruin.

The division of our labours is vague, but Martin is primarily responsible for the revived interest in commonhold.

And the two Westminster meetings – the only two anyone has bothered to organise – for leaseholders caught up in the Grenfell cladding disaster were initiated by him.

The only reward for him in all this is seeing the efforts of LKP result in public and political awareness of scandals and injustices, and legislative efforts to put things right.

My complaint to the department has not been seriously considered, and indeed the senior civil servant who responded attempted a smear in the circulated correspondence by suggesting LKP should moderate its “unfair” criticism of the Leasehold Advisory Service.

Fortunately, MPs are intending to debate the quango in Parliament in the autumn. This can only be a good thing as it requires further scrutiny and then others can decide whether this is fair or not.

Wanda Goldwag, for whatever motive, acted very badly.

She knows it, and should apologise and it should not have taken since April for her to do so.

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Government’s slightly wobbly response to the excellent report of the Communities Select Committee

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By Sebastian O’Kelly

The government’s engagement with leasehold abuses is revealed in a lurching, one-step-forward and one-step-back reaction to the Communities Select Committee’s excellent critique of the sector, published today.

There are some good things, such as “unfair practices in the leasehold market that can turn people’s home ownership dreams into a nightmare”.

That’s true for starters.

Leasehold houses are to be banned – is this the third time that that has been promised? –  but the government aims to:

“ensure that consumers only pay for the services they receive, and that people’s homes are theirs to live in and enjoy, not designed as an income stream for third party investors, by restricting ground rents on newly established leases to a peppercorn (zero financial value).”

Communities Select Committee MPs issue devastating report into the toxic leasehold system

Hurrah! Committing to zero ground rents is excellent. Well done, Mr Brokenshire; well done officials at the MHCLG for getting this right.

It will also clamp down on “unjustified legal costs” faced by leaseholders in the tribunal.

“The Government is pleased to see that many of the recommendations made by the Committee align with the Government’s existing reform programme.” That is, reforms “as soon as parliamentary time allows”.

This is a bit fuzzy, and problematical given that landlords can get their legal costs under the lease, but worse unfortunately …

The government still thinks that leasehold is a legitimate form of home ownership while, contrariwise, saying it is “a type of long-term tenancy; it is not the same as outright ownership”.

So, which is it? There is no scope for schmoozing both ways on this.

The adoption of the term “lease rental”, which the Select Committee urges …

“could risk perpetuating a misconception that they are not truly homeowners. It also risks undermining future sales of leasehold properties for existing owners”.

Er … well, the Select Committee does not think that this is a misconception at all.

Besides, isn’t it the case that any reform of leasehold, by acknowledging that there is a problem, potentially undermines the value of these assets? However, nothing undermines them quite as much as the games freeholders play to monetise these assets whilst unreformed. So, what to do?

Leaseholders are home owners when it comes to the selling of these long tenancies; but tenants when it comes to paying any bills, and woe betide if they fail to do so.

Commonhold is an alternative, and government says it “supports the increased use of commonhold and wants to see more commonhold developments”. Which is good-ish.

But commonhold is being considered by the Law Commission, so government gets out of thinking too deeply about this one at this stage.

The government also addresses the mis-selling scandal that has dumped 100,000 home buyers into unsellable homes, but it has passed the problem on to the Competition and Markets Authority. It will now wait on events.

On the issue of whether developer recommended solicitors dobbed their supposed customers, the home buyers, into the mess of doubling ground rents etc, the government goes all coy:

“We note that recommendations regarding firms providing particular services e.g. conveyancers can sometimes be helpful where consumers are unfamiliar with the legal process, however consumers must have confidence that advice provided is made in their best interest.”

So, nothing really.

The Select Committee urged action on behalf of those duped into buying these toxic assets, but there is little here for them.

On lease forfeiture, the government is a bit hesitant even though there is a Law Commission recommendation to remove this nuclear weapon from the hands of often quite spivvy freehold owners:

“Changes to forfeiture will require a careful balancing of the rights and responsibilities of landlords and leaseholders. Any changes will also require primary legislation. As a first step, we have asked the Law Commission to update their 2006 report, given the passage of time, and to take into account the implications of the reforms currently underway.”

So, that’s a fail for LKP, which has given a number of examples over the years where leaseholders have lost their homes for trivial reasons to the landlord.

Regulating freeholders? This surely a red herring. How do you regulate an entity offshore where the beneficial ownership is hidden?

Then we get to a weirdly unbalanced defence of the Leasehold Advisory Service, which was humiliated by the Select Committee (and declared unfit for purpose by the London mayor’s office).

The Communities Select Committee expressed the view that:

“We are concerned that the only government-funded service for leaseholders continues to have such a poor reputation among many leaseholders.”

Its poor reputation is completely justified: the Leasehold Advisory Service did not warn ministers that plc house builders were cheating home buyers with doubling ground rents – the Leasehold Knowledge Partnership did.

There is not one single reform of the leasehold sector currently being considered that has originated from this organisation.

On the other hand, its chief executive felt ground rents of £250 and no more than 0.1 per cent cent were fine.

But far worse is the Leasehold advisory Service’s long history of sucking up to the commercialisers in the sector and serving their interests by  hosting seminars on how to get one over on leaseholders, which is the polar opposite of what the organisation is funded to do.

Here is an example:

LKP welcomes privatisation of the Leasehold Advisory Service, but why wait until 2020?

It is a curious sort of government funded organisation that has to be reminded – repeatedly, apparently – that it is supposed to be on the side of the taxpaying consumers that help fund it, not the entities seeking to rip them off.

Here is a former housing minister telling it off publicly:

Housing minister says LEASE must be on the side of leaseholders, and promises more money

The government rejects the criticism and says that it has appointed a former British Airways marketing executive Wanda Goldwag as interim chair in January 2019 and that she has worked wonders:

“Ms Goldwag’s appointment is pivotal in ensuring that the Leasehold Advisory Service is an effective organisation. She has already had a positive impact and has made it clear that the organisation is on the side of leaseholders and that it only provides support and information to leaseholders and park home residents.”

What utter rubbish.

Ms Goldwag’s only public impact to date has been to decline to endorse zero ground rents on BBC Radio 4 – which the government has just endorsed, so she called that one spectacularly wrong – and to cheer on the government’s wobbly code of practice for freehold owners. Of which, verdict awaiting,

In addition, she has caused offence among leaseholders for her appalling behaviour.

In April she attended a meeting with LKP, the National Leasehold Campaign and the All Party Parliamentary Group on leasehold reform. The aim was to get these voluntary organisations to work more positively with the Leasehold Advisory Service.

Instead, she chose to launch into a foul-mouthed and intemperate attack on LKP in general and the character of its unpaid volunteer chair Martin Boyd.

This is now the subject of a formal complaint to the MHCLG.

The Leasehold Advisory Service does do some good work and has some dedicated officials.

Her appointment is “interim chair”. Let’s hope the “interim” nature of it means that her departure is not unduly postponed.

GovtResponseToSelectCommittee

London mayor Sadiq Khan launches leasehold advice portal and slams LEASE as ‘unfit for purpose’

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London mayor Sadiq Khan has launched a new leasehold advice portal, and has condemned the taxpayer-funded Leasehold Advisory Service as “unfit for purpose”.

He also backed “wholesale reform of leasehold, including a long-term shift toward alternative tenures such as commonhold”.

Today’s statement from the mayor’s office reads:

“Government funds the Leasehold Advisory Service (LEASE) – an advice service for leaseholders in England and Wales – but the Mayor believes ministers have so far failed to ensure it is fit for purpose for a growing sector.

“The Mayor’s guide [to leasehold] acts as an alternative starting point for Londoners seeking information about leasehold, and directs users to seek further, more detailed advice from legal professionals and organisations  specialising in housing and leasehold advice where necessary.”

The mayor’s advice portal is here

The portal references the Leasehold Knowledge Partnership, a registered charity, running the All Party Parliamentary Group (APPG) on leasehold and commonhold reform and which “provides support and advocacy for those experiencing issues with the leasehold tenure”.

The mayor called on ministers to overhaul the system of leasehold for homebuyers in the capital.

An estimated third of London’s homes – and over 90 per cent of new-build housing – are owned on a leasehold basis, with many leaseholders finding it a complex and confusing form of homeownership.

The Mayor has called for wholesale reform of leasehold, including a long-term shift toward alternative tenures such as commonhold.

James Murray, Deputy Mayor for Housing and Residential Development, said: “For too many Londoners being a leaseholder is a complex and confusing legal minefield.

“Beyond the financial commitments, the option of extending a lease or buying a freehold can present real legal and financial challenges for anyone who is not well versed in property law. The Mayor’s new online guide will give London’s leaseholders the basic knowledge they need to understand their rights, and will help them know what to do if they think those rights are being abused.

“The Government has so shown no real ambition to overhaul leasehold, nor to help existing leaseholders with the challenges they face. That’s why the Mayor is urging Government to prioritise legislation to help both new and existing leaseholders, and in the meanwhile we are doing all we can to help leaseholders in the capital with advice and guidance on their rights.”

A recent study by the National Association of Estate Agents found that 94 per cent of leaseholders regretted buying leasehold properties, and 65 per cent would welcome additional information on their rights and responsibilities (National Leaseholder Survey, 2016).

The Mayor believes it is essential that homebuyers are better informed about the obligations and risks involved in purchasing a leasehold property.

The Leasehold Knowledge Partnership applauds the mayor taking the initiative in the face of government inaction.

Sebastian O’Kelly, LKP chief executive, said:

“None of the reforms by government or the Law Commission owe anything at all to the actions of the Leasehold Advisory Service, which should cease to be the monopoly taxpayer-funded advisory body.

“It has sucked up to the vested interests in this sector for years, holding conferences – usually chaired by sector stooges – to further the commercial interests of developers and freehold owners.

“It is an expensive irrelevance, used by government as an excuse for inaction.”

The Leasehold Advisory Service was mauled by the Communities Select Committee last month, which reported that many leaseholders had reported it as “appalling”:

Can the Leasehold Advisory Service monopoly survive devastating questioning by Select Committee?

The Leasehold Advisory Service has a new interim chair, Wanda Goldwag, a former marketing executive of British Airways.

The following in The Times yesterday:

New LEASE chair declines to endorse peppercorn ground rents on BBC

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And there will be no leaseholders on the board of LEASE

Former LEASE chair Roger Southam, who resigned last year, and new incumbent, marketing expert Wanda Goldwag

The new chair of the controversial quango the Leasehold Advisory Service declined an invitation to endorse no-monetary value ground rents on BBC R4’s You and Yours today.

Instead, Wanda Goldwag said only that contracts should be “fair”.

Former Communities Secretary Sajid Javid undertook to reduce to “as low as zero” new ground rents – which Sir Peter Bottomley earlier reminded the programme are for no service whatsoever, and should stop.

The government has since floated the idea of £10 ground rents, and will maintain them in retirement leases.

At present, LEASE’s publicly stated view is that ground rents above 0.1% of sale price are onerous (which, in fact, the vast majority of retirement housing ground rents are).

Sir Peter told You and Yours: “[The Leasehold Advisory Service] is one of the very few organisations that doesn’t put in its annual report things that it is noticing and which government should put right.

“They could advise the government there is no need for a ground rent at all as it buys you nothing and the sooner they go the better.”

You and Yours – Brexit Stockpiling; Leasehold Hope; Ditching Alcohol – BBC Sounds

Catch up on your favourite BBC radio show from your favourite DJ right here, whenever you like. Listen without limits with BBC Sounds.

The call for zero ground rents was echoed by three separate lawyers at the Communities Select Committee last week.

The item also included an interview with leaseholder, Lisa Chapple, who expressed strong criticism of the Leasehold Advisory Service, which costs just under £2 million a year.

“They did not help us at all and I think that they failed on all levels. They advised nothing at all and tried to pass everything back to me and that it was my fault for not raising these issues at the point of sale.

“They did not seem to understand that this [doubling ground rents] was affecting thousands of people.

“I’ve spoken to people on my estate and around the country, where we have had demonstrations, and we do not have any faith in it [Leasehold Advisory Service].

“It appears to be more for investors and freeholders rather than leaseholders.”

Miss Goldwag responded:

“I give my absolute assurance that from now only LEASE will only be acting in the interests of the leaseholders.

“We only have one set of customers, which are the leaseholders.

“It is really worrying that people are being told that it is your fault, and that you should read the lease.”

Sir Peter repeated his calls, over several years now, that leaseholder representatives should be on the board of LEASE.

“I do not believe the LEASE can seriously go on for a long time without having one or two leaseholders on the board, or one to two people who have experience of advising them.

“The idea that you can have a service like LEASE without having anybody who has been through the mill of being a residential leaseholder strikes me as odd.”

Miss Goldwag was asked whether she intended to have anyone directly affected by leasehold on the board.

“No, I don’t,” she replied. “That is not how government bodies work. We have non-execs to make sure that the service is excellent. 

“But I want to say that what Sir Peter Bottomley and his colleagues have done has been excellent … But my job is to ensure that while they campaign I provide the information and data of the trends and issues that people are facing.

Miss Goldwag said that she is eager to share the “every single piece of information that we have collected in the last five years about what people are complaining about” and give it to “government, the civil servants and the very, very good campaigning groups we have in this country”.

You and Yours presenter Peter White asked whether LEASE’S reputation is so tarnished that it would be better for LEASE’s funding to be shared out among charities such as the Leasehold Knowledge Partnership or Citizens Advice. 

“It is not for me to tell government where it should spend its money. What I am going to try to ensure is that the money that LEASE does receive we use very, very effectively.”

Historical footnote: The You and Yours programme also included the astonishing interview with former LEASE chair Roger Southam saying it was not the taxpayer-funded quango’s job to alert ministers to the doubling ground rent / leasehold houses scandal.

Not the job of LEASE to warn ministers of leasehold houses scandal, Roger Southam tells BBC

New interim chair for troubled quango LEASE

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Wanda Goldwag

Wanda Goldwag, a former marketing executive for British Airways, has been appointed interim chair of the controversial Leasehold Advisory Service.

Ms Goldwag, who ran BA’s Air Miles, is chair of the Office for Legal Complaints, which controls the legal ombudsman service for England and Wales.

Four trustees of the Leasehold Knowledge Partnership have been declined membership of the LEASE board.

Minister for Housing and Homelessness, Heather Wheeler MP, said:

“LEASE has an important role in supporting leaseholders and helping them resolve problems, and I am pleased to appoint Wanda Goldwag as chair.

“She will bring a level of expertise and knowledge from her previous roles which will be of real benefit to leaseholders.

“The government is working hard to reform leasehold practices and ensure that the reality of home ownership can live up to the dream for those who purchase a leasehold home.”

Wanda Goldwag, who has been appointed for 18 months, said:

“I am delighted to be able to help LEASE in this time of renewal of the organisation’s aims.

“I hope to ensure that LEASE is the first port of call for leaseholders, potential leaseholders and park home owners in England and Wales and that the organisation provides high quality information and initial advice to lay people.”

The Leasehold Advisory Service was subject to robust criticism when its chief executive Anthony Essien came before the Communities Select Committee in December.

Can the Leasehold Advisory Service monopoly survive devastating questioning by Select Committee?

Leasehold Advisory Service has ‘been under review’ for 10 years. Here are the findings …

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Anthony Essien, chief executive of the Leasehold Advisory Service, faced devastating questioning from MPs on the Communities Select Committee about the failings of his organisation to serve the interests of leaseholders

The Leasehold Advisory Service, the government funded Leasehold Advisory Service, has been under review by the government for much of the last ten years.

This seems to suggest that something is wrong, yet the government’s long-standing support for the Leasehold Advisory Service continues.

LKP has, after many requests, obtained the two most recent reviews of the Leasehold Advisory Service under a freedom of information (FOI) application. Inexplicably, the two reports continue to praise the work of Leasehold Advisory Service. This contrasts starkly with both the submissions by others to the Communities Select Committee and its cross-examination of Leasehold Advisory Service  chief executive, Anthony Essien.

Over the last decade there have been four reviews of Leasehold Advisory Service:

  • A review was scheduled for 2009-2010, but it is not known whether this ever took place.
  • A “red tape review” of LEASE did take place in 2011, but the government now tells us “there is no red tape report”.
  • In the summer of 2014, the government started a Triennial Review of LEASE. Requests for the report were made in 2016 and 2017 and the report has now finally been provided to ourselves and the APPG in December 2018. The report itself records that it was actually completed in February 2016. The FOI response notes that this report (2016 report) is now “out of date”.
  • In 2018 the government undertook a further “Internal review of the advice and support for leaseholders” generally. That report was completed at some point earlier this year. Following our FOI request this report has now also been provided to ourselves and the APPG.

The 2016 report can be read here  Triennial Review

The 2018 report can be read here  Review report

Some key points in the reports

The 2016 report looks only at the role of Leasehold Advisory Service. The 2018 report states that it provides a “holistic” review of wider leaseholder advice.

Both reports include sections of the data from the Leasehold Advisory Service’s annual performance reports but do not question or develop a critical understanding of that data in any detail.

Both reports conclude that the service provided by Leasehold Advisory Service is good with only small caveats about areas for improvement.

2016 Report

Paragraph 21 states, that there are no other organisations “which currently provides a similar, free service” or which have the “capability to deal with complex leasehold issues”. We would clearly not agree as LKP do both. In fact, we deal in more detail with more complex cases than LEASE. Mr Essien told the Communities Select Committee that his organisation does not do casework.

Paragraph 22 implies “partners overwhelmingly supported” LEASE and that “customers trust the advice that LEASE gives and believe it to be impartial and independent”. That does not match the information provided to the review by LKP and the APPG since both “partners” and “customers” raised questions about the role of LEASE and the fact that on occasions they provide poor advice.

Paragraph 27  uncritically accepts the claim that LEASE helps approximately 750,000 customers a year. Approximately 93% of that help is via their website. What the reports do not consider is that the count of unique visitors to a website, used to calculate this figure of 750,000, does not equate to the real number of people visiting the website.

Further, the number of visitors to the website does not equate to customers actually being helped. Using the same measure LKP could claim to help more than 300,000 customers a year.

If there were to be 750,000 people asking for help every year on leasehold issues it would suggest an even bigger problem with leasehold than is likely to be the case. A large proportion of the people “helped” by LEASE will actually be providers in the sector wanting to know what information is available to leaseholders. Providers are also more likely to want to use particular parts of the LEASE website such as the section which allows them to review Tribunal case decisions.

“Unique visitors” is such an unreliable measure because, when an individual uses different computers, tablets, and phones, or different web browsers, this results in multiple counts for the same person. 700,000 unique “visitors” could easily be 100,000 individuals, and not all of them will be leaseholders. Yet even Ministers repeat this highly inaccurate claim by LEASE without question.

Paragraph 33 looks at customer satisfaction in relation to one set of issues, noting the results for all categories are below 50%. There could be many legitimate reasons behind these figures. However, the report chooses to speculate, without appearing to offer any evidence, that this dissatisfaction may be because “Customers may also not get the answer they wanted”. This view, which some may see as pejorative, seems unhelpful and suggests negative preconceptions about leaseholder attitudes on the part of the reviewer.

2018 report

Paragraph 1.2 states that the review’s focus is on the help offered to leaseholders across the whole sector. However, it then states: “Although the review took a holistic approach to the provision of advice to leaseholders, inevitably, the role and performance of the Leasehold Advisory Service (LEASE) was a primary focus”.

The report does not explain why it is “inevitably” the case that it needs to focus on LEASE. There is perhaps an implicit, but incorrect, assumption that LEASE effectively has a near monopoly as a provider of help to leaseholders.

The review then fails to mention the work of LKP, the FPRA and many other groups.

Paragraph 2.11 contains a statement which is factually inaccurate.

“LEASE themselves were clear that they were “unashamedly” on the side of leaseholders.”

Unfortunately, they were not. In 2016 the same management had supported a move to commercialise their income from landlords and agents even further.

These two positions are entirely inconsistent. Both the 2016 and 2018 reports also failed to make clear that LEASE had been looking to expand their commercial activities, long before government asked them to do so.

It was Housing Minister Gavin Barwell, not LEASE, who decided that this commercialisation must stop in February 2017.

Despite this apparent change of stance, at the end of 2018 LEASE has still not updated their articles of association to make clear they are only there to support leaseholders. The articles still say they will provide:

“advice and information to members of the public and in particular to landlords and tenants”

The government also confirms that LEASE’s business plan has not been updated since the February 2016. This is the plan where they look to expand their commercial interests still further.

The 2018 report does, however, make clear that LEASE have now agreed to provide help only to leaseholders. It is not clear why the articles and business plan have not been updated.

Paragraph 2.13  states there is no “market provision” of a LEASE-type service. This is clearly factually incorrect given that LKP and a number of other providers exist in the market, despite the government’s monopoly support and funding for LEASE.

The market enquiry in the 2016 review (paragraph 61 iii) refers to “exploratory market testing”. The authors of the 2018 report will not necessarily know that the 2016 review does not give a clear picture on this point. The “test” was carried out at the end of October 2015. It’s stated objective was to see whether other groups were interested in providing services to leaseholders.

The test comprised a short and generalised document, published on the Cabinet Office contracts site. The document was not advertised. It also required a response within just 14 days. Few will have seen the document, and even if they had it was by no means clear what kind of response was expected. It can reasonably be assumed that if more time had been allowed a large number of commercial providers would have been interested in bidding to supply the training and commercial services offered by Leasehold Advisory Service at the time. Groups like LKP and the FPRA would have been interested in bidding for funds to support their work offering leaseholder advice services.

Point 3 of paragraph 2.2 states there is: “The requirement for a consumer champion or national voice for leaseholders. When pressed it was generally agreed that this point was not about direct lobbying or criticising government which may be inappropriate.”

We would ask why the report asserts that criticism of government’s policies would somehow be “inappropriate” for a consumer champion?

The report then provides this definition for the role of a consumer champion: “clarifying the purpose and empowering any organisation that provides advice to make better use of internal data, information and intelligence to identify abuses or anomalies and raise them with government to inform policy making”. This unusual and incorrect definition of a consumer champion gives the appearance of having been reverse engineered to simply reflect the limits of what Leasehold Advisory Service has done.

LKP has spent 8 years identifying abuses, providing data to the Housing Department on a wide range of issues, providing advice to leaseholders, accrediting ethical managing agents, convening more than 30 cross-sector meetings in parliament, acting as APPG secretariat, reporting on the sector and acting as the independent consumer champion. Yet LKP, for some reason, are not even mentioned in this “holistic” report.

What the report seems to imply is that somehow Leasehold Advisory Service could, in fact, be the consumer champion.

The government and officials and Leasehold Advisory Service all seem to forget that they spent many years claiming the leasehold system was “balanced” and “mostly working well”. As recently as last year Leasehold Advisory Service made clear it was not their job to tell the government about problems in the sector. It feels uncomfortable that the Housing Department has concluded that it would be a good idea for Leasehold Advisory Service to suddenly transform and be seen the consumer champion.

Paragraph 2.5 considers “gaps in provision”. Again the comments focus on Leasehold Advisory Service rather than the sector. The report suggests that LEASE could somehow help to fill these gaps in provision, despite the fact that they have not done so over the last 20 years. The author of the 2018 report may not be aware that a number of the suggestions in their report have already been tried by LEASE before and have failed.

Section 3Many would disagree that Leasehold Advisory Service is seen as the first port of call for all leasehold advice, given that much of the advice needed may not have a direct link to the law. The idea that LEASE might be regarded as a consumer champion (3.2) suggests that the Department has not fully understood what LKP has been doing for the last 8 years, while LEASE was helping landlords and agents.

Conclusions from the reports

It is far from clear why it took 18 months to produce the 21 page 2016 report, or why it then took another 32 months to publish that report.

Both reports exclude the views of a number of the key stakeholders, including LKP.

The 2018 report states that it has taken a “holistic” approach but the report then focuses almost entirely on Leasehold Advisory Service. The report does not reflect the work of groups other than Leasehold Advisory Service. It does not review the nonlegal aspects of leaseholder support which sit outside the scope of the role of Leasehold Advisory Service.

The 2018 report does not explain why there was a fundamental change of approach in February 2017. This change arose, as far as we understand, not from the 2016 report, but due to the decision by Minister Barwell to entirely dismiss the approach adopted in the 2016 report.

Because both the 2016 and 2018 reports only focus on Leasehold Advisory Service neither report considers whether there is potential damage to the market in continuing to take a purely Leasehold Advisory Service centric approach. The reports do not consider why groups like CARL have now fallen away or why AgeUK and a number of other groups have had to close down their leaseholder support offering, not because the problems have gone but perhaps because the government continues to offer a monopoly of support to LEASE, making it almost impossible for other organisations to survive.

Neither report comments on the fact that the government’s monopoly approach is likely to have become a self-fulfilling prophecy.

Leasehold Advisory Service has almost a total monopoly of government funding, support and recommendation for leasehold advice. Hence all government bodies feel they must refer to it and recommend it, and many commercial providers in the sector feel they should do the same. The government has confirmed to LKP that their decision to provide LEASE with an additional £465,000 to help with the cladding emergency was not subject to any form of competition or formal tendering process. The money was simply passed to LEASE without any additional framework agreement or formal memorandum of understanding.

Both the 2016 and 2018 reports fail to take the opportunity to critically examine Leasehold Advisory Service’ performance or to evaluate whether that performance is good or bad across particular issues or via different delivery mechanisms.

In the 2016 report it uses the results from a survey of 1,000 customers. These were customers who were happy for LEASE to keep their details. It is unlikely that this very selective sample is representative of all leaseholders who have experienced problems and contacted LEASE.

At paragraph 39 the 2016 report quotes a positive comment about LEASE from the CMA 2014 project on property management. We would not entirely agree that the CMA comment reflects the evidence provided to them. What the 2016 report does not reflect is that the CMA survey also showed that only 4% of leaseholders went on to contact LEASE (page 121) when they had a leasehold problem.

https://assets.digital.cabinet-office.gov.uk/media/54048508e5274a48c400003d/Ipsos_MORI_CMA_Leaseholder_Survey_Report.pdf

We are aware that a number of submissions to both the 2016 and 2018 reports included criticisms of LEASE, and these do not seem to be recorded in the reports. This anomaly has now been highlighted by evidence submitted to the Select Committee, which is far more mixed than suggested in the 2016 or 2018 reports.

LKP’s view of Leasehold Advisory Service

LKP’s position in regard to LEASE has been set out in our submissions to both reports and on our website over many years.

LKP accepts that most, although not all, of the written guidance on LEASE’s website, is good or at least adequate, however, over the years we have highlighted many problems with Leasehold Advisory Service and exposed a number of serious failings, including:

  • Advertising poor practitioners in the sector
  • Helping landlords and managing agents to gain an unfair advantage in the tribunal
  • Helping promote systems which allow landlords to gain an unfair advantage over leaseholders
  • Providing poor legal advice on certain issues
  • Providing advice that can sometimes lead leaseholders into wrongly taking action in the Tribunal
  • Not exposing clear deficiencies in the legislation
  • Poor board selection processes by officials as indicated by issues with two chairman and other board members over the last ten years
  • Opposing legislative change which would have been beneficial to leaseholders to improve balance in the system
  • Continuing to work in such a way that allows them to be thoroughly endorsed by some of our worst landlords

Despite these concerns and the input of others, both the two most recent government reports state that “LEASE advice was well regarded”.

Leasehold Advisory Service and funding for other leaseholder support

Support for the Leasehold Advisory Service from government has continued throughout the last 20 years. In that time LEASE will have been paid the equivalent of more than £20 million.

The most common complaint we hear about Leasehold Advisory Service is that they can only provide very limited advice, i.e. one 15 minute phone call. This means they have limited scope for looking at the detail.

Throughout this 20 years, the Housing Department has actively chosen not to support any other group working to make a difference in the leasehold sector.

The lack of support from the government for other groups remains unexplained. The funding system for LEASE falls under legislation which allows the government to support “any” group offering help with leasehold issues, rather than just LEASE. As far as we are aware in the last 20 years no monies have been provided to “any” other group except LEASE.

https://www.legislation.gov.uk/ukpga/1996/52/section/94

The Housing Department has no procedure to allow any organisation other than LEASE to apply for funds. As was stated at a recent Select Committee hearing by Shula Rich of the FPRA, in the past officials have even wrongly stated that no monies are available under legislation to anyone else but LEASE.

The claim in both reports that LEASE offers good advice to leaseholders seems to sit in direct contradiction to the oral evidence submitted by two leaseholder groups to the MHCLG Select Committee, 5th November 2018. The NLC, the FPRA, LKP and the APPG expressed concerns about the “help” provided by LEASE. On 10th December 2018 the Select Committee interviewed LEASE chief executive Anthony Essien, who faced a large number of criticisms of his organisation.

Yet despite our concerns and those of others, the government continues to assert that LEASE should carry on as they are. At the moment the government is selecting a new Chair for LEASE, who is tasked with yet another review of their work. It is expected to take 12 to 18 months.

If the Housing Department continues to provide LEASE with a monopoly of funding, a monopoly of endorsement and a monopoly of support, is it any surprise there are so few other providers able to offer help in the sector?

It has been very telling, throughout all these reviews, that nobody has asked LKP to explain what help we provide for leaseholders. Had they done so they would have found that we also have hundreds of thousands of people who visit our websites every year, and thousands of people who receive individual help and support.

A comment in the 2018 report which is particularly disheartening to LKP is:

“On building and fire safety it is acknowledged that LEASE has a difficult role.”

Yes, it is difficult, but with an extra £465,000 provided to Leasehold Advisory Service, it’s a lot less difficult than the position faced by LKP. We have had to help on cladding issues and have run cladding forums in parliament and meetings with building safety officials and agents and cladding experts without a single penny of help or support from the government.

It concerns us that the officials should make such comments when they are aware that we have ended up helping cladding sites who have been given poor advice by LEASE.

 

Can the Leasehold Advisory Service monopoly survive devastating questioning by Select Committee?

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– 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?

Anthony Essien, the long-term chief executive of the Leasehold Advisory Service, faced a barrage of criticism from Select Committee MPs, who have heard widespread criticisms by leaseholders of the £2 million service

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”.

Labour MP Helen Hayes asked Mr Essien: ‘Should the funding that the Leasehold Advisory Service receives be distributed across a range of organisations so that leaseholders have a choice of organisations where they can go for advice?’

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.]

MPs Tanmanjeet Singh Dhesi and Teresa Pearce also subjected the chief executive of LEASE to strong questioning. Mr Dhesi asked why it had run seminars on how freeholders could maximise income from leaseholders. ‘That is in direct contradiction of what LEASE should be about,’ he said

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

‘If I fail to offend anyone, I will do it next time,’ Bottomley tells appalled LEASE annual conference

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, chair of the Select Committee, was told that ground rents above 0.1% with regular reviews are ‘punishing’. That’s a new definition we’ve not heard before, said the veteran MP

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.

Anthony Essien, the chief executive of the Leasehold Advisory Service, is the only witness before the Communities Select Committee to appear alone

Even if you only respond to one question, take part in the Law Commission consultation!

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Law Commissioner Professor Nicholas Hopkins is speaking to leaseholders in London on Saturday November 10 at the Law Society

By Sebastian O’Kelly

LKP and the National Leasehold Campaign are organising a public meeting for leaseholders with the Law Commission tomorrow afternoon.

Law Commissioner Professor Nicholas Hopkins and his team will explain their work on enfranchisement, lease extension and commonhold.

Other speakers will include Professor Susan Bright, of Oxford University, and barrister Amanda Gourlay. There will also be officials from the DHCLG.

Those interested can book here. 

LKP and the NLC held a public meeting last week in Manchester; there was another at a law firm in Newcastle, and the Leasehold Advisory Service held one at the Ministry of Justice on Wednesday for 50 leaseholders.

Law Commissioner Nicholas Hopkins told the meeting on Wednesday that the aim of the Law Commission is to “tip the scale back towards the leaseholder” in the enfranchisement process, making it “easier, quicker and more cost effective”.

The response of the audience, who were well informed, was prickly but generally supportive.

One chartered surveyor, up from the shires, was concerned about ruinous rural properties sold on the cheap to people who did them up but knew they would ultimately return to the landlord. “Don’t you dare bugger this up!” the Law Commission was told.

Two leaseholders despaired of reform of this sector, urging that leasehold be ended and replaced with commonhold, which has been on the statute book for 16 years.

The Leasehold Advisory Service was strongly criticised: for not supporting commonhold; for serving the interests of freeholders; for doing nothing to stop ten-year doubling ground rents, or even alerting government about them.

What is the Leasehold Advisory Service for, asked one attendee.

Anthony Essien, the CEO, replied that the organisation was not perfect, but had supported leasehold reform and provides a lot of help for leaseholders.

Not the job of LEASE to warn ministers of leasehold houses scandal, Roger Southam tells BBC

The Law Commission will propose a suite of options for government as the decision how favourable the process of enfranchisement is to leaseholders is political.

Enfranchisement is a (deliberately, in LKP’s view) complicated process and the Law Commission urges leaseholders to respond if only to one of its questions before the consultation ends on January 7.

There are a series of summaries of their aims here: https://www.lawcom.gov.uk/project/leasehold-enfranchisement/

The Law Commission is not going to help those who think they were mis-sold their property, or were let down by conveyancing solicitors, or are exasperated by try-on permission fees, or think there are unfair terms in the lease.

LKP would, nonetheless, urge leaseholders to put their views to the Law Commission.

The leasehold scandal is gathering pace, and the government is unceasingly referencing the Law Commission study as part of the solution.

On the other hand, Labour’s community shadow John Healey is urging a public inquiry into the mis-selling of new homes with onerous ground rents: 100,000 of them in the view of LKP and Nationwide, of which 12,000 have ten-year doubling terms.

The National Leasehold Campaign co-founders Katie Kendrick and Joanne Darbyshire made the same point to the Communities Select Committee on Monday.

A public inquiry would be an occasion to examine how taxpayers have thrown money at plc house builders with the Help To Buy scheme, who have then cheated their own customers with these toxic leases. And the rest of us by not providing real home ownership, but a deeply flawed tenancy paying out a huge income to freehold speculators.

In the words to the Communities Select Committee of veteran leasehold campaigner Shula Rich, leaseholders have been sold the “fag-end of a timeshare”, not home ownership.

Meanwhile, the recently sacked Jeff Fairburn of Persimmon walks away with a ludicrous bonus of £75 million (actually, more like £110 million with some going to charitable causes).

This appalling nonsense in UK housebuilding desperately needs examination.

The government, meanwhile, is rowing back on ex-Communities Secretary Sajid Javid’s pledge to reduce new ground rents to as low as zero: it’s £10 nominal annual ground rent keeps the whole exploitative leasehold system in business.

Communities Secretary James Brokenshire met plc house builders and ground rent investors yesterday, but has yet to meet leaseholders.

This lukewarm response to leaseholders has caused groans of despair, especially among Conservative voters and young would-be buyers, who have haemorrhaged their incomes on rent and now see leasehold not-really-homeownership as yet another generational unfairness.

Professor Hopkins and his team are inevitably drawn into the wider controversies.

The Law Commission has made good proposals:

To make the enfranchisement of flats and houses follow the same procedure;

To increase the length of the statutory lease extension from 90 years (for flats);

To allow estate enfranchisement, which will allow more to escape yet another wheeze dreamed up by our plc house builders: “fleecehold” estate charges, which are now being traded as investment assets.

To allow a “right to participate” for leaseholders in already enfranchised blocks of flats.

The Law Commission is going to offer government a series of options for reform.

But it has already said that Justin Madders MP’s simple multiple of ground rent to enfranchise (10 times was suggested) would likely infringe freeholders’ human rights. This is the system to buy out leases in Scotland and Northern Ireland.

The alternative is to try to reform the valuation models – commissioned to serve the interests of freeholders and accepted by courts – that we currently have.

However, this might mean a recommendation that only one review of ground rent can be the basis of the calculation. For some reason, this loss of income to the freeholder is unlikely to be an infringement of his human rights. But you can bet there will be a good deal of legal muscle deployed to ensure that it is.

On the positive side, the Law Commission emphasises that leasehold is a tenancy and that home ownership is a misnomer. We would hope this strengthens our efforts to ensure that house builders and estate agents only market tenancies when referencing leasehold.

We would add that, given the way plc house builders have gamed the system and cheated their own customers, Help To Buy should not be available on leasehold houses at all and possibly not on leasehold flats, either.

The Welsh government has already decided that house builders need to demonstrate why a house is being marketed as leasehold to qualify for the Help To Buy scheme. Good.

Where ground rents are above 0.1% of sale price and where leases are short (ie 125 years), and where other income streams in the form of consent fees have been secreted away in the small print of the lease, why on earth should taxpayers subsidise the purchase of these toxic products?

There are bound to be a few false notes in a Law Commission report of 500pp, but this one is just irritating:

“… we would emphasis that, while there have been abusive practices in leasehold, there are other landlords who operate fairly and transparently”.

This is just the smarm of politicians, thrown out without a scrap of evidence.

It is also irrelevant. It does not matter whether freeholders are nice or nasty, honest or cheats: ultimately they have an unbalanced degree of power over other people’s lives and their homes.

If the world’s second biggest charity, the Wellcome Trust, thinks its alright to spend over £100,000 to make an example over a naive litigant in person disputing £6,000 service charges in the property tribunal – and, of course, be awarded costs – the imbalance of this sector is clear enough for those with eyes to see.

LKP is pretty certain this case would have gone to forfeiture had we not publicised it and involved mainstream media.

Wellcome Trust got rid of this irritating leaseholder, but closed it all down with the inevitable Non Disclosure Agreement.

So much for ethical freehold owners.

Wellcome Trust spends £114,000 on lawyers to defeat Onslow Square leaseholder in £6,000 dispute

LKP’s essential leasehold guide in The Sunday Times … feel free to add

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By Sebastian O’Kelly

It was good to be able to use a small Q&A article in yesterday’s Sunday Times to offer a mini guide for leaseholders.

This is the sort of thing the Leasehold Advisory Service should be putting out, if it were not in thrall to the commercialisers in the sector.

Indeed, it was an opportunity to remind the wider public that this organisation has been rebuked by ministers and told to do its job properly.

Until its monopoly position as the taxpayer funded “support” service is ended, it is simply an impediment to reform.

Did it alert government to doubling ground rents? No. To the mushrooming of leasehold houses? No. Is it responsible for the civil service and Law Commission examining this sector? Not to the slightest degree.

All the reforms currently being considered are despite the Leasehold Advisory Service, not because of it.

On the other hand, has it hosted seminars advising freeholders how they can scam leaseholders with insurance commissions of 50 per cent? Yup.

Has it honed up the skills of freehold speculators such as Martin Paine – who lands ordinary families with ground rents of £8,000 a year? Yup, a second time.

Is it keeping its fingers’ crossed hoping that the current wave of leasehold reform fizzles out? Almost certainly.

And so it goes on …

Sunday Times article below (click image to expand).

Please feel free to add other points in ‘comments’:

Is LEASE an institutionally corrupted organisation?

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“Institutional corruption is manifest when there is a systemic and strategic influence which is legal, or even currently ethical, that undermines the institution’s effectiveness by diverting it from its purpose or weakening its ability to achieve its purpose, including, to the extent relevant to its purpose, weakening either the public’s trust in that institution or the institution’s inherent trustworthiness.” – Lawrence Lessig.

Anthony Essien Chief Executive of LEASE since 2007

Over the years LKP has exposed many problems with LEASE, including the following:

  • In 2010 LKP showed that LEASE was promoting the benefits of buying ground rents by investors to the detriment of leaseholders. Taxpayer-hosted seminars explained that for a minimal investment one could obtain control of the building as well as a number of additional income streams such as 100% mark-up insurance commissions.
  • LKP showed that LEASE was selling training to landlords to help them prepare their cases against their leaseholders at the tribunal.
  • LKP showed that LEASE was selling training to landlords helping them to present their evidence against their leaseholders at the Tribunal.
  • LKP showed that LEASE’s website included advertisements for contentious services providers in the sector, including one who they knew had been found no longer fit to hold a judicial office by the Ministry of Justice.
  • LKP showed that LEASE have been happy to train some of the most oppressive landlords in the sector.
  • LKP exposed the fact that LEASE continues not to report or expose poor practices in the sector to government officials.
  • LKP exposed the fact that LEASE continues not to highlight defects in leasehold legislation.
  • LEASE claim they are not permitted to report poor practice or highlight defects in legislation due to their remit despite the fact that they were told by officials this was not the case as long ago as 2014.
  • LKP has shown that LEASE has on occasions opposed legislation changes designed to help leaseholders.
  • LKP has shown that, in the government’s unfair lease terms consultation, LEASE enthusiastically supported many smaller changes, but were somehow less forceful on larger and more important issues such as supporting the banning of ground rents on new build homes.
  • LKP exposed the fact that both the two most recent Chairs of LEASE were totally inappropriate for the role. Their combined tenure covered more than a decade.
  • LKP has highlighted the fact that there has been no leaseholder representation on the board of LEASE for many years.
  • LKP exposed the annual LEASE conference as a trade show and forced LEASE to make at least some effort to run a leaseholder event. That leaseholder event has now been canceled.
  • LKP has exposed the fact that LEASE overstates the number of customers that contact them and the level of service they provide to them.
  • LKP has exposed the fact that LEASE sometimes provides poor or very poor advice to leaseholders.
  • LKP has shown that LEASE has sometimes offered the wrong advice to leaseholders, on key issues.
  • LEASE have chosen not to provide any constructive support in any of the work that LKP and the All Party Parliamentary Group on Leasehold and Commonhold Reform (APPG) have been involved in to promote an improvement in the legislation. At best, they have been reluctant attendees at the APPG as one of their emails accidentally made clear. They have on a number of occasions sought to undermine LKP and the APPG.

Each time LKP highlights a failing by LEASE the issues raised seem to be quietly swept under the carpet by a succession of officials.

The government continues to offer its full support to LEASE as its monopoly-funded and supported provider of leaseholder help. Like a washing powder, each iteration of LEASE has become supposedly improved and yet remains ineffectual.

In 2017, having spent more than 15 years actively selling better services to landlords and managing agents than they were offering to leaseholders, LEASE’s role changed overnight and in February 2017 they suddenly became “wholly on the side of the leaseholder”, according to the then Housing Minister Gavin Barwell.

The same management that had been so happy to provide an advantage to the supply side of the sector now supposedly existed only for the benefit of leaseholders. Despite this, a year after this supposed Damascene conversion, LEASE’s chief executive was happy to explain, at the annual Institute of Residential Property Management conference, the range of improved services he had been hoping to provide to managing agents and landlords before the government told him to stop.

LKP’s thanks for exposing LEASE’s many failings over the years has been negative.

LKP has been sent to Coventry by officials on occasion and even been sat on the naughty seat in meetings with Ministers and not allowed to speak. In 2014 LEASE made a major effort to discredit LKP with a new rotation of incoming senior officials at the then DCLG. We have seen no evidence that this culture has changed.

Most recently LEASE has been provided with an additional £465,000 to help leaseholders faced with cladding problems.

We warned government from the outset that this would not help. We are now told by leaseholders living on various cladding sites that LEASE have offered little help other than to read the lease and provide them with the contact details of the National Pro Bono Centre.

After a year, LEASE has not been involved in helping to resolve a single cladding site case. They didn’t even attend the leaseholder cladding forum recently held in Parliament – the only meeting so far where flat owners faced with the trauma of Grenfell cladding have actually assembled.

When LEASE was originally created by Lord Young he intended it as a short-term measure to help the whole market understand the 1993 Leasehold Reform, Housing and Urban Development Act. The organisation soon transformed and, although the 1996 Act that funds LEASE refers to the government supporting “any” group, the officials have treated LEASE as their monopoly supplier ever since.

The influence of LEASE has since become entirely toxic to any other organisation that strives to support leaseholders. Many on the supply side of the sector warmly welcome LEASE. Its passive and “impartial” approach has contributed to an environment where poor practice has been able to flourish.

As a result of the government’s position, other than LKP, there has been no other group willing to argue for leaseholder issues and against LEASE’s negative influence.

The Federation of Private Residents Associations (FPRA) is there to support residents’ associations but their content sits behind a paywall. AgeUK had to give up on providing leaseholder support many years ago; Citizens’ Advice Bureau support is random and limited.

LEASE’s institutional corruption has shown itself in many guises over the years. Sir Peter Bottomley has been particularly outspoken about the LEASE conference which ran until 2017.

“Their idea of raising money commercially was to run a conference where lawyers, accountants, surveyors and freeholders came together to swap ideas on how to put one over on the leaseholders. Only when the Leasehold Knowledge Partnership charity started pushing did some of the leaseholders get invited to a little bunfight afterwards. The trustees of LKP were not invited to the conferences, but some of them decided to go anyway. That is a crazy way of dealing with things. When I raised that with Deep Sagar and similar issues with Roger Southam— the present LEASE chairman, who I doubt will be chairman for very long—they did not respond in a way that I regard as proper.”

[su_box title=”2014 LEASE attempt to discredit LKP” style=”glass” box_color=”#978742″ radius=”13″] 2014 saw a new set of senior officials take over the work on leasehold issues at the then DCLG. LKP and LEASE were asked to meet to consider how things could move forward more positively.

LEASE Cheif Executive, Anthony Essien, and LEASE Chair, Deep Sagar, wrote to DCLG with a list of 44 supposedly “inaccurate and unjustified” statements about LEASE which they claimed appeared on the LKP website. This list was a jumbled mess with no references to specific articles supplied.

At the time DCLG asked: “I would also request that you treat the content of the attached document [the list of 44 complaints] and your subsequent reply as ‘not for publication’ in the spirit of trying to move forward more positively.”

LKP was happy to comply with this request and spent a week checking the site and providing evidence that 42 of the 44 supposed “inaccurate and unjustified” statements about LEASE were actually entirely justified, and that the 2 remaining comments did not even appear on the LKP website, in any article.

Neither DCLG nor LEASE subsequently disputed any LKP’s evidence. It was agreed by all parties that it would best to move forward positively and for LKP not to complain about LEASE having made these false accusations. LEASE CEO, Anthony Essien, confirmed: “We are also happy to move forward and concentrate on the substantive issues in the sector.”

Sadly LEASE never engaged positively with LKP, however LKP went on to work with DCLG officials on a number of important issues, including helping them to produce the first accurate government estimate of the number of leasehold homes, and the beginnings of the move towards what has become the review of commonhold and much of existing leasehold legislation[/su_box]

[su_box title=”2017 LEASE undermine Secretary of State Javid” style=”glass” box_color=”#978742″ radius=”13″]

Shortly after Secretary of State Sajid Javid made the huge announcement that he planned to crack down on leasehold abuse with “radical” proposals, LEASE came forward with an argument against the Secretary of State.

They talked about the fact that: “The elephant is the investment sale of ground rent provides additional income for the developer to make schemes viable in a lot of cases. There is the rhetoric of profiteering and finger pointing but somewhere along the way we need to have an objective conversation about the whole development cycle and how it works in all facets to ensure that the right decisions are being made for the right reason”

The Secretary of State’s officials were then contacted by LKP to point out that their “wholly on the side of the leaseholder” funded body should perhaps not be so quickly seeking to argue against the Secretary of State. This is especially true since LEASE’s argument advocates the same arguments now being put forward by the developer’s lobby, in order to oppose change.

LEASE’s article quickly disappeared from their website and was replaced with a 404 error message

https://www.lease-advice.org/article/a-message-from-lease-chair-roger-southam-5/?dm_i=OUE,52SZX,6J6YM7,JFWXY,1

However, LEASE staff then quietly re-released the same article again under a different web page, which is quite extraordinary.

Message from LEASE Chair Roger Southam – July 2017

The July 2017 LEASE board minutes record that LEASE Chair, Roger Southam, had filed a formal complaint with the Parliamentary Standards office against APPG co-Chairs Sir Peter Bottomley MP and Jim Fitzpatrick MP and against LKP as APPG secretariat. Neither Chief Executive, Anthony Essien, or Chair, Roger Southam, had the courtesy to advise either LKP or the co-Chairs of the nature of this complaint, which did not appear on the LEASE website until many months later.  Currently, the LEASE board minutes still fail to record that this complaint was dismissed by the Parliamentary Standards office who felt there was no merit in even opening an investigation. No apologies have been received by any of the parties.

 

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This brings us back to the criteria for institutional corruption.

“Institutional corruption is manifest when there is a systemic and strategic influence which is legal, or even currently ethical, that undermines the institution’s effectiveness by diverting it from its purpose or weakening its ability to achieve its purpose, including, to the extent relevant to its purpose, weakening either the public’s trust in that institution or the institution’s inherent trustworthiness.” – Lawrence Lessig.

The government cannot allow this situation to continue and must take action.

 
 

 

Martin Boyd should be the chair of LEASE

//  by 

Martin Boyd, trustee of LKP, is the only outstanding candidate to be the chair of LEASE

By Sebastian O’Kelly, LKP trustee

There is only one outstanding candidate to be chair of LEASE and that is Martin Boyd.

He is the only person involved in leasehold activism with the knowledge and abilities that will hold credibility with the sector.

He is respected on this subject by ministers, MPs and civil servants.

As well as LKP trustee, he is chair of an enfranchised block of flats, with a theatre and restaurants below and Thames river frontage. In other words, a complicated, mixed-use site worth around £250 million.

If he can run that, he can certainly chair LEASE.

He has always said he does not want to get involved in such an organisation.

But he should think again.

Frankly, if he cannot reform it into an organisation that addresses the appalling abuses in leasehold – and be unambiguously on the side of leaseholders, to use the words of Number 10 chief of staff Gavin Barwell – it might as well close.

Then various charities like us could take on the role instead.

It is wrongly assumed that I am the leader of LKP because I make the most noise: I’m not. It is a partnership.

But he is undoubtedly the better candidate for this role than I am.