Asked by
To ask His Majesty's Government what plans they have to make it
easier for leaseholders to change the management company that
delivers services to them, other than by increasing
transparency.
(Lab Co-op)
My Lords, in begging leave to ask the Question standing in my
name on the Order Paper, I refer the House to my relevant
register of interests and the fact I am a leaseholder.
The Parliamentary Under-Secretary of State, Department for
Levelling Up, Housing & Communities () (Con)
My Lords, the Leasehold and Freehold Reform Bill makes it cheaper
and easier for leaseholders to buy their freehold or exercise the
right to manage, allowing them to take over management of their
buildings themselves and directly appoint or replace agents. Of
course, Section 24 of the Landlord and Tenant Act 1987 allows
leaseholders to apply to a tribunal to appoint an alternative
property manager if there has been significant management
failure.
(Lab Co-op)
My Lords, the Leasehold and Freehold Reform Bill before your
Lordships' House must rank as one of the most disappointing
pieces of government legislation in recent years—and it is a
competitive list. There have been nearly five years—not five
weeks or five months—of hype and promise, and extraordinarily
little action from the Government. When can we expect action to
regulate management companies, along the lines of the report of
the noble Lord, , and when will the Government
deliver the promises they have repeatedly made but are just not
delivering?
(Con)
My Lords, we have been very clear, and the Secretary of State was
very clear, that we cannot support establishing a new regulatory
body at this time and through this Bill. Measures in the
Leasehold and Freehold Reform Bill are there to protect and
empower leaseholders, along with existing protections, and work
undertaken by the industry will seek to make property management
agents more accountable to leaseholders who pay for their
services.
of Kentish Town (Lab)
My Lords, I declare an interest as the chair of the Property
Institute. The Government keep saying that they do not have time
to implement RoPA; I do not believe it, and they could if they
wanted to. In the meantime, at the request of people in the
industry, I chaired the committee that set up a code of conduct;
is there nothing the Government could do to at least endorse or
make that code of conduct mandatory? That would help in making
sure that all managing agents work to a high level.
(Con)
My Lords, the Government welcome the ongoing work being
undertaken by the industry, and thank the noble Baroness, Lady
Hayter, for the work she has done with her group on codes of
practice. We have said that we will consider any code produced by
her steering group, and come back to the House.
(LD)
My Lords, the Competition and Markets Authority, in a recent
report, was very concerned about the increasing practice of major
housebuilders charging all the residents on new estates for
common amenities such as roads, lighting and playgrounds,
services traditionally provided by local authorities and paid for
by council tax. Is the Minister confident that the measures in
the Bill will ensure that prospective residents will be aware of
the way that their new estate will be managed and the actual
costs and services they will have to pay for before they buy?
Does she agree with me that there is little justification for
these residents to have to pay twice?
(Con)
Through the Leasehold and Freehold Reform Bill the Government are
legislating to make sure that freehold home owners who pay estate
rent charges have the right to challenge the reasonableness, and
to go to a tribunal to appoint a manager to manage the provision
of those services, along with the transparency that they will
also have in those charges. We are also carefully considering the
response to and the recommendations of the CMA report published
in February.
The Lord Speaker ( of Alcluith)
My Lords, the noble Lord, , is participating
remotely.
(Lab) [V]
My Lords, in conditions where leaseholder landlords living
overseas remain uninterested in block management—their only
interest being the rent—where in the Bill is the legal obligation
on managing agents to supply management committees with the valid
names and contact details of these overseas landlord owners,
enabling the seeking of their support for an RTM? Where, with
notice, absentee landlords fail to indicate whether or not they
support an RTM, surely their interests should simply be ignored.
Indifference should not block progress.
(Con)
My Lords, we are looking more closely at this issue, because the
noble Lord is right—sometimes it can be more difficult. We have
also recognised the participation rates, which can be affected by
foreign owners. We have listened to the arguments raised in
Committee and by MPs in the other place, and we will continue to
consider the issues raised.
(Lab)
My Lords, is the Minister aware of the extent of a stratagem
whereby companies have acquired freeholds with the intention of
removing the leaseholder occupants by undertaking works on the
properties that the leaseholders cannot possibly afford to pay
for? By these means the freeholder expects to compel the
occupants to sell up. What redress is there against this
stratagem?
(Con)
I am not aware of this strategy on the part of freeholders, but I
will look into it and come back to the noble Viscount.
(Lab)
My Lords, every day we see horror stories in the press of
crippling increases in ground rents. After the Recess we go on to
Report of the Leasehold and Reform Bill, but so far with no
update from the Government on the ground rent consultation
undertaken by them some time ago. Can the Minister tell us just
what the proposals will be on ground rent?
(Con)
I do not expect the noble Baroness to expect me to tell her that
at an Oral Question, but the Government have been consistent that
they have concerns about existing ground rents, and the adverse
impact that ground rents have on leaseholders. We have consulted
on a range of options to cap ground rents in existing leases.
That consultation closed on 17 January and the Government will
respond to it shortly.
(Con)
My Lords, I am looking at the text of the Question tabled by the
noble Lord, Lord Kennedy, and I am trying to be helpful to my
noble friend the Minister. In Scotland the management company is
call the “factor”—a name that can conjure up nightmares or
pleasant dreams depending on the experience. In 2011 we passed
the Property Factors (Scotland) Act, one section of which allows
home owners to make an application to the Homeowner Housing Panel
for a determination of whether their property factor has failed
to carry out their factoring duties, or failed to comply with the
code. I wonder whether there is any useful guidance in that for
my noble friend the Minister.
(Con)
I think what my noble friend is suggesting is what we have in
Section 24 of the Landlord and Tenant Act 1987, which allows
leaseholders to apply to a tribunal to appoint an alternative
property manager—or “factor”—if there has been significant
management failure.
(Lab Co-op)
My Lords, over the last few years the Member for Surrey Heath in
the other place has made some absolutely wonderful statements,
promises and claims and given interviews on all sorts of things
we all support. Why did none of them make it into the Bill?
(Con)
I disagree with the noble Lord opposite. I think many of those
things my right honourable friend the Secretary of State has said
have made the Bill, and I know from talking to him that he wishes
he had more time and more capacity to do more.
(Non-Afl)
My Lords, one pithy slogan that has come from the Government is
that those who pay should have a say. I could not agree more.
Will the Minister agree that, ultimately, the best solution for
giving a say and empowering leaseholders would be ensuring that
they have right to manage? I am not going to nag about this Bill,
but does the Minister not agree that the best way of empowering
for the future would be that all new flats are sold as commonhold
or at least with a share of freehold? Even if this Bill cannot
deliver because the Minister does not have time, and because of
the complications that have been alluded to, would it not be
resolved by having a sunset clause that would guarantee that this
will happen in the future, so this Bill could at least leave that
as its legacy?
(Con)
I can only reiterate what I have said many times at the Dispatch
Box: the Government remain committed to the widespread uptake of
commonhold for flats. We have stopped commonhold for houses in
this Bill, and we will set out our next steps in due course.
(Con)
My Lords, is the Minister aware just how difficult it is to get
rid of an incompetent management company? Such companies hide
behind the excuse that they cannot get permission from all the
people in the building. It is high time we dealt with this
problem and stopped this terrible situation.
(Con)
I agree that if you have a bad managing agent, it is not
acceptable for any leaseholder. But, as I said, you can use
Section 24. We are making it better with the Leasehold and
Freehold Reform Bill, and I am very happy to talk to the noble
Lord about issues he may have encountered.
