Update on Leasehold Reform
The relatively new Housing Secretary; James Brokenshire has asked the Law Commission to review the laws which allow leaseholders to manage their own buildings.
The legislation on Right to Manage [RTM] is meant to give leaseholders the power to stop abuse from rogue freeholders and their agents, by allowing most leaseholders to take over the management of their building. But issues with the RTM have stopped its usage becoming widespread – and those who have taken up the right have found delays, costs and legal uncertainty.
Now, James Brokenshire has asked the government’s legal advisers to conduct a broad review of RTM and propose reform recommendations which improve its use in practice. He said:
“This Government is tackling unfair and abusive practices within the leasehold sector every day. Our work with the Law Commission is just one aspect of this.”
“Leaseholders wanting to manage their own building should be supported to do so without the fear of uncertain, lengthy and costly court procedures.”
Law Commissioner Stephen Lewis said:
“Putting power in leaseholders’ hands can help them take control of their homes and lead to cost effective, good quality management.”
“But the law isn’t working as it should be and leaseholders are missing out on their right to manage. We’ll be looking to get to the bottom of why that is, and come up with reform recommendations that work for everyone.”
In 5 Ways To Fire Your Freeholder I describe the various ways leaseholders can take control – including the RTM provisions of the Commonhold and Leasehold Reform Act 2002. Click the link to download and read.
I must say I’ve never been a fan of RTM. It only gives leaseholders the right to take over the management functions of their leases – which leaves grey areas as to where RTM stops and the freeholder’s responsibilities continue. So I agree that reform is needed in this area and the 12-month Law Commission project is welcome. It will start now and a public consultation on provisional proposals will be launched later in the year.
“But what about banning ground rent” regular readers will be shouting at their screens. In December 2017 the Law Commission announced that it was to start a project on residential leasehold and commonhold as part of its 13th Programme of Law Reform … including the Government’s wish to ban ground rent. The latest I’ve heard on that (from the Law Commission) is “it’s in our timetable for 2020/2021” … which seems a long way off … and still uncertain.
- A call for evidence on commonhold has been published, with a full consultation due later in the year.
- On enfranchisement, the Law Commission will publish solutions for leasehold houses before summer recess 2018.
- In September the Law Commission will start a detailed consultation on a new enfranchisement regime in respect of leasehold houses and flats.
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