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ISSUE No. 93 Summer 2010


Leasehold barely featured in the General Election – despite an estimated three million leaseholders having a vote – and one wonders what the change of Government will mean. The FPRA will continue to campaign for the improvements we believe are necessary in the leasehold sector.

Only one political party – the Lib Dems – replied to the FPRA’s letter setting out our three manifesto “musts”: an independent regulator for property managers and commercial landlords; full disclosure of insurance and other commissions by freeholders; and guaranteed safety of service charge funds should the banks fail again.

We are grateful to the Lib Dems for at least having the courtesy to respond to us. However, their response was bland:

“We consumers often get a raw deal in our society and that there can be real confusion over how industries are regulated and often people do not know who to complain to when something goes wrong. That is why we will introduce a Universal Service Code to secure high-quality customer service in the private and public sectors, for example by requiring that the customer service phone numbers are free from mobiles and landlines.

“We believe that the current system of regulation for property managers and landlords is complex and will seek to simplify it. We also believe that freeholders should be transparent and disclose insurance and other commissions by freeholders.” The Lib Dems also outlined their policy on fuel poverty, but made no mention of the particular context of people living in leasehold properties.

FPRA has a new campaign: to get a fair deal for flat dwellers when it comes to fuel pricing. We believe issues concerning energy supplies to privately owned blocks of flats are not being handled correctly and will lobby the new Government to discuss:

1. Energy efficiency grants: These are unfairly not available to landlords of private blocks of

long leasehold flats, even if those landlords are the owners of those flats. Landlords who rent can obtain tax relief but this does not apply to landlords of leasehold flats.

2. Inability to Change Supplier/Lack of Competition: Companies managing blocks of flats are being prevented from obtaining the best rates for the supply of gas and electricity to communal areas because the utility companies treat them as small businesses. They run credit checks on them as businesses and find they have no assets – often they will have filed dormant accounts with Companies House. These are not trading companies running a business, and the approach by the utility companies is wrong because these flat management companies are receiving domestic energy supply. They are not supplied as commercial customers but the utility companies are applying commercial rules to them.

3. VAT and Domestic or Commercial Tariffs: Despite clear VAT guidance that the supply of electricity and gas to common parts of blocks of flats is a domestic supply, utility companies often refuse to acknowledge this and, even if they finally do, then refuse to backdate the necessary repayment of wrongly charged VAT.

4. Disconnection: Utility companies have a safety net to prevent unnecessary disconnection of vulnerable customers who receive domestic supplies, but there is no protocol regarding disconnection of communal areas of blocks of flats. Disconnection of supplies to communal areas of blocks of flats immediately puts at risk the safety of those who live in those flats, because the fire alarm and emergency lighting would not operate.

INSIDE THIS ISSUE Enfranchisement

Extending your lease Ask the FPRA Legal jottings

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