The Conveyancing Association says it is going to deliver a “full and frank” response to Sajid Javid’s consultation on the leasehold sector.
“It’s clear that we want to move away from leasehold being used purely as a motive to generate income, and produce ever-increasing profits for whoever might own the freehold,” writes Eddie Goldsmith, the Conveyancing Association chairman.
Commonhold, which has been on the statute book since 2002, needs to be reviewed “with a view to it replacing all leasehold with a working commonhold proposition, rather than a simple watering down of leasehold that some are already calling ‘fleecehold’.”
“At the moment, with Commonhold, we are simply unsure whether it will work or not because developers don’t use it – the reason being there is no value retained for the developer from it, and that perhaps tells you why there are only 175 commonholds in England.”
Conveyancing Association responds to Government proposals on unfair leasehold practices – Today’s Conveyancer
The Government’s open consultation on leasehold, entitled ‘Tackling unfair practices in the leasehold market’, has only a month to run …
LKP raised the issue of successful commonhold citing the example of Spire View in Pickering, in North Yorkshire – that is if examples in the rest of the world (including Scotland) are insufficient.
Spire View featured in the Sunday Times in an article by LKP trustee Sebastian O’Kelly in July:
“If commonhold isn’t deemed an adequate solution and the Government persists with leasehold then it’s our view that we should require some substantial improvements. For example, leasehold should only be applicable where there are genuine shared amenities, the term of the lease should be 999 years with peppercorn ground rent, and all administration fees must be based on a reasonable fee tariff with access to a redress scheme if the lease administrator attempts to charge unreasonable fees or does not respond within five working days of a request,” Mr Goldsmith writes.
The Conveyancing Association has been a robust critic of the fee-mongering, complexities and delays involved in transacting leasehold properties.
Housebuilder Bob Bessell says ‘no justification for ground rents at all’
Related posts:
Conveyancing Association’s ‘Dirty Dozen’ questions buyers of leasehold need to ask
Leasehold sales are bedevilled with ‘extortionate’ charges and game-playing, says the Conveyancing Association
Conveyancing Association’s Beth Rudolf attacks the HomeOwners Alliance for ‘scaremongering’ over leasehold
Conveyancing Association snubbed over bid to make freeholders join a redress scheme
98% of rip-off lease sales broke consumer protection rules, says Conveyancing Association
I have been looking into Commonhold but it seems to be an uncertain prospect.
We don’t have an RMC and we have mixed tenure so no go on RTM either.
We thought about buying the Freehold to gain direction over the Managing Agent but then we found out that the Company we pay ground rent to is not the Freeholder.
So in between the Freeholder and us is a Head Leaseholder who leased to the leaseholders for 150 years.
Can we force them to sell us the Head Leasehold in the same way we may enfranchise the freehold?
Can I just say that any reform must have as a top priority sorting out the unholy and unregulated mess of ‘professional’ managing agents.
I dunno enough about commonhold…intend a crammer in coming days…but I’m assuming there will always be a catch 22: do ‘leaseholders’ or unit holders self-manage or appoint a ‘professional’ agent?
Existing law is stuffed with gotchas for self-managing, including the way leases are worded to expressly permit charging for an agent’s management fee but little clarity on what the self-managed RMC or RTM can charge.
It seems absurd that lessees can be milked for commissions on insurances etc perfectly legally, but an RTMC cannot charge even the paltry cost of D&O insurance by which it- the RTMC- can by its existence slash insurance costs in half. We saved well over £2K a year just on insurance.
Managing agents almost ALL seem to me to be unable to act either with basic competence or simply don’t care. I have experienced six of the breed who not one proved reliable, and responded to many posts on a forum about others.
No matter how you pin them down in a contract they seem with depressing predictability to go rogue almost as soon as the contract is signed. The ‘professional’ advice is so poor or cavalier you have to advise them while paying them for their service – this includes the so-called ‘RTM experts’. I’m assuming the leaseholders who appoint these people are so ill-informed it is the blind leading the unsighted?
They, as far as I can see, face no comeback if the RMC or RTMC follows their advice into disaster. They do not pay the legal costs.
They are all an unregulated shower in my view. And as for the so-called codes of ‘best’ practice. They are a bigger shower.
(I submitted a slightly less crazed set of arguments to the consultation).
Hear hear!! I cannot agree more. It is bandit country out there in the world of ‘ Professional Managing Agents’. There must be Statutory Regulation of these so called ‘Professionals ‘ and I have made that very clear in my correspondence to The Rt Hon Sajid Javid.
I ve tried to get some sense out of the freeholders managing agents who are blighting our house. Checking company house, a maize of directorships and resigned directorships end associated companies enough to give an ordinary leaseholder a migraine. I think even HMRC has stopped bothering to track them down. They hardly ever seem to file accounts and gazette strike off is like bread and butter.
These so called “managing agents’ are not answerable to anyone and yet they control our homes, they take our money and God only knows what they do with it. ( certain,y not repairs) they probably use out money to buy other flats to rent out to more unfortunate tenants. This perpetuates a cycle of misery with ever more expensive and poorer quality homes. Who benefits from this, is very much liketo know.
Leasehold reform have you got your fellow leaseholders on side?
I suggest you all get together re -read your leases & The Landlord & Tenant act 1985 s22 ( I think) Your freeholder and Managing Agent are obliged to allow access to accounts, invoices , receipts and vouchers relating to the Service Charge -IT IS THE LAW!
In all probability the freeholder owns the managing agents co and you are being ripped off.
Are you requesting and receiving the annual building insurance schedule? You are probably being charged for insurance premiums where no such insurance has been placed. This practice is widespread amongst certain ‘ Management Co in residential property.
The ‘DIRTY TRICKS ‘ of BAD Managing Agents.
1. Overcharging
2 Setting up and using their own companies to carry out expensive and sometimes unnecessary works of repair.
3. Charging on false invoices
4. Colluding with Insurance brokers in a fraudulent way.
5. Sending emails and correspondence to the wrong address deliberately.
6. Persecuting guillable and aged tenants into making inappropriate payments e.g. for expensive and unnecessary repairs classed as urgent and backed up by spurious recommendations that turn out to be totally unnecessary.
7. Threatening forfeiture when bogus bills remain unpaid.
The above practices have become routine and commonplace amongst certain agents acting for Freehold companies that have grown large over the last few years off the back of Freehold residential acquisitions and now seek to profit through charging excessive service costs.
This Government must bring in Formal Regulation of Managing Agents. Without Delay!
In addition to my previous post:
I refer you to the case of ‘City Heights’ Nottingham where the beleaguered leaseholders junked their ‘Managers’s and won back £ 202,000 pounds ( yes really) that had been effectively nicked from them through that old favourite mechanism of ‘OVERCHARGING’! The ‘Junked managers were that ole favourite ‘SOLITAIRE MANAGEMENT’!
I also refer you to ‘Romneycourt
!The Conveyancing Association (solicitors) have been robust critics of leasehold”, The mind does boggle and one is gobsmacked that a professional body (representing solicitors) with a pecuniary interest in leasehold is a robust critic of leasehold. Progress indeed.
“For example, leasehold should only be applicable where there are genuine shared amenities, the term of the lease should be 999 years with peppercorn ground rent, and all administration fees must be based on a reasonable fee tariff with access to a redress scheme if the lease administrator attempts to charge unreasonable fees or does not respond within five working days of a request,” Mr Goldsmith writes.” – This is said on the basis that common hold is ruled out as inadequate. Not being informed on common hold I shouldn’t comment, nevertheless I will; why exactly can’t common hold be made to work?
Whatever, I have no problems with opening statement in this quote (in fact I agree completely with it), this would mean only in exceptional circumstances would a house be sold on a leasehold basis. “Lease administrator”, why should there be such an administrator with the capacity to screw leaseholders if the correct thing happens and only apartment owners have a share of the lease?
I am more hopeful that things are going to be sorted, Sebastian deserves a knighthood. But better Sebastian refuses to accept such an honour from our corrupt elite.
Kim, MJ, ME, Olly, Stephen et al- please see under posting on breach of Right of First Refusal in “Business Insider…” August 15.
the charity C.A.R.L had a simple.clear 5.proposal plan to end abuse of leasehold home buyers/owners: 1. convert ALL leaseholds to freeholds (houses) or common hold(flats). 2. Abolish property tribunal system and replace by ombudsman scheme. 3. set up a specialised property crime unit made of tax law specialists and forensic accountants. 4. put property transactions out of hands of private law firms and in hands of government appointed/controlled lawyers. 5. standardise all resiidential property sale contracts.
C.A.R.L seemed to have the right idea. Nothing not to like about their proposal to end the abuse of leaseholders. Hopefully the end is nigh for the nefarious and downright criminal acts Freeholders, their crooked managing agents, puppet surveyors and last but not least their shady solicitors.
Taylor Wimpey are advertising flats for sale in a new development ‘ The Edge’ Brixton cost £460-£720 for 1-2-3 bed flats. Their blurb screams ” PLOT 1 .Reserve This week and receive stamp duty paid worth £13,000″. No information relating to ground rent etc. I shall contact the sales team tomorrow on 0203 897 4811 and silkily ask for the ‘devil in the detail’
I am lucky enough to own a house in Dulwich and Helen Hayes is my local MP who is also a leasehold reform APPG member. I shall furnish her with the details of my interaction with TW sales team at ‘The Edge’. ( wonder if they play U2 when I am on hold)
I will also post on LKP anything worthwhile re my investigation……..