Roger Southam, the controversial chairman of the Leasehold Advisory Service, told the BBC today that it was not the quango’s job to alert ministers to the leasehold houses scandal.
Mr Southam said that LEASE was not a lobbying organisation and that it was tasked with giving impartial advice to all in the sector.
Asked why the Leasehold Advisory Service did not step in to prevent developers selling houses and flats with doubling ground rents which are now unsellable, Mr Southam said that was not LEASE’s remit.
“So, this wasn’t one for you?” asked Winifred Robinson, on the BBC R4 You & Yours programme.
Roger Southam replied: “At that point in time, no.”
The interview followed a report about Cath Williams, a Taylor Wimpey leasehold house owner of a £150,000 property in Ellesmere Port who is caught up in the doubling ground rent scandal.
Miss Williams, who only enjoyed five years on the “low” £295 a year ground rents, is facing £590 a year to the anonymous investor owners of her freehold.
She is one of the founders of the National Leasehold Campaign Facebook group, which has more than 3,000 members and which will be addressing the All Party Group on leasehold reform on April 19.
Labour MP Jim Fitzpatrick, APPG joint chairman and a patron of the Leasehold Knowledge Partnership, told the programme that there were now more than 70 members of the APPG.
He has told the housing minister Gavin Barwell:
“The APPG is still very concerned by some of the practices of LEASE and do not believe the organisation is working in the best interests of leaseholders who require help across the country.”
Winifred Robinson then asked Roger Southam in a live interview why the Leasehold Advisory Service has been inactive over the leasehold houses scandal.
“But you did not spot this growing did you? And you did not nip it in the bud? You did not say to developers, who you advise in your seminars, that this is a bit dodgy? That’s a bit difficult for the people who buy these homes and who are now unable to sell them on.
“Right, we are not there for lobbying. We don’t give advice –“
“You are there for advice. You are an advisory service.”
“Yes, but developers don’t come to us.”
“Property managers come to you, don’t they?”
“Yes, but property managers don’t get involved in the development process and don’t get involved in the fixing of the ground rent.”
“So, this wasn’t one for you?”
“At that point in time, no.
In fact, Mr Southam, former owner of Chainbow, is one property manager who has got involved in ground rent issues, offering his services to freeholders to “maximise ground rent opportunities”.
Mr Southam made a distinction between the Leasehold Advisory Service’s previous passive role, and its instruction in February by housing minister Gavin Barwell:
“To be solely, and unapologetically, on their [leaseholders’] side.”
Mr Barwell also promised sufficient funding for the organisation to free it from offering paid-for courses to freeholders and their advisors, some of which have been described as “dodgy” by veteran MP Sir Peter Bottomley.
‘If I fail to offend anyone, I will do it next time,’ Bottomley tells appalled leasehold professionals at LEASE annual conference
Mr Southam said: “There is a lot that has been said and written, and put out into the public domain, that is completely misleading to people.”
He added: “ In terms of our change going forward, we’ll see how we manage with DCLG and we’ll see the shape of the organisation. And I hope the shape of the organisation will look that we can be active in lobbying, we can be active in marketing and working in the best interest of the leaseholders.”
LKP is to contact Lord Young, formerly the Tory MP Sir George Young, who set up the Leasehold Advisory Service in 1992, to establish whether this extreme passive role of the quango was what was envisaged.
LKP will also contact former CEO Peter Haler, who established the organisation and was known for a robust interventionist approach to leasehold controversies.
In February, MP Justin Madders asked the housing minister in the Commons:
“In order to regain leaseholders’ confidence, will Ministers agree to an urgent review into the suitability of Mr Southam to continue as chair?”
MP Justin Madders questions role of Roger Southam as LEASE chair
The programme can be heard here:
The full transcript of Roger Southam’s interview with Winifred Robinson can be read below:
Right, I think we need to unpick some things to start with. The leasehold Advisory Service was set up in 1992 off the back of the Enfranchise Act which came in in the same year. It was there as advisory service. It has never been there as a lobby organisation.
But, nonetheless, you are in receipt of public money to advise leaseholders and this disaster unfolded on your watch.
There is a lot that has been said and written, and put out into the public domain, that is completely misleading to people. I need to explain to people where we are coming from, what we’re doing and what is changing. I will get to that point, but I do need to, please, to set the scene.
So, in terms of the advisory service we have historically been there for all parties, be they leaseholders or property managers etc to give advice and guidance and try to improve and professionalise the marketplace.
In terms of where we are now, in February the housing minister announced that there would be a change in our remit and we would be there solely for the benefit of leaseholder.
It is only now that the chief exec is in discussion with DCLG over that change.
So, in terms of commercial activity, in what the housing minister announced in February, that has made a change to us and our remit. While I was brought in as chairman two and a half years ago, the remit was to go down a commercial route to actually fund to give free advisory services to leaseholders, but gain the commercial funding.
There was a remit and that’s what we have been working. That is now changing, and I’m pleased to say that we are getting funding from the government. We can stop the commercial activity, and that will allow us to focus only on the leaseholders.
But you have always had some government funding ,haven’t you?
We have had government funding, indeed. But the remit of free advice to leaseholders, which we have always given, we will always give – and we have been handling about a million Leaseholders a year in advice online and on the phone –
But you did not spot this growing did you? And you did not nip it in the bud? You did not say to developers, who you advise in your seminars, that this is a bit dodgy? A bit difficult for the people who buy these homes and be unable to sell them on.
Right, we are not there for lobbying. We don’t give advice –
You are there for advice. You are an advisory service.
Yes, but developers don’t come to us.
Property managers come to you, don’t they?
Yes, but property managers don’t get involved in the development process and don’t get involved in the fixing of the ground rent.
So, this wasn’t one for you?
At that point in time, no. In terms of how we sit.
Now, in terms of our change going forward, we’ll see how we manage with DCLG and we’ll see the shape of the organisation. And I hope the shape of the organisation will look that we can be active in lobbying, we can be active in marketing and working in the best interest of the leaseholders.
To answer one point, there are leaseholders and there have been leaseholders on the board. I am actually a leaseholder myself and I am actually in Jim’s constituency, and he well knows I am a leaseholder. So it is a bit rich, perhaps I am the wrong sort of leaseholder …
That is not the same, is it, that an individual happens to own a lease? That is not the same as putting a representative body on your board. There are active representative bodies who do good quality research and lobbying. Should you not have had one of them?
Right, Winifred, then we are on a different coordinate again. In terms of an arms length body, there are very set criteria across government, that Jim will well know, of how arms’ length bodies boards are picked and chosen. They do not have any representative bodies in any shape or form on any of them.
So, in terms of how the board operates, the board is there working under the seven Nolan principles. We operated rigorously and studiously to those principles. We care passionately about what we do. We have a fantastic chief executive and a fantastic team at the Leasehold Advisory Service and over the 21 years we have been giving great advice and we will continue to.
As tempting as it may be to withhold or pay ground rent payments into a holding account, leaseholders would be making themselves very vulnerable if they did.
Late payment charges would be added to the lease and if challenged a court/tribunal could only abide by the actual terms of the lease in coming to a judgement .ie,”Does the lease provide for payment of ground rent?”
A bit more convoluted I know, is to make payment direct to the named freeholder.
Pay by cheque and mark the cheque “strictly account payee only”
As an example a leaseholder may get a ground rent demand from Homeground on behalf of Adriatic (no 6). You are asked to make payments to Homeground.
Instead make the cheque payable to Adriatic(no 6).
The leaseholder has thus complied with the terms of the lease, so can’t have charges added or be sued , but if the freeholding company is listed as being dormant they cannot cash the cheque without giving up there dormant status.
If your cheque is cashed, the next step is to find out from your bank who cashed the cheque?
If it was Homeground that cashed a cheque payable to Adriatic(no 6), you can complain to the bank that the payment is subject to fraud due to the bank accepting a payment from a customer who had no entitlement to it. You could also contact HMRC about this as well..
MH I think at the very least 200 plus protestors waving placards and politely SHOUTING for Mr Southam to go ,will have some effect.
Mr Epstein your solution re GR payment seems close to sheer genius.
I appreciate that withholding payment by a leaseholder could lead to legal action.
If the payment cheques were made out to the freeholder, in full and sent on time to a holding account would this be a criminal offence.
After all, in the past Price Fixing by a management company has been deemed not to be.
Is there a brave (leaseholder friendly) organisation out there who would be prepared to take this on, hold these payments and confront any legal challenge that may arise.
Failing this, after 7 years of trying alternatives, I cannot think of any other way that will bring a quick result.
Unless of course the generosity of a TW offer in the next few days starts the ball rolling.
Do you recall Parliamentary Motion 342,in 2005 regarding Estates & Management?
Many MP’s expressed their concern that Estates & Management were deliberately not cashing cheque payments they had received in order to generate late payment fees.
Mr Epstein, I cannot disagree with your comments on any level. I hope one day that I will be able to if only for healthy debate ( from my perspective )Terribly pedestrian to agree all the time. Don’t you agree?
Kim, Theft in lifts.. Do you agree that is wrong on every level?
Well that depends on who enters the lift . what I mean is that if Bow Tie wearers entering the lift are then subject to theft .having to hand over a valuable possession on each floor- Not Wrong on any level. In my humble opinion…..
I have written to each of the three main parties, asking them if they will include something on leasehold reform in their manifesto.
I have listed most of the problems and unfair practises and informed them that there are hundreds of thousands of leaseholders looking for change. Surely it must on balance be a vote winner. I will give a brief summary of any replies I receive, but would encourage other campaigners to do the same.
I must admit I do not have much hope for improvement in the short term.
Unless Sir Peter is appointed Housing Minister or maybe Jeremy Corbin Prime Minister. Both non starters.
I would be very interested to hear everyones response, – we have to keep going till we get meaningful reform or abolition.
Yes, I’m aware Londoners are mostly remainers, I merely want to make the point that leasehold is part and parcel of some of some horrible levels of inequality which are reckoned to have contributed to other political developments and perceptions of a rigged economy. I doubt Londoners would vote to retain leasehold given a choice, but parliament is in the control of one party which receives large amounts of money from large freeholders. For now I decline to believe any Conservative who talks about a country that works for everyone. Leasehold injustice affects millions of people but this has only just begun to be reflected in the media, still largely billionaire-controlled.
I remain very grateful to the late Nigel Wilkins and those he persuaded in the Labour Party to introduce that last set of reforms in the Commonhold and Leasehold Reform Act in 2002. If only they’d gone a bit further and blocked new leasehold and facilitated buying out of freeholds.
Such a shame Cameron did not put forward a referendum for leasehold instead. I’d love to see ‘the will of the people ‘ in action. ‘Taking control of our laws ‘ is another favourite, – – we can’t even control our managing agent.