Just Window Dressing! Leasehold experts hit out at reform proposals
The Leasehold Group of Companies – formerly led by the late Louie Burns – has described the reforms as “window dressing” and has called for timescales and details of how changes will be implemented.
The government announced proposed reforms to the leasehold system intended to help leaseholders to own their homes, while reducing the costs involved and making the enfranchisement process clearer and fairer.
But The Leasehold Group says the proposals lack detail and risk causing greater confusion to existing and potential leaseholders.
Anna Bailey, the group’s founder, says: “Having been at the forefront of this sector and working solely for leaseholders for nearly 20 years, I am genuinely concerned that the reforms proposed will in reality change very little for millions of leaseholders and are nothing more than window dressing. We – and the clients for whom we are working – urgently need more clarification on how, and crucially when, the reforms will actually be implemented.”
And the Association of Leasehold Enfranchisement Practitioners (ALEP) says it wants clarity and further information regarding timescales, technical legal details and how changes will work in practice.
ALEP director Mark Chick says the proposed reform show commitment from government. But he adds: “The measures … have thrown up more questions than they’ve answered for professionals working in enfranchisement.”
ALEP wants to know when the first draft of this legislation will be released and more detail on what these changes will actually look like in practice.
“As this is just the first part of a ‘seminal two-part reforming legislation’ we are calling for more detailed information on what the next steps are and what they will include” says Chick.
“Whilst we appreciate that an online calculator may help simplify matters, ALEP and its members have real concerns about how this will actually work in practice and wonder if this measure takes into account the complexities of marriage value calculations and the need to ensure that there is fairness for both leaseholders and freeholders” he continues.
Meanwhile solicitors’ leaders are warning that for commonhold ownership to flourish, there must be incentives for developers, lenders and buyers.
“Leasehold reform is a complex, important and necessary task with many different interests at stake” says David Greene, president of the Law Society of England and Wales.
“The reforms announced by the government should deliver real benefits for current leasehold homeowners and future buyers, many of whom are being failed by the current system.
“They should help people avoid expensive ground rents and make it easier for them to buy the freehold of their home.”
Commonhold is a form of ownership for multi-occupancy developments where each unit holder owns the freehold of their home, and a commonhold or residents’ association owns and manages the common parts of the property.
Although the commonhold system should give flat owners more control over the management of their development than leasehold does, very few commonholds have been created since they were introduced in 2004.
“If commonhold is to develop as an alternative to leasehold, then the government must encourage its creation on a much wider basis,” adds David Greene.
“Incentives will need to be offered to developers, lenders and buyers if this is to happen.”