Conveyancing groups have presented a list of proposals on reforming leaseholds to the new housing minister Alok Sharma and the Law Commission.
The document, compiled by the Legal Sector Group, consisting of the Conveyancing Association, Chartered Institute of Legal Executives, Bold Legal Group and The Society of Licensed Conveyancers, is aimed at reducing the abuse of leasehold and speeding up the conveyancing process in these transactions.
It proposes “reasonable fees” and timescales for administrative activities, with a tariff of fees for quantifiable activities set by either the RICS or the Government.
The document also calls for all freehold management or leasehold administrators to be part of a redress scheme and to operate reserve funds, as well as a requirement to shop around for buildings insurance.
Addressing the controversial issue of ground rents and leasehold renewals, it says no new-build should have an initial lease term of less than 250 years and rent reviews clauses should allow for an increase of no more than 50% or the difference in the retail price index each 10 years, whichever is smaller.
It also proposes that leaseholders have the automatic right to manage and acquire the freehold where a landlord has become absent, and says existing leases with unfair terms around escalating ground rents or unreasonable fees should retrospectively be made fair.
Beth Rudolf, director of delivery at the Conveyancing Association, said: “We are now urging the powers that be to put in place a programme of change in order to provide both sellers and buyers of leasehold property with certainty, peace of mind, reasonable costs and a much greater degree of clarity in terms of what they are signing up to, and the responsibilities that are shared amongst those involved in their leasehold property.”
Rob Hailstone, founder of Bold, said: “These proposals are much needed and if introduced will help the home buying and selling public and conveyancers in a number of ways.”
Comments (5)
Peter, your scepticism may be justified but there is already an all party parliamentary group campaigning for leasehold reform which has widespread support from the three main parties. The emphasis in their case is on leasehold houses with doubling ground rents, but there must be a good chance that other problems and defects in leasehold titles can be incorporated into this bill.
Sir Peter Bottomley (Conservative), Sir Ed Davey (LibDem) and Jim Fitzpatrick and Justin Madders (both Labour) are in this group and the issue has been widely reported in the media.
More info on this site:
http://www.leaseholdknowledge.com/mortgage-lenders-conveyancers-lay-bare-rot-leasehold-mps
The problem of course is brexit…
The so called Legal Sector Group is not a group that was consciously set up, nor is it a group that is asking for a membership fee. It is a possibly temporary collective of existing groups or associations that currently have a common cause, leasehold issues. I certainly haven’t signed up to or paid for anything.
I 100% agree with you about leasehold issues – we face these daily. However, groups of people meeting and agreeing “paths” and “recommendations” unfortunately will have minimal impact.
The change has to be implemented in law driven by political gain.
Example. Personal search agents had for years bandied together to break what they considered as anti competitive practices by local authorities on fees. The change only came about when HIPS came in and local authority performance came under the politicians spotlight as it was threatening to undermine the programme.
Interestingly, if HIPS hadn’t been the victim of (again) political machinations then this issue of leasehold management company performance would have also been addressed.
I support idealistic thinking, living in hope that the outrageous consumer exploitation that are lawyer panels will be outlawed – but let’s face it – who is going to listen to this naive idealist?
Peter, your cynical attitude is really disappointing…… these leasehold issues are massive, and getting worse by the week, with more leases falling below the minimum term lenders require, and delays caused by unregulated management companies.
I think this combo has a lot of credibility, and firm proposals too…. Estate Agents should be backing this campaign 100%.
You know, I was just thinking that what the property industry needs is a new group so I’m delighted to see that the Legal Sector Group has been setup.
Their platitudes and representations will no doubt be welcomed by housing ministers and estate agents alike.
I guess the natural progression will be a combined agent and legal group. Surely there must be some people out there with way too much time on their hands who would want to set up THAT nice little talking shop.
Could someone please please point me in the direction of an example of a change in the law that was brought about by such representations and I’ll get my chequebook out and subscribe today.
SIGN ME UP!