Back in 2006 the Law Commission recommended the total removal of leasehold forfeiture, but the government and its officials have done nothing about it.
Instead, they argue that it is a very minor issue.
So minor, in fact, that last year when the then shadow communities secretary Emma Reynolds asked in a parliamentary question how many cases of forfeiture were granted she was told by MoJ that it would be a waste of resources to find out.
Fortunately, the volunteer resources of LKP have been slightly less ineffectual than the civil service: there were 125 residential leasehold forfeiture cases heard in tribunals in England last year.
Almost half these cases were heard in the London tribunals.
The new housing minister Gavin Barwell, the Conservative MP for Croydon Central, may be curious to know that he represents an area that has averaged two forfeiture cases a year since he was first elected in 2010.
Forfeiture does not work like mortgage repossession. With forfeiture you lose everything.
If you owe more than £350 the lease on your flat can be lost. Completely, along with all capital and whatever mortgage loan there was on it.
Nasrin Qureshi, an investor from the Middle East, lost her £165,000 flat, bought with cash, in April 2013 because she did not pay ground rent and service charges amounting to £3,140
Every professional in the sector will claim that lease forfeiture is rare. Absolutely no one attempts to justify the cash windfall a freeholder can obtain from forfeiture.
An example is the £800,000 flat in Battersea flat of pensioner Dennis Jackson, 73, that was forfeited in 2013 by the freeholder Cube Real Estate, owned by a US private equity outfit.
This was a service charge dispute over £7,000, which through outrageous legal gamesmanship had escalated to £80,000 in legal costs.
The forfeiture took ten minutes in front of a junior judge in Wandsworth County Court.
It required the determined efforts of Sir Peter Bottomley and LKP to get this overturned.
Astonishingly, the decision whether or not to render Mr Jackson destitute and homeless was taken in a closed court. Both Sebastian O’Kelly and Martin Boyd were thrown, principally because the former is a journalist.
The treatment of these two leaseholders over debts was far more draconian than the criminal court’s punishment of mortgage fraudster Mr Waya, whose seed capital in leasehold property was scrupulously returned to him.
Leaseholders do not need any reminding that lease forfeiture is the nuclear weapon in the freeholder’s armoury and it is threatened absolutely routinely in any money dispute.
This is an example from the freeholders’ debt-collecting solicitors called J.B Leitch:
Without prejudice to any action that my client may take concerning the breach of lease, my client will accept the following terms to remedy the breach:
1. You enter into a Deed of Variation with our client;
2. You pay consideration of £705.00;
3. There be an 50% increase of the current ground rent payable;
4. You pay an annual sub-letting fee of £100.00 plus VAT;
5. You pay LPM’s costs of £440.00 inclusive of VAT; and
6. You pay our client’s legal costs of £240.00 inclusive of VAT.
Should you fail to admit the breach, or the above terms are unacceptable to you, please note that my client will issue proceedings in the county court to seek a declaration that the lease is in breach as a pre-requisite to forfeiture proceedings being instigated in respect of your leasehold interest in the property.
Lawyers and officials may argue that leaseholders have rights, and that such a demand can be disputed in the courts. But those in-the-know know that the dice are stacked in just one direction.
There is a 99 per cent chance the lease will give only the freeholder the right to all his legal costs no matter what the result, and the courts will give a 99.9 per cent+ chance that the leaseholders will have no right to their costs even if they win.
One of Mr Barwell’s early tasks will be to sign off the privatisation of the Leasehold Advisory Service.
This is greatly to be welcomed.
One of the paid-for courses offered by this government quango, set up with taxpayers’ money to protect leaseholders, includes advising freeholders and managing agents about “Forfeiture of the lease”.
In effect, the quango has been selling training to freeholders on how to forfeit a lease, while simultaneously offering free initial advice to leaseholders how to avoid having their leases forfeited.
It is long overdue that the Leasehold Advisory Service takes its chances in the commercial world.