Leaseholders have until 11pm tomorrow to participate in the Sajid Javid’s consultation into leasehold system.
This is the best chance leaseholders have had to make changes to leasehold law since the 1990s.
All leaseholders should respond. So far, only 3,000 have done so.
You can respond here:
Tackling unfair practices in the leasehold market – GOV.UK
Seeks views on prohibiting the sale of new build leasehold houses, limiting ground rents and protecting leaseholders from possession orders.
Related posts:
Labour MP Helen Hayes ‘disappointed’ by Sajid Javid’s response on leasehold scandal
Sajid Javid vows to ‘stamp out abuses’ over leasehold that make homes unsellable
Countdown to a media storm over leasehold
Sajid Javid does not like regulation. What about micro management like Help To Buy?
Has Brokenshire trashed Sajid Javid’s reforms of leasehold?
Has Taylor Wimpey done just enough to avoid being successfully sued?
Sadly predictable that most leaseholders have failed to respond given the abject failure to listen to them in the past? On the other hand, 3000 vastly beats the total recorded responses (956) to the 1998 consultation that led to absolutely very little effective reform from a government that had said it thought leasehold was broken and feudal.
My guess is the majority, like me (except I did respond), can’t help see the exercise for what it will likely turn out to be, mere tokenism.
Will England’s legislators ever reform residential leasehold in a meaningful way? After all, it is the English tradition to have lords and betters and they make the law. Freeholders are called ‘landlords’ when they do not invest in the property (after sale of the leases), and leaseholders are called tenants even though they do invest the vast share and pay all costs. It turns the concept of ownership on its head somewhat. But the ‘elite’ must get their yield from somewhere. We should be grateful they do not cart off the bride on her wedding day no more.
Only in England could you get away with this flagrant ‘con’ in modern times.
Government had to do something about the ground rent scandal because that could hardly be ignored. That broke the cardinal English rule: ‘Do not scare the horses’. This reform exercise is very likely a soothing exercise to let the scam return to its more insidious normal level of explotiation.
The 956 last time was in response to a reform consultation paper in November 1998, imaginatively titled: “Residential Leasehold Reform in England and Wales – A Consultation Paper”.
Bear in mind what the government at that time said about leasehold:-
“Leasehold tenure is almost unique to England and Wales. It has its roots in the feudal system and gives great powers and privileges to landowners. It is totally unsuited to the society of the twentieth – yet alone the twenty-first – century.” Hilary Armstrong, DETR Nov 1998.
And…
“The Government believes the leasehold system is fundamentally flawed.”
What improvements have you seen since they said this in 1998? In May 2006 the DCLG published an analysis of that 1998 consultation.Key findings quoted:-
“The Department has received 956 responses to the consultation paper.
Individual leaseholders were the largest category responding to the paper, with over 65% of all responses.
Leaseholder Resident Associations were the next largest group with nearly 11% of responses and Property Professionals accounted for 8.5%.
Less than 4% of the responses were from Landlords.
Over three quarters of respondents were from the London area (54%) and Southern England (22%).”
The Issues versus Responses were then listed:
Issue: Governments objective to simplify and widen eligibility for Collective Enfranchisement:
Response: Majority agreement with the objectives of the exercise; almost as many leaseholders want to see leasehold tenure abolished.
Issue: Simplifying Valuation procedures
Response: Strong support from all groups for the simplification of valuation procedures.
Issue: Marriage Value
Response: Opinion on marriage value is divided. A majority of all landlords and professionals want a fixed 50/50 apportionment whilst leaseholders want it abolished.
Issue: Creation of a leaseholders no-fault Right to Manage
Response: Leaseholders strongly support the right to manage, but landlords and professionals are divided.
Issue: Additional Controls on Managers and Agents
Response: There is very strong support from all groups for additional controls on managers and agents.
Issue: Concerns about insurance and accounting issues
Response: There was general concern about insurance and accounting issues.”
Of all the issues, the only one that survived into the 2002 Act was RTM, but a deeply flawed form of RTM for leaseholders who have tried to make it work. What did work was then destroyed by three court or appeal judges in 2015 at a stroke of their quills. You need to read the stuff they gave as excuses for blocking RTM on more than one block. Many estates have small blocks of 2+ flats. These are managed by one agent for one freeholder. Yet apparently leaseholders could not be trusted to do this, or might want to manage estates around the country (despite courts always hitherto insisting on a common interest).
When you read court decisions at any level you cannot help but sense a constant bias in favour of the great English landlord, bless that role. (Except in residential leasehold it is not real ‘landlording’, just a lucrative legal version of it).
The rest of the 2002 ‘reforms’ were a horlix in practice due to apparently quite deliberate clauses.
The farce is a notion of seeking ‘opinion’ in an industry where one side makes huge and largely unfettered profit and the other side pays all the bills.
Guess which side has more clout among legislators?
Leasehold is not a scandal of one party in government. They all know it is a scandal. But it is an English scandal. And a nice little earner at that.
PS; You might notice that only 4% of responses last time were from landlords? You might be forgiven for thinking they did not feel any pressing need to respond. Parliament is there to protect their interests and where it fails in its duty the courts step in. The 2002 Act certainly gave landlords nothing to worry about.
Absolutely spot on with your comments as always Paddy!!
I’m sure everyone who comments here has responded but how many of us actually believe it will do any good? Probably not many and you have certainly spelled out the reasons why particularly regarding RTM!! I am still waiting for someone to come up with a concrete answer as to what should be done to rectify the situation for those already managing more than one block!!
Given the sheer scale of the number of leaseholders that have been exploited by unscrupulous freeholders/managing agents, that only 3,000 leaseholders have responded to the survey does indicate the lack of awareness that leaseholders have of how they are being exploited?
This lack of awareness has been a vital tool for freeholders and managing agents to pursue they monetising agenda at the expense of leaseholders. .
Dear Michael,
I think you are being too generous. “Lack of awareness by leaseholders” ? C’mon, most folks are aware when they are being shafted but most t folks can’t be A#s#d to do anything about it. Too apathetic!!
1. Too busy.
2. Too busy and got children to look after.
3. Oh, man I have a life and can’t be bothered.
4. Letting their flat , getting a nice rent so ” who cares” yadda yadda.
Leaseholders had better wake up and take action or get shafted and shut the hell up. SIMPLES! NO EXCUSES. SILENCE IS A CRIME.
Funny thing though Kim? If those same people receive a parking ticket they scream blue murder, they will fight it to the death citing a” breach of their human rites, it’s demanding money with menaces etc etc.”
Yet if instead of a parking ticket, they are ripped off by the same amount of money but instead of the demand headed by” Penalty Charge Notice” it is headed by “Service Charge Demand”, they shrug their shoulders and pay!
Exactamundo Michael. It beggars belief but there it is.
I am actually speechless ( well sort of) that more leaseholders have not participated in the consultation..
Oh well , leaseholders will reap what they sow and apathy only reaps same old ,same old extortion!
APATHY IS A CRIME.
In addition to my previous post:
The excellent National Leasehold Campaign has 7,000 + members, surely at least half the members completed the online consultation? I cannot believe that the contribution by leaseholders is only 3,000?
If all NLC members participated the sum could be nearer 11,000.
I mean it was all over social media!!
Some times Kim, I can’t even be bothered to be apathetic!
I hear you Michael. But leaseholders must galvanise and fight to the end!
APATHY IS A CRIME. SILENCE IS A CRIME. NO EXCUSES-EVER, YOU REAP WHAT YOU SOW FOLKS!!
If 956 responded to the 1998 consultation as advised by Paddy and around 3500 to the current one I do find that surprising – if I was on a quiz show I would have expected more due to the power of social media and the ease of posting online.
With the housing market become increasingly less populated by young people i.e. Between 20-25 this may be a contributory reason.
Loving the ” That was the week that was”? Pic. . Come on leaseholders behave as Lions and shake off your chains, not as lambs to the bloody slaughter. WAKE UP!
I am not surprised so few leaseholders fill in the DCLG consultation.
Not down to apathy but because most leaseholders don’t know about the consultation unless they access LKP. They have virtually no understanding of lease law and rely 100% on their legal advisers and mortage providers.
The consultation could have been written by Taylor Wimpey . No mention of commonhold or regulation of service charges.
Ground rent is mostly seen as a service charge for mowing the grass and upkeep. It’s a more logical interpretation than the incredible reality of a feudal payment for no benefit often to a tax haven. Maybe even one of Cameron’s relatives. Couldn’t possibly be true or could it..
The recent shocking stories about Macarthy and Stone lease properties losing money is just accepted as one more rip off. I’ve even heard commentators say ‘they are old people due to die soon so falling values don’t matter’.
Stephen. How does ‘deferred consideration’ fit your GR model on retirement homes falling values.
Hi Joe
I believe that question 21 Of the consultation allows for leaseholders to ‘voice’ their comments re service charge rip etc. I filled in the online consultation but in addition wrote to the DCLG relating to regulation of managing agents and the abolition of forfeiture from the statute book.
I did receive a reply stating that my ‘ papers’ re the aforementioned issues will be included as part of the consultation.
I reiterate that leaseholders have to WAKE UP!! It didn’t take long for the leaseholders who were being sold leasehold houses to WAKE UP and start the excellent NLC group in January ,which has I believe initiated the consultation. They were vocal.
Flat leaseholders paticularly in chi chi London had better protest or shut up. They must not expect others to fight on their behalf. NOBODY is too “busy” to fight for what is right. .
SILENCE IS A CRIME. NO EXCUSES.
In my experience new build retirement accommodation is marketed with woefully inadequate budgets
Once sold the real costs of such accomodation surface and costs rise significantly and in part explains the poor resale values
For some it may work better if the developer took a higher ground rent and reduced the purchase price significantly . The ground rents to rise and fall in line with the state pension . The lessee would have more capital which depending on their circumstances may be better
Certainly retirees not expecting to reach a great age may find the idea of particularly merit and more so if they have no children
Again I make the point that in taking on an obligation to pay ground rent is of value to the freeholder and this must be clearly valued and shown next to the premium paid. It is clearly part of the consideration given for the lease and all the abuse about onerous ground rents would be avoided. The government to set the discount rate used to value the rent
Stephen, Not only are budget set deliberately and unrealistically low to aid sales, but certain managing agents engage in a practice known in the trade a “Lowballing”
This is a method adopted by these managing agent quote very low for management contracts in order to obtain the contract. Once obtained charges escalate dramatically. .
Joe,
Were you aware that when Tchenguiz Family Trust companies bought the freeholds of McCarthy & Stone freeholds (and appointed connected companies as managing agents) the income derived from residents departure from their mortal coil was pledged as an asset that was borrowed against?
The majority of leaseholders keep their eyes tight shut and try to get by as best as they can.
I took the freeholder and their dodgy lawyers to FTT and I was shocked to see how the judge preferred to pretend the system works just fine. After all I am only a tenant…
Flat Leaseholders are too beaten down to do anything about a system that is so complicated and expensive that even top property lawyers cannot agree on critical points. Leaseholders those who have invested in buy -to -let still make money in this market, so again they just prefer to keep quiet. If they make a fuss there is risk of devaluing their own property. For the freeholder there is no risk.
I ve send a copy of this article to everyone I know with a flat – please do the same. Fleecehold has to end – great graphic by the way. Just one observation: the freeholder is not always the benign English gentleman with a bowler hat…
Leasehold reform I would be interested in making contact to hear more about your FTT experience.
I am currently being sued by my Freehold co for what I believe are irrecoverable excessive sums for ‘Major Works’ due in 2018.
The case was due to be heard at a London county Court but has been transferred to FTT.
Admin have my contact details.
Great cartoons. Right in line with my key arguments. 3001 replies now or is 3501! It is not the number of replies that win will the day; it is the strength of argument and compelling evidence of the unjustness, unfairness and the lack of transparency embedded with the system since at least as far back as 1993. My final comments was ‘… I hope the government and Parliament have the guts to stand up to vested interests and abolish the leasehold system …’ but we shall see. Keep up the good work LKP/APPG and all you merry leaseholders, this battle will be won.
My ground rent, is an outdated system which should have been discarded years ago. The fact that it is aligned to RPI and not CPI is one issue I am against. This price index is totally unfair as it does not reflect proper costs to the owner of the property. Other important issues against this outmoded system of land ownership by ground rent owners, to the residents is that the government and the Judiciary bodies just don’t realise lots of the problems attributed to ground rents in the Park Home sites in the UK
Because, in Park Home sites all over the UK, residents have to pay their site owners, who are also their ground rent owners too, 10% commission of the sale price of our homes to their site owner after selling their home to the purchaser of their home. So this issue alone is paramount to residents all over the UK, as this rule applies to every residents in every home, on all park home sites in this country. Thousands of residents are having to do this, each time they sell their HOMES WHICH ARE owned by each residents.
Admin,
How many responded to this consultation ?
What is the result ?