Leasehold Reform

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    Leasehold Reform

    Summing up changes (hopefully) coming. And about time too. A lot of these should have been implemented years ago.

    https://www.walkermorris.co.uk/publi...reaking-scale/

    #2
    Bet the MAs are rubbing there hands together at the one about majority for s20 or off to tribunal, more agro, more lolly...

    Comment


      #3
      The one about a majority of leaseholders only applies if the work is more than 40 times the current section 20 threshold, so won;t catch most major works. That's assuming the footnote in the article is correct.

      The section about L&T 87 s42a and s42b is pointless without also putting local housing authorities under a duty to prosecute.

      The bit about freeholder's costs will make it very difficult for share of he freeholders to enforce covenants. At the very least, it would need another provision that, where a covenant was being enforced at the request of other leaseholders, the requesting leaseholders could be required to cover the costs, even if there was no provision in the lease for that.

      Comment


        #4
        But on balance many huge positive changes for leaseholders. The scales will be far more evenly tipped.

        Comment


          #5
          Originally posted by paulamis View Post
          Bet the MAs are rubbing there hands together at the one about majority for s20 or off to tribunal, more agro, more lolly...
          I doubt that as if the changes come into effect, they won't be able to claim legal expenses/add to service charges if they lose.
          Just means they can't demand hugely inflated major works costs whenever they feel like it. What's wrong with that?

          Comment


            #6
            Statements based on R.M.C. companies.

            It says "Ground rents in new leases should be set at a peppercorn!"
            In our case, we could not operate, as you need to pay Companies house fees. Computers, printers, our printer cartridges for the year exceed the total ground rent collected.

            It says "Major works (S 20's) only proceed with the consent of a majority of leaseholders"
            This means that lease holders won't want to pay, and wont pay, therefore the place becomes a hovel.
            Add that to no money in the kitty from next to no ground rent fees, the freeholder wont have the advance fee of £ 2000 to take court action against none paying leaseholders.
            The directors have to use their own money to instruct solicitors, and as they are also leaseholders, they wont want to spend their own money on solicitors..

            Bad move by the recommendations included in the linked report.

            Comment


              #7
              Originally posted by ram View Post
              Statements based on R.M.C. companies.

              It says "Ground rents in new leases should be set at a peppercorn!"
              In our case, we could not operate, as you need to pay Companies house fees. Computers, printers, our printer cartridges for the year exceed the total ground rent collected.

              It says "Major works (S 20's) only proceed with the consent of a majority of leaseholders"
              This means that lease holders won't want to pay, and wont pay, therefore the place becomes a hovel.
              Add that to no money in the kitty from next to no ground rent fees, the freeholder wont have the advance fee of £ 2000 to take court action against none paying leaseholders.
              The directors have to use their own money to instruct solicitors, and as they are also leaseholders, they wont want to spend their own money on solicitors..

              Bad move by the recommendations included in the linked report.


              On the other hand it will stop overseas, non tax paying ground rent investment companies (vultures) from demanding doubling ground rents, which in the end render properties worthless. Not to mention the resulting outrageous lease extension fees that are linked to the ground rent. Huge sums of money for what exactly? A piece of ground that someone's home sits on! People have already bought and paid/paying for their homes. The evolving ground rent scandal is far far removed from it's original purpose. If you own so many ground rent properties that you need multiple computers/printers/ink cartridges to send out g/r invoices then I'm not sure what you're complaining about?

              I wouldn't want my home to become a hovel. Neither do the majority of home owners. Not sure why you make such a sweeping statement.
              But neither do be want to be financially abused. And that is the experience of many, many leaseholders.

              Comment


                #8
                In London, the majority of flat owners are BtL landlords, most of whom rarely visit their property; they wouldn't really notice the hovel developing until it gets so bad that they can't let, even in a a seller's market.

                Actually the biggest problem I see is health and safety. Leaseholders don't like paying for that, but freeholders and management companies commit criminal offences if they don't pay for it.

                I would though note that there is a threshold of £10,000 per leaseholder, which will probably never be crossed in a well run property until it reaches end of life. My impression is that, without a reserve fund, even £500 will severely stress many leaseholders.

                The current Law commission RTM consultation raises the issue of funding leaseholder owned companies and points out that many are already using the service charge illegally. Lots of people seem to advise this, without even suggesting it might be illegal. The proposal with respect to RTMs is "allowing RTM companies to recover their reasonable management costs from leaseholders as part of the service charge, as if the lease expressly allowed for this."

                Unfortunately it is very difficult to create legislation for getting rid of bath water that doesn't kill a lot of babies as well. Also the sort of business person you are trying to frustrate is very adapt at turning law around so that it benefits them, rather than the man in the street, e.g. managing agents now use the section 20 threshold as the threshold for starting to charge on a commission, rather than a fixed price, basis.

                Comment


                  #9
                  When RAM is talking about his ink cartridge use, he is wearing his RMC director hat (very similar to a commonhold committee member one), not his BtL hat. Blocks of flats can easily end up with RMCs having to manage 100 flats, and ink cartridges don't last long. I think he is probably only really talking about the documents relating to leaseholder democracy, as well.

                  He only needs to own one flat in a large estate for him to have to communicate with lots of people, if he chooses to volunteer as a director.

                  I'd actually suggest using monochrome lasers,as they are cheaper per page, and the ink doesn't run.

                  Comment


                    #10
                    Originally posted by michelle230 View Post
                    If you own so many ground rent properties that you need multiple computers/printers/ink cartridges to send out g/r invoices then I'm not sure what you're complaining about?
                    leaseholder64 correctly points out, and also the heading was "Statements based on R.M.C. companies."
                    info -- Printing ( and writing ) of Copies of Meetings, S20 stage one, two & 3, together with the quotations from 3 builders, Annual accounts, copies of emails for office file + all communications paper copied into each leaseholders file.

                    Disputes, solicitors communications, basic letters to leaseholders, 10 to 30 pages of communications when a flat lease is sold, copies of health and safety reports ( before we got one by email ).
                    I refuse to conduct sales via email, because it means I have to pay to print the agents and solicitors incoming email for paper copy leaseholder files ( these are handed over if Company secretary ever changes , because they are not getting my hard disk )

                    And the list goes on and on.

                    Leaseholders will gladly accept being charged up to £ 150 PA by a managing agent, but object to paying an in house Co. Sec anything at all, who does the same work as a Managing agent.
                    Although,I have been paid by leaseholders because we sacked agents, and I did a better job than the agents.

                    I understand your rant about ground rents, which i agree with in part.
                    I am only defending my position in this misunderstanding. And no harm done.

                    Thanks.

                    R.a.M.

                    Comment


                      #11
                      P.S to post number 10
                      I now refill black cartridges. I have recently learnt to run with an empty colour cartridge, ( but you have to press the reset button for 5 seconds to cancel the empty warning ) or one filled with black ink, as even if you don't use colour, it slowly empties; as it primes them an every start up -- just a very very little to get the dried up ink out.

                      Comment


                        #12
                        Originally posted by michelle230 View Post
                        If you own so many ground rent properties that you need multiple computers/printers/ink cartridges to send out g/r invoices then I'm not sure what you're complaining about?
                        1. I think that you have RAM mistaken for an overseas, non-tax paying vulture instead of the RMC Director that he is
                        2. This is LandlordZONE. Contributors here are BTLers, leaseholders, RMC/RTM Directors, freeholders or any mixture of these
                        3. I have no sympathy for bill-dodgers and let's face it, some leaseholders are simply that!
                        4. Placed in the position of not being able to recover the costs of enforcing payment for works being done on a building, I can imagine that there would be a great many buildings left to fall into disrepair
                        5. Raising funds from a disparate set of leaseholders when major works are required is a Herculean task.
                        6. Whilst all leaseholders want their buildings to appear pristine and well maintained, my experience has been that when asked for a financial contribution to this end, some leaseholders meet this with radio-silence - adamant that the terms of the lease do not have to be complied with
                        7. There are a great many buildings owned by 'accidental freeholders'. These are not the overseas companies referred to previously, but ordinary men and women. They cannot and should not be expected to dip into their own pockets to subsidise major works
                        8. Apart from the 5/10/15 year ground rent multipliers and the barriers to enfranchisement, I see no point in the proposed reforms and absolutely no point in the mantra to abolish leasehold. There are already many checks and balances in place within leasehold law (specifically the Landlord & Tenant Act 1985/1987; Commonhold & Leasehold Reform Act 2002, Leasehold Reform, Housing & Urban Development Act 1993 etc.)
                        9. I say the above as a leaseholder, RMC Director, BTLer and accidental freeholder ...

                        Comment


                          #13
                          Lorimer,

                          You hold your flat under leasehold title and you have successfully managed to protect your position as leaseholder by becoming RMC director. BTLer, and accidental freeholder.

                          You have managed to avoid being abused by dishonest MAs and unfair demands for payment by unscrupulous directors of freehold companies. companies. You have escaped the 5/10/15 year ground rent multipliers and excessive demands for statutory lease extension.

                          So well done. You know how to look after yourself.

                          But many other leaseholders do not have your smartness and they easily get cheated by the MA and freeholders. There are over 100000 leaseholder who cannot sell because the ground rent multiplier is not acceptable to mortgage lenders and so the next buyer cannot get a mortgage. They can never get out of their situation if there is no reform by the Government .

                          Its easy for you to say, "I am alright jack. No need for reform" because you are lucky.

                          but it costs you NOTHING to sign that petition and help others who are stuck in their life and not so lucky as you are.


                          But the real reason to sign the petition is every leaseholder will become a beneficiary of reform because if leasehold system is abolished , the leaseholder will become the legal owner of the property and not just remain as the tenant.

                          Its a no "brainer situation" and every leaseholder in E&W should sign the petition.

                          Comment


                            #14
                            Originally posted by Gordon999 View Post

                            but it costs you NOTHING to sign that petition and help others who are stuck in their life and not so lucky as you are.


                            But the real reason to sign the petition is every leaseholder will become a beneficiary of reform because if leasehold system is abolished , the leaseholder will become the legal owner of the property and not just remain as the tenant.

                            Its a no "brainer situation" and every leaseholder in E&W should sign the petition.
                            No Gordon, the proposed changes are not the '100% advantageous solution for leaseholders' that you seem to see it as.

                            There are parts of the proposed changes that will be of some benefit to the majority of leaseholders, but the 'major gains' that you think the legislation will provide will benefit only a minority while more than likely causing problems for more leaseholders than are helped.

                            Legislation to address problems with runaway ground rents would be a good thing - but this is not the way to try and achieve that goal.

                            The problem we have with quite a lot of legislation in this country is that the people pushing for new legislation only look at a narrow goal and don't properly consider how everything else around it is affected.

                            Comment


                              #15
                              Originally posted by ram View Post
                              Leaseholders will gladly accept being charged up to £ 150 PA by a managing agent, but object to paying an in house Co. Sec anything at all, who does the same work as a Managing agent.
                              Although,I have been paid by leaseholders because we sacked agents, and I did a better job than the agents.
                              I wouldn't have thought many leaseholders gladly accept paying up to £150 PA by a managing agent!

                              In my case, I might acknowledge that up to £150 PA was a reasonable payment for the service they provide for the management of my block.
                              On the other hand, if it was a choice between paying £150 PA to the managing agents we currently have, or more than that to someone who actually arranged appropriate maintenance work, I'd definitely prefer the second.

                              I believe that the majority of leaseholders don't understand the work involved in properly managing a block, and therefore grudge paying anyone for this role.

                              Comment

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