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whAt’s hAppening in the leAsehold sector Regulation
ThinkTankreporTboosTs callsforleaseholdreform
Anew report fromthinktank CentreForum, titled Anew lease of life,was launched onMonday 20 August andaddsits voice to callsfor leaseholdreform. Thestudymakesthe casefor effectiveregulationofmanaging agents andmakes thefollowing proposals for improving the way
inwhichthe sector operates: nAregulator shouldmake membership of an ombudsman compulsory for allmanaging
agents.Thisissimilar to current regulationsfor estateagents, and would give leaseholders a far
lower barrier to redress. nTheleaseholdvaluation tribunal (LVT) process should be reformed to reduce power andinformation
imbalances.It should ensure that all relevant informationisdisclosed prior to a case to avoid freeholder brinkmanship and presume useofthe legislativeprovision
to prevent freeholders from recouping legal costs through
service charges. nThe threat of forfeiture,which means leaseholders can lose the fullvalue of theirproperty for
minor debts, should be removed nThepower of freeholdersand estatemanagementschemes to chargetenants tomodifytheir properties should beamended so that they cannot demand a fee for permission unless they show that plannedworkwould reduce a
property’s value. nTheright tomanage,where leaseholders can take control ofmanagement in certain circumstances, should be promotedbyputting information
notes on all service charges. nCommonhold should be promoted as an alternative to leasehold. CentreForumbelieves the wayinwhich leaseholdworks
PRoPeRTy nighTMARes
the report was launched on the sameday as channel 4’s dispatches programme Property nightmares – the truth about leasehold was broadcast. theprogrammehighlighted someof theproblemsfaced by theUK’sestimated threemillion homeowners living in leasehold property. issues such as service charge discrepancies, poorly performingmanagingagents andshoddymaintenancewereput under thespotlight,further emphasising theneed for regulationtobe reconsidered by government. to watch the programme go towww.
channel4.com/programmes/dispatches/episode-guide/series-111/ episode-3
goveRnment
markpriskappoinTed minisTerforhousing
Mark Priskhas replaced Grant Shapps as Minister forHousing in acabinet reshufflethatsees the former housing minister promotedtoConservativeParty
Chairman.Mark Prisk, the MPfor Hertford and Stortford takesuphis newpositionatthe Department forCommunities andLocalGovernmentleaving behind hisformerroleasbusiness minister within theDepartment forBusiness, Innovation and Skills.
Flat Living Autumn2012 Achartered surveyor by
profession, the newhousing minister previously worked in the property development sector andran hisownproperty consultancy. He becameanMP in
2001.Prisk wasformerlyina number of positions including shadowfinancialsecretary to theTreasury, shadowpaymaster general, shadowspokesman for business andenterpriseand home affairswhip before becoming a minister after the 2010 election.
ComPetition Winanipad
insurer ChUResidentslineis doingasurveyuntil the endof 2012 - Rateyour PropertyManagingAgent. There is alistofonly 12questions that will automaticallyregister you withachanceto winaniPad. Visitwww. churesidentsline.
co.uk/property managersurvey to take
part.Theresults will beprovidedinournext issue.
9
in EnglandandWalesgives freeholderslittleincentive to ensure that leaseholders getgood valueorquality service. Thethink tank claims that aregulator couldbe introduced foraslittleas£2per leaseholder. Thereporthas beenwelcomed
by ARMAwhichhas always supportedregulationofthe sector andbyleaseholdorganisations including the Federation of PrivateResidents Associations whose chairman Bob Smytherman said Centreforum “shinesalight on theCoalition Government’s currentpolicyto rely on self-regulationwhich has resulted in averypatchylevel of service. “The RICS Code of Practice is
not only voluntary for property management companiesitis virtually unheard of bymost flat owners,equally thereare around 50%ofpropertymanagerswho don’tevenbelongtoany trade associationdespite collecting and holdinglargeamountsofservice chargefunds oftenamounting to millions of pounds and not coveredbyany code of practice or regulation.We believe the only waytoget the‘rogues’ outofthe sector is to have acompulsory independentlicensing scheme with ahighminimumstandard, along with severe penalties
9
10 11
Sir Peter
BottomleymP: leasehold is
“legal torture”
forbreachesofthose required standards”. MPs too are joining calls for
change. SirPeter BottomleyMP recently described theleasehold sector as ‘legal torture’ following a recent LVT case in hisWorthing West constituency andLabour MPBarry Gardiner was quoted in TheGuardian, saying:“Thereisa real senseofgrowingmomentum andcross-party consensus on this issue –itisnow time to revisitleaseholdreform. Theseproposals wouldcost the government nothingand would at astroketransform thelives of millions of leaseholders.”
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