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| Leasehold property laws in need of sweeping reform, says thinktank | Leasehold property laws in need of sweeping reform, says thinktank |
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| Millions of people in England and Wales are living under "quasi-feudal" leasehold laws which allow them to be exploited by unscrupulous managing agents charging £2.5bn a year, according to a report by the thinktank CentreForum which calls for sweeping reform of the sector. | Millions of people in England and Wales are living under "quasi-feudal" leasehold laws which allow them to be exploited by unscrupulous managing agents charging £2.5bn a year, according to a report by the thinktank CentreForum which calls for sweeping reform of the sector. |
| The study found that tribunal disputes between leaseholders and freeholders have quadrupled in the past decade, with a significant rise in cases involving inflated service charges and the activities of connected companies, such as those that provide buildings insurance. | The study found that tribunal disputes between leaseholders and freeholders have quadrupled in the past decade, with a significant rise in cases involving inflated service charges and the activities of connected companies, such as those that provide buildings insurance. |
| The report's authors, Chris Paterson and Thomas Brooks, said: "At present, freeholders generally have full control over property management. This means that leaseholders, who may own rights to a property for 99 or even 999 years – and therefore have the primary financial and emotional interest in that property – are left to foot the bill while being effectively excluded from its management. | The report's authors, Chris Paterson and Thomas Brooks, said: "At present, freeholders generally have full control over property management. This means that leaseholders, who may own rights to a property for 99 or even 999 years – and therefore have the primary financial and emotional interest in that property – are left to foot the bill while being effectively excluded from its management. |
| "CentreForum believes this frequently gives freeholders little incentive to ensure leaseholders get good value or quality service." | "CentreForum believes this frequently gives freeholders little incentive to ensure leaseholders get good value or quality service." |
| Guardian Money has featured multiple examples of leasehold battles, many involving large, new, city centre developments where residents complain of soaring service charges and poorly managed properties. | Guardian Money has featured multiple examples of leasehold battles, many involving large, new, city centre developments where residents complain of soaring service charges and poorly managed properties. |
| A Dispatches programme to be broadcast on Channel 4 at 8pm tonight features Rona Buretto, who bought her one-bed flat in Hounslow, London, almost 15 years ago. | A Dispatches programme to be broadcast on Channel 4 at 8pm tonight features Rona Buretto, who bought her one-bed flat in Hounslow, London, almost 15 years ago. |
| As one of 70 leaseholders in the block, Buretto's problems began when her service charge started going up. "We started with £700 a year for the flat, but now I'm paying that almost for a quarter." Yet rather than improving, the service provided had, she said, "got much, much worse." Tenants in the block are now taking the managing agents to a leasehold valuation tribunal (LVT). | As one of 70 leaseholders in the block, Buretto's problems began when her service charge started going up. "We started with £700 a year for the flat, but now I'm paying that almost for a quarter." Yet rather than improving, the service provided had, she said, "got much, much worse." Tenants in the block are now taking the managing agents to a leasehold valuation tribunal (LVT). |
| CentreForum argues that a light-touch, independent regulator for leasehold managing agents is essential if the owners of Britain's 2.5m leasehold properties are to be given sufficient protection. | CentreForum argues that a light-touch, independent regulator for leasehold managing agents is essential if the owners of Britain's 2.5m leasehold properties are to be given sufficient protection. |
| It said managing agents should be forced to join an ombudsman scheme and the LVT process reformed, in particular to prevent freeholders from recouping legal costs through service charges. | It said managing agents should be forced to join an ombudsman scheme and the LVT process reformed, in particular to prevent freeholders from recouping legal costs through service charges. |
| CentreForum also called for the threat of forfeiture, which means leaseholders can lose the full value of their property for minor debts, to be removed. Freeholders should also not be able to charge leaseholders who modify their properties, unless it can be provided that the work would reduce its value. | CentreForum also called for the threat of forfeiture, which means leaseholders can lose the full value of their property for minor debts, to be removed. Freeholders should also not be able to charge leaseholders who modify their properties, unless it can be provided that the work would reduce its value. |
| In 2002, "commonhold" was introduced as an alternative to leasehold, but the CentreForum report found it had failed almost completely. "Only 15 developments use this form of ownership despite its significant advantages. This represents a major market failure," CentreForum said. It argued that commonhold should be promoted as an alternative to leasehold, particularly on new developments. | In 2002, "commonhold" was introduced as an alternative to leasehold, but the CentreForum report found it had failed almost completely. "Only 15 developments use this form of ownership despite its significant advantages. This represents a major market failure," CentreForum said. It argued that commonhold should be promoted as an alternative to leasehold, particularly on new developments. |
| Calls for reform of leasehold are finding cross-party support. Conservative MP Sir Peter Bottomley said: "Leaseholders need far greater protection. At present there is legal torture of vulnerable groups including elderly, frail people on limited incomes and often limited life expectancy. Regulation and reform are urgently required. Government and parliament must act." | Calls for reform of leasehold are finding cross-party support. Conservative MP Sir Peter Bottomley said: "Leaseholders need far greater protection. At present there is legal torture of vulnerable groups including elderly, frail people on limited incomes and often limited life expectancy. Regulation and reform are urgently required. Government and parliament must act." |
| Labour MP Barry Gardiner said: "There is a real sense of growing momentum and cross-party consensus on this issue – it is now time to revisit leasehold reform. These proposals would cost the government nothing and would at a stroke transform the lives of millions of leaseholders." | Labour MP Barry Gardiner said: "There is a real sense of growing momentum and cross-party consensus on this issue – it is now time to revisit leasehold reform. These proposals would cost the government nothing and would at a stroke transform the lives of millions of leaseholders." |
| But housing minister Grant Shapps has set himself against reform: "Landlords have a responsibility to act in a socially acceptable manner, but more and more red tape is not the answer." | But housing minister Grant Shapps has set himself against reform: "Landlords have a responsibility to act in a socially acceptable manner, but more and more red tape is not the answer." |
| Shapps said the vast majority of leaseholders were happy with the service they received from their freeholder and that "burdensome legislation" would mean they ended up paying higher costs. | Shapps said the vast majority of leaseholders were happy with the service they received from their freeholder and that "burdensome legislation" would mean they ended up paying higher costs. |
| "Leaseholders have access to free advice from LEASE, which has had its funding secured by this government, and the Leasehold Valuation Tribunal offers an accessible recourse for those who feel any maintenance charges are unacceptable," he said. | "Leaseholders have access to free advice from LEASE, which has had its funding secured by this government, and the Leasehold Valuation Tribunal offers an accessible recourse for those who feel any maintenance charges are unacceptable," he said. |
| Top mortgages | Top mortgages |
| Chelsea Building Society | Chelsea Building Society |
| Yorkshire BS | Yorkshire BS |
| Yorkshire BS | |
| Provided by London & Country for the Guardian | Provided by London & Country for the Guardian |