CA urges government action on leasehold reform
The Conveyancing Association (CA) has urged the government to move “further and faster” in delivering the leasehold reform it has previously promised.
The association outlined a number of measures that the government has yet to action.
These include a fixed maximum fee payable of £200 and delivery within two weeks for the Leasehold Property Enquiry 1 (LPE1) form, and the banning of the sale of leasehold houses.
Another measure outlined was the removal of S.8(2) Law of Property Act from Estate Rent charges, so they cannot be converted to long leases if the rent charge is not paid whether requested or not.
It called for the capping of existing ground rents to the limits in the Housing Act 1988 to prevent long leases becoming assured shorthold tenancies, and a right to extend leases by 990 years and the removal of marriage and development values from the lease enfranchisement calculation.
It also outlined how the Law Commission, in its reports of July 2020 – which were supported by the government – set out the need for those frustrated with their lease administrator to be able to convert their property to commonhold, and take over the management of their shared areas and amenities.
The government has set up a Commonhold Council to look at how this could be delivered to the consumer.
The CA has called for this council to act quickly, particularly as consumers who responded to a CA survey were overwhelmingly in favour of a move to Commonhold, particularly if they had experienced leasehold.
The call follows the Queen’s Speech in May, which contained the Leasehold Reform (Ground Rent) Bill, outlining action to “prevent the practice of onerous and escalating ground rents from affecting future leaseholders”, to ensure that “for the first time ground rents in new residential long leases will have no financial demand” and that “leases will be set in law at a genuine peppercorn level.”
The new legislation would also “introduce new rights for Trading Standards to levy penalties on freeholders of up to £5,000 for breaches of the law.”
Beth Rudolf, director of delivery at the CA, said: “The CA, and many other industry stakeholders, have been urging the government to act on leasehold for the past eight years and, while it was very positive to see the Leasehold Reform Bill make it to the Queen’s Speech, we now need action in a whole host of areas, specifically those measures which have already been announced but have yet to be turned into specific legislation.
“There may be an assumption that while the noise has died down around leasehold a lot, the problems have gone away.
“That is certainly not the case and we now need to maintain the momentum that has been built up and finally get solutions to these problems on the statute book.
“Especially when we are so close and agreement appears to be unanimous right across the industry.
“We can make such a difference to the lives of leaseholders by getting these promises delivered and we are urging the government to move as quickly as it can to do this.
“The Ground Rent Bill is the first step in the right direction but whilst this will prevent new leaseholds being used as an ongoing financial asset class, we still have all of those old leases with onerous lease terms which make them difficult to sell unless thousands of pounds are paid to the landlord to vary them to be acceptable to lending policy – that is simply not right or fair.
“We should be creating a positive home moving experience for all.”