The housing division has launched a session on the “feudal” leasehold system to make administration fees clear and drive property managers to qualify as professionals for the primary time.
The session will feed into secondary laws that will likely be added to the Leasehold and Freehold Reform Act 2024, which standardised fees the 5 million leaseholders in England and Wales.
The division provides it’s also dedicated to publishing a draft Leasehold and Commonhold Reform Bill “later this yr,” which goals to “reinvigorate” the commonhold system and “may even embody a variety of different important reforms to the leasehold system”.
Minister for housing and planning Matthew Pennycook says the lives of leaseholders are “marked by an intermittent, if not fixed, battle with punitive and escalating floor rents; unjustified permissions and administration fees; unreasonable or extortionate fees; and onerous situations imposed with little or no session”.
He provides: “The authorities is dedicated to bringing the feudal leasehold system to an finish and we’re progressing the broader set of reforms obligatory to take action.”
The present session will run for 12 weeks till 26 September.
Fee transparency – An annual report which units out the small print of what leaseholders are paying for and gives different key info for the yr forward, together with superior discover of deliberate main works
Reforming authorized prices – Currently, landlords “usually have a bonus” in that many leases will permit them to recuperate their litigation prices incurred throughout authorized proceedings from leaseholders, regardless of the result of the dispute
Major works – It will search views on making the use of a reserve fund obligatory for brand spanking new and current leases
Major works session — It will search views on the monetary threshold at which landlords should seek the advice of leaseholders and be certain that undertaking prices are made clear
Fixed service fees — It will search views on whether or not these paying fastened service fees ought to have additional protections, resembling giving them the identical proper to problem the “reasonableness” of their service cost loved by those that pay variable service fees
Managing brokers – The division says there may be an “overwhelming case” for obligatory skilled {qualifications} for these brokers in England. It favours that each one particular person managing brokers and managing agent companies should be part of an expert physique, and will need to have, or be working in direction of, a minimal qualification to hitch the physique.
Lease chairman Martin Boyd says: “The present system favours landlords. Leaseholders face complicated and usually opaque programs when making an attempt to boost considerations and have little actual energy to carry managing brokers to account.
“With no direct obligation to these footing the invoice, some brokers act with impunity. Leaseholders commonly report unacceptable behaviour, starting from aggressive conduct to outright abuse.
“Any motion that enhances transparency to rebalance energy in the case of addressing considerations and inaction will likely be welcomed by owners.”
