And two-thirds of leaseholders don’t feel they get a good service from their managing agent
These are two of the results of the survey of leaseholders – and RMC directors –by the Leasehold Advisory Service.
According to the LEASE website, the leasehold survey “is a tool designed to support the sector and not a commercial or business development initiative”.
In total, 1,244 leaseholders took part, including 200 RMC directors.
LEASE says:
“The survey has made a number of alarming discoveries – the vast majority (68%) of leaseholders have little or no confidence in the ability of their managing agent to deal with a problem or dispute, with just 6% being ‘very confident’ their agents would act effectively and efficiently to resolve it.
“Poor communication between managing agents and leaseholders is a real threat to enjoyment of a leasehold property, according to the survey, a problem exacerbated when the lack of clarity and information creates mistrust.
“Furthermore, this is leading to leaseholders feeling they have very little opportunity to be involved in the management of the property, and that they want more democratic decision-making with a greater say on how their service charge is spent in particular.”
Of crucial importance were the views of RMC directors.
The LEASE chairman Roger Southam has stated that after manning the advice lines he was struck by the number of complaints from RMCs, RTMs and where the freehold was owned by the leaseholders.
He wrote in News on the Block in April:
“… from the phone sessions I discovered that a number of the callers were leaseholders who owned their freeholds. This was interesting because I had long thought that owning the freehold as a leaseholder was the panacea that would give the controls and access that is the holy grail.”
The Competition and Markets Authority has already established that RMC / RTM blocks are more harmonious than freeholder-imposed management.
The leasehold survey found:
“RMC directors are generally happier with their leasehold properties than ‘ordinary’ leaseholders due to a greater sense of control over the property’s management.”
The key findings of the leasehold survey were:
- Just 6% of leaseholders are very confident the managing agent could resolve issues.
- 68% of leaseholders have little or no confidence that their managing agent could resolve issues efficiently and effectively.
- 51% of leaseholders see a change in managing agent would improve matters and benefit the block.
- 1 in 5 leaseholders are unaware they could replace a poorly performing managing agent.
- 55% of leaseholders consider changing managing agents would be a difficult process.
- 48% of leaseholders believe a lack of knowledge is a real barrier to changing managing agents.
- 40% of leaseholders strongly disagree that service charge is value for money.
- 62% of leaseholders say the service hasn’t improved in the last two years.
- 55% of leaseholders know where to go for information, but 32% definitely do not.
- 52% of leaseholders are confident they know their rights and responsibilities.
The leasehold survey also identified that “one of the biggest challenges facing the sector is finding leaseholders willing to take-on the role of RMC director”. There is “a clear polarisation in viewpoints – split between those who find the role strongly rewarding versus those who find it challenging”.
LKP rather doubts whether any of the prime London sites with RMCs, with whom it has regular dealings, took part in the leasehold survey at all.
It was farmed out to Nottingham based Brady Solicitors, which specialises in pursuing debt and advising freeholders on maximising ground rent incomes. LKP advised RMC directors and leaseholders not to participate
Disputes in prime London can involve hundreds of thousands and even millions of pounds, and there is little incentive for directors, who are often professionally distinguished, to share their views in a leasehold survey such as this.
Anthony Essien, LEASE chief executive, said: “The findings will update the sector, including Government, on current sentiment around leasehold management, to continue to inform the debate around raising standards, and we will look to assist leaseholders and RMC Directors with the educational needs identified in the survey.”
Related posts:
LEASE uses debt-collecting Brady Solicitors for leaseholder survey
LKP analysis of the LEASE/Brady solicitors leaseholder survey 2016
Leaseholders need ‘counselling and relationship advice’, says LEASE chair Dr Sigmund Southam
Is this LEASE being ‘unapologetically on the side of leaseholders’, Mr Barwell?
LKP and LEASE thank DCLG civil servant for helping leaseholders
Galliard introduces ‘exit if we Brexit’ clause to homebuyers … but what about exit when you finally see the lease?
“55% of leaseholders know where to go for information, but 32% definitely do not.
52% of leaseholders are confident they know their rights and responsibilities.”
These percentages are from those leaseholders who took the survey, so basically already reasonably knowledgeable on LEASE issues. The majority are blissfully unaware of what machinations may be going on.
Managing agents need licensing and strict regulation, as well as amending the law for proper enforcement to take place. Managing agents also need to be truly independent of the freeholder, otherwise the system remains a feudal one.
LKP will be producing a comment piece by the end of the weekend and it should not be assumed the LEASE/Brady survey is an accurate piece of work.
As leaseholder points out the comment about the knowledge of lease issues is highly unreliable as these are a self selecting group who are more likley to be aware of the issues.
Why don’t you conduct your own survey? I ‘d be happy to publish it and get it our there!
Dear Sharon,
A proper leasehold survey conducted by those who aren’t employed in the sector is a good idea.
It is a question of resources: we don’t have many.
If we can get the co-operation of others, it is something that we would consider doing.
However, even this LEASE survey has hardly come up with a ringing endorsement of leasehold.
The message to policymakers is clear: this is a problematic area of the housing market that is in need of reform.
All the best, Sebastian
I would happily take part in LKP survey as our estate is full of leaseholders forced to accept Peverel/Firstport as mismanagement agents
The LEASE survey was conducted by a non-independant commercial entity – Brady Solicitor’s.
Brady’s now include pictures/quotes on their website as if Roger Southam colludes with them.
The reported 1,244 leaseholders out of 4.1 Million leaseholders (0.003 %) is hardly statistically significant – in fact downright misleading. Why did LEASE choose a commercial legal firm
with a bias to landlords/managing agents when LEASE already use a professional survey firm iPerceptions? I am a director of a Right to Manage Company
Pat says:
I am one of the 57%. The terrible thing is that 40% of all new builds are leasehold properties – a licence for Freeholders/Managing Agents to print money.
And of course the situation is set to get much worse as the curse of leasehold is extended to formerly sold as freehold houses for no other purpose than to exploit homeowners. to the benefit of corrupt developers/managing agents.
Did you take part in the survey? In London there is no real choice, is either leasehold or renting. (not a lot of difference,in the eyes off the law leaseholders are tenants) the housing shortage should spur the law makers into action, strengthening the rights of leaseholders and taxing ‘professional’ freeholders ( ie anyone making money from ground rent, however seemingly small amounts. )accordingly. Enforcement and strict regulation is only the beginning – but we need to get it going.