The housing division has launched a consultation on the “feudal” leasehold system to make administration fees clear and pressure property managers to qualify as professionals for the primary time.
The consultation will feed into secondary laws that will likely be added to the Leasehold and Freehold Reform Act 2024, which standardised expenses the 5 million leaseholders in England and Wales.
The division provides additionally it is dedicated to publishing a draft Leasehold and Commonhold Reform Bill “later this yr,” which goals to “reinvigorate” the commonhold system and “will even embody a spread 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, wrestle with punitive and escalating floor rents; unjustified permissions and administration fees; unreasonable or extortionate expenses; and onerous circumstances imposed with little or no consultation”.
He provides: “The authorities is dedicated to bringing the feudal leasehold system to an finish and we’re progressing the broader set of reforms needed to take action.”
The present consultation will run for 12 weeks till 26 September.
Key proposals embody:
Fee transparency – An annual report which units out the small print of what leaseholders are paying for and gives different key data 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 enable them to get well their litigation prices incurred throughout authorized proceedings from leaseholders, whatever the final result of the dispute
Major works – It will search views on making using a reserve fund necessary for brand spanking new and current leases
Major works consultation — It will search views on the monetary threshold at which landlords should seek the advice of leaseholders and be sure that venture prices are made clear
Fixed service expenses — It will search views on whether or not these paying mounted service expenses ought to have additional protections, akin to giving them the identical proper to problem the “reasonableness” of their service cost loved by those that pay variable service expenses
Managing brokers – The division says there’s an “overwhelming case” for necessary skilled {qualifications} for these brokers in England. It favours that every one particular person managing brokers and managing agent companies should be a part of an expert physique, and should have, or be working in direction of, a minimal qualification to affix the physique.
Lease chairman Martin Boyd says: “The present system favours landlords. Leaseholders face advanced and usually opaque techniques 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 usually 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 householders.”
