Lambeth Homeowners Association and PRERA met with our local MP Steve Reed on the 7th of April to discuss the Leasehold reform currently in consultation.
Leasehold reform refers to recent and proposed government legislation in England and Wales aimed at improving the rights and protections of leaseholders, making it easier and cheaper for them to purchase their freehold or extend their lease.
LHA brought detailed suggestions for amendment for submission to the drafters of the new legislation. One particular aspect that we wanted to discuss was the way current legislation is heavily weighted in favour of landlords. They also brought a background note which they had sent to a number of MPs (see additional notes below).
Dear Steve,
Many thanks for meeting us last Monday. We are grateful to you for your offer of support over the upcoming Leasehold and Commonhold Reform Bill. This is a matter that concerns leaseholders in the whole country.
To reiterate our two priorities in this, we would be grateful if you could bring to Matther Pennycook’s attention the following:
- Non-Disclosure Agreements: These are imposed by landlords when settling cases where one or more leaseholders on an estate succeed in negotiating a substantial rebate from a major works bill, often well into 5 figures. The NDA prevents them from informing neighbours that they also could claim a rebate. These settlements are reached out of court to avoid publicity, not least of the amounts where councils themselves have been overcharged for major works to tenanted properties.
- As part of that, where landlords have been shown to have overcharged, they should, as a matter of course, offer equivalent rebates to those who have not claimed. These people will usually be old and vulnerable, or young first-time buyers without the knowhow to appeal.
- Proof of reasonableness of service charges: In the present setup, leaseholders challenging service charges have to provide proof that they are not reasonable. Where a landlord withholds information, this can be a very costly and time-consuming process involving quantity surveyors and solicitors. As in any other business, the burden of proof of reasonableness should be on the landlord, so that if they cannot justify their invoices they should not be payable.
These are our basic points in principle. We would welcome the opportunity to provide detailed input at the consultancy stage later in the year and request that we be put on the list for consultation.
Best regards,
Antony Wynn
Chair
Lambeth Homeowners Association
Additional Notes
Key legislation and proposals
- Leasehold Reform (Ground Rent) Act 2022: This act has already banned ground rents for most new residential leasehold properties, meaning a leaseholder’s new lease will have a “peppercorn” ground rent (or none at all).
- Leasehold and Freehold Reform Act 2024: This act is part of the government’s broader reforms to make it easier and cheaper for leaseholders to buy their freehold, as well as increasing standard lease extension terms.