Fewer leaseholders’ rights would help make buildings safe, L&Q tells MPs

By Harry Scoffin

Flat owners should have no more rights than rental tenants when it comes to resisting safety measures in blocks of flats, L&Q’s head of fire safety told MPs last month.

James Carpenter called on ministers to gift freehold owners the demised premises of apartment buildings, suggesting leasehold be reformed along the lines of build-to-rent.

MPs were asking Mr Carpenter for his views on the Fire Safety Bill, a minor change being pushed through by security minister James Brokenshire.

The three-clause Bill is expected to clarify the scope of fire safety orders and hand Communities Secretary Robert Jenrick new powers.

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The technical reform will be bolstered by the Building Safety Bill, which has been described by government as “the biggest change in building safety for a generation”.

Incorporating the recommendations of Dame Judith Hackitt, the former Health and Safety Executive (HSE) chair tasked to design a post-Grenfell system for the construction, occupation and maintenance of England’s high-rises, the Building Safety Bill will be presented to MPs in draft before the summer recess.

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Speaking to the public bill committee on June 25, Mr Carpenter explained that L&Q, one of the UK’s biggest social landlords responsible for 95,000 homes including leasehold and shared ownership properties, was having difficulties accessing the front doors of leaseholders.

He reported internal doors as another problem.

These leaseholder-controlled zones, defined in law as demised premises, is something that needs reviewing, he argued.

Crime and policing minister Kit Malthouse, standing in for Mr Brokenshire after experts gave their evidence, accepted the lack of standardised leases has meant that in some cases neither the freeholder nor leaseholder knows who is responsible for front doors.

Supporters of commonhold argue that their system would be more straightforward, relying less on randomly drafted leases that vary from development to development that need to be overridden by new legislation or case law.

L&Q’s Mr Carpenter cautioned that leaseholders who refuse fire safety upgrades may be putting lives at risk:

“With tenants, we might be able to go to court and get injunctions to gain access to a home, but with leases, that challenge becomes even more difficult. It is their private space and we cannot touch it.

“When it comes to self-closers and checking inside doors, it is optional and voluntary for the leaseholder to listen or to comply with what we are asking. That is a big concern.”

The L&Q executive went on to suggest that leaseholders should have their property rights curtailed in the name of building safety:

“Ultimately, if there was a way of transferring ownership of a leaseholder’s property through legislation so that it is no longer theirs but the building owner’s, that could solve the problem, because it is now our door and not theirs.”

Ensuring that leaseholders receive sufficient compensation for a reduced stake in their property was not discussed.

Mr Carpenter also said that freehold owners need “some leverage” in “getting leaseholders to co-operate”.

It would be “useful if the law” could hold leaseholders “responsible for their action”, he added.

Concerns from the consumer side of the sector that such reforms could lead to unauthorised entry, poor workmanship and overcharging by unscrupulous freeholders were not addressed.

However, a vice chair of the Fire Safety Federation said that non-compliance from leaseholders was only “anecdotal”.

Dennis Davis advised that some renters can be reluctant to grant access to their homes and that it was not an issue of tenure.

He added that there needs to be flexibility on both sides, particularly around the timing of visits, as “people work and so on”:

“Therefore, access outside normal working hours can often be the norm if you are trying to visit inside someone’s dwelling. You can understand why those arrangements have to be made, but it is a serious issue for those seeking to maintain systems …”

L&Q’s Mr Carpenter asked for the burdens on freehold owners to be lessened.

It comes as government grows impatient with absentee building owners over cladding remediation, with Communities Secretary Robert Jenrick resorting to “naming and shaming” shell companies in January to pressure “egregious” freeholders.  

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Speaking to the cross-party group of MPs, Mr Carpenter argued that since leaseholders have a material relationship with the building and can increase fire risk of their own accord, responsibility should be shared between them and the third-party freeholder.

“I think the law needs to be able to hold multiple people responsible, as opposed to just a single building owner,” he said.

On this, he was supported by the Fire Safety Federation’s Dennis Davis, who said the Building Safety Bill must accept industry anxiety surrounding demised premises and common parts of leasehold blocks.

“It needs to be very clear that the ‘responsible person’ has access and can control those elements in the same way that they can control the fire safety systems – alarms or detectors – within a dwelling,” said Mr Davis.

While industry players asked MPs to centralise more power in the hands of freehold owners, some of whom are anonymous and offshore, they stopped short of calling for the financial obligations to match.

New St Albans MP Daisy Cooper, who last week endorsed LKP co-patron Sir Ed Davey to be the next Lib Dem leader, sought to indemnify leaseholders – tenants – against major works costs from building owners.

She proposed, and subsequently withdrew, an amendment “to stop freeholders passing on remediation costs to leaseholders”, which she admitted was a “rather blunt instrument”.

She asked for understanding as she joined the committee “at rather short notice” the week before.

Ultimately, the move was a symbolic gesture which, she said, was designed “to draw the government’s attention to the question of who has financial responsibility” in leasehold.

She continued:

“The Bill puts the onus for fire safety on the building owner, but not enough has been said about who should take the financial burden of the measures that follow.

“The fact is that, despite the responsibility of the freeholder, building insurance premiums that residents may have paid for years, valid new build warranties, financial burden—all those things—it has been shifted and shirked, and ultimately the financial burden seems to land upon their tenants and leaseholders.”

The amendment, which would have been a major change to the leasehold system, failed to attract Labour backing.

Home Office minister Mr Malthouse said it would have driven “a coach and horses through the notion of privity of contract, which is a fundamental part of our economy and legal system”.

Drawing on his time as the minister responsible for cladding remediation, Mr Malthouse added that he recognises Ms Cooper’s “aspiration and the obvious concern and distress that there has been across the country among people who have been caught in the nightmare.”

Another politician scrutinising the Bill, Sarah Jones, the former shadow housing minister who is now Labour’s fire safety spokesperson, proposed a series of amendments to protect leaseholder rights.

She sought to tighten the “responsible person” concept, deliberately excluding those leaseholders who are not the building owner.

Ms Jones said she had drafted the amendment to disqualify all leaseholders “unless they are also the owner or part owner of the freehold.”

But pushing ahead with her amendment would have unintended consequences, Mr Malthouse said:

“Legislating for the removal of the leaseholder as a ‘responsible person’, or indeed ‘duty holder’, would undermine the principles of the order. It could leave a vacuum when it comes to responsibilities under the order, and therefore compromise fire safety.”

Mr Malthouse did, however, say that he would ask officials to “reflect on the comments” made by MPs.

He promised another consultation.

“I feel like we are being beaten down with consultations, steering groups and promises of honey to come,” Ms Jones replied.

Earlier, after withdrawing another amendment, Ms Jones criticised government for dithering over leasehold reform:

“In my previous role in housing, we had 60 consultations on leasehold reform, yet we still do not have leasehold reform. We need to push this forward.”

She registered her disappointment at the lack of an implementation date in the three-clause Fire Safety Bill.

“There is a lot of uncertainty, and we are putting a lot of faith in the experts and in the Minister to get this done as quickly as possible,” she said.

In other remarks, the Labour politician claimed that government was failing to address leasehold tenure’s underlying problems, which relates to the post-Grenfell fire safety crisis:

“The issue is that the freeholder is the ‘responsible person’, and the leaseholder is the one who has to pay, so there is a problem there.”

Ms Jones had discussed exploitative waking watch fire warden contracts, which were often procured in a monopolistic fashion by freehold owners and managing agents, leading to spiralling service charges for leaseholders.

She raised the issue of regional disparities in the waking watch guidance.

Her amendment, which would have forced the UK Government for England and the Welsh Government “to specify when a waking watch must be in place for buildings with fire safety failures”, was withdrawn after government pressure.

Ms Jones said:

“The National Fire Chiefs Council [NFCC] says that waking watch should be temporary, but there are residents living in blocks that have had a waking watch for nearly three years, at huge cost. I have spoken to leaseholders who are paying £14,000 a year for the waking watch. In one galling case, residents on the block spent £700,000 on waking watch, but when the building was tested, it was found to be safe, so they spent a lot of money collectively for something that they never actually needed in the first place.”

Mr Malthouse confirmed that government is committed to greater transparency over the one-sidedness of some waking watches and will be publishing data on costs shortly.

He said he was “sorry” about the cases of financially compromised cladding leaseholders she had raised, but argued the Labour amendment would “not [be] the best way to achieve what she seeks”.