Priorities for Leasehold Reform

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    There should be a Government wealth warning on the front of all leases.

    They could also make changes, simplify the procedure, make the exploitation of leaseholders a criminal offence, regulate those who hold monies in trust for a start.

    Comment


      From another thread:

      Leaseholders have been asked to contribute towards a reserve fund but they have not been told the purpose to which the funds are intended.

      Funds have been used for day to day running expenses and to cover the deficit for the year thereby reducing the sums available.

      Suggested action required:

      Leaseholders should be informed of the purpose of reserve funds

      Reserve fund monies should be placed in a separate bank account upon receipt

      Reserve fund monies should be used only for the specified purpose

      Somebody (regulator?) needs to carry out random checks to ensure that reserve fund monies are being held and used correctly

      Comment


        From another thread - the Ombudsman is fobbing off leaseholders by advising them to obtain copies of accounts from the Companies House website. The Companies usually file dormant accounts and they are normally micro entities which have reduced reporting requirements. So that information is unlikely to assist leaseholders. Why can the Ombudsman not order the managing agent to supply a copy of the full accounts including the service charge accounts?

        We have previously seen the Ombudsman advising leaseholders to take legal action against agents, when no legal contract exists between them, instead of taking action against an agent who was misusing reserve fund monies.

        There needs to be someone who will take leaseholders complaints seriously, it is not happening at present.

        Comment


          Written by Macromia on a different thread:
          “individual leaseholders whose views are outnumbered by other leaseholders, are often better off with an independent freeholder who they can challenge rather than as a shareholder of a management company. This is why the push for abolishing leasehold in favour of common hold is a bad idea - common hold only works in situations where everyone involved takes into account the interests of everyone in a block and adheres to the requirements of the leases, but many people are only interested in what benefits them personally.”

          Commonhold is not the solution to every problem, nor is RTM for that matter, but it must be preferable for a majority of leaseholders to have the right to make or influence decisions rather than a freeholder or his agent, who have other motives. Yes, you are going to have some leaseholders seizing power and trying to control the running of a block but as long as they have not been selected by and they are not acting on behalf of a 3rd party, that should put a stop to most of the abuse which is prevalent now.

          Comment


            The Commonhold building is managed by the Commonhold Association having "units holders" as members but each units holders is freeholder of its flat..There is no outside party as freeholder of the building and there is no ground rent to pay.

            This is similar to Leasehold building managed by the RMC having leaseholders as its members except the building is owned by the freeholder and the leaseholders are tenants who must pay ground rent to freeholder.

            https://www.lease-advice.org/advice-guide/commonhold/

            Comment


              Surely leaseholders should have a say when a managing agent is appointed or reappointed. The agent usually draws up his contract so that it does not exceed 12 months and so that the RMC does not need to consult the leaseholders. The actual term of appointment is nearly always considerably longer than 12 months. There seems to be no valid reason why directors alone should take the important decision who manages a block of properties. It has been known for directors to be carefully selected by agents,

              Comment


                Originally posted by eagle2 View Post
                Surely leaseholders should have a say when a managing agent is appointed or reappointed.
                Putting aside your utter hate of anything leasehold.

                Directors of ANY Limited company, are there to make the decisions.
                If you want all leaseholders to decide on things, you make them all directors ( and don't come back saying they can all vote as leaseholders at a meeting convened by leaseholders ).
                Ask the normal leaseholder ( who actually lives in the flat ) who the best of the worst agents are, and they won't have a clue, as they have never had contact with agents as they have never let their flat.

                For the uninitiated, Managing agents are more often found in estate agents offices. They sell houses, and for extra income, they put themselves up as managing agents for leasehold flats, and letting agents for houses and flats.

                There is no point in having directors making decisions, ( who are voted in and out by the leaseholders ), if the leaseholders want to circumvent the directors they have duly appointed to run the place ON BEHALF of the leaseholders by saying, we want you to make the decisions, but we wont accept your decisions and will insist we, the leaseholders will make a collective decision.

                For your information, I have been or am the following.
                Company secretary, Leaseholder, renter, Property Manager, H.M.O. Manager, Own property ( house ) that I let.
                And by the way, I get rid of Nasty Directors for members on here ( which should please you ).
                So I see ALL sides of the equation, rather than just shouting,
                reduce ground rents,
                Workers unite.
                Overthrow the establishment..
                etc, etc.

                You have directors ( all bad according to you ) otherwise you will never make decisions if everything is ratified by the leaseholders, 30 % of whom don't live in the flats and all they care about is their income.

                I agree that there are good directors and bad directors, but Directors none the less, and leaseholders have laws and procedures to protect them from bad directors / freeholders.

                Whatever we say on here will have no effect whatsoever on leasehold-reform

                Comment


                  I do not hate everything leasehold at all, I just want a fair deal for leaseholders.

                  At present, there is much which is wrong, which needs to be addressed. The vultures who abuse the system by inflating costs for their own benefit at the expense of leaseholders need to be stopped. The vultures I have come across have not been letting agents, they specifically target leasehold properties and service charge funds.

                  There are many RMCs which do not hold AGMs and the leaseholders/members do not have a clue what is happening, who is controlling the RMC, who is really making the management decisions, where their money is really going.

                  I have often found that the members/leaseholders have not appointed the directors. Leaseholders/members are often not invited to become directors and if they volunteer, their applications are rejected because it is a closed shop run by a minority, for the benefit of the vultures.

                  All leaseholders have contact with the managing agents and they know perfectly well how satisfied they are with the service, whether or not their questions are answered and whether or not they are fobbed off with excuses, which is more often the case.

                  Why should the leaseholders not have the right to be consulted and a say in who is managing the property? Why should carefully selected directors have the right to make the decision for everyone else? How many times is a management agreement cancelled within 12 months? If the intention is to enter into a longer contract, the consultation procedure should be followed. If managing agents had to rely on a decision by all leaseholders/members perhaps they would try to improve their service.

                  There is no point in being defeatist and ignoring the problems, lets highlight them, bring them to everyone’s attention and just maybe some action will be taken.

                  Comment


                    On another thread, a freeholder submitting an estimate of £18,360 to redecorate a hallway 25ft x 4ft x 10ft high. The freeholder claims to have obtained 4 estimates but the leaseholders have not seen anyone visit the property.

                    Once again, the real issues are not being addressed.

                    Comment


                      How to "Win"

                      Originally posted by eagle2 View Post

                      1) There is no point in being defeatist and ignoring the problems, lets highlight them, bring them to everyone’s attention and just maybe some action will be taken.
                      2) £18,360 to redecorate a hallway 25ft x 4ft x 10ft high: again, the real issues are not being addressed
                      But the problems ARE being addressed, and have been for many years.
                      The Landlordzone has shown these problems, and recommended the Courts or preferably the F.T.T. first is a way to stop bad practices.

                      The laws and proceedures ARE in place already to protect the leaseholder.That's how life works.
                      The internet is full of information as to how to address problems. ( F.T.T. used to be the L.V.T.)

                      What I find on here and elsewhere, is a reluctance of leaseholders to sue or take Freeholder to court / F.T.T. ( F.T.T. is free, up to a point ) even when I state what they can and must do, they are apprehensive.. 50% of the people who I liaise with, don't proceed with a claim against the freeholder, and no amount of leasehold reform will correct that.

                      And to bore the regular readers again, one property in London were writing / pleading with Directors to maintain the property correctly, to no avail for 7 years. I got them ( via my letters / meetings ) to remove Directors and Managing agents within 3 months, and it cost the leaseholders absolutely nothing in legal fees through my efforts.
                      ( My wording in letters must have been good, as none of the Directors turned up to the meeting to discus their removal )

                      If I can do it, so can leaseholders, but they are all afraid.

                      If someone has something stolen from them, and they are not prepared to go to court / police, then they will not get their stolen property back, or repaid for their loss.
                      Same with leasehold. The mechanisms are there, but leaseholders wont use them, even though the information to do so is on Landlordzone, and the internet.




                      Comment


                        ram – I doubt that anyone here will recognise the world which you describe. The legislation and the FTT have done nothing to stop the known culprits from overcharging, if anything, others have become aware of and started to participate in the scams which currently exist.

                        The fraudsters are ignoring the law and the FTT, the evidence is that they are becoming even more devious. Failure to comply with the law should be a criminal offence, maybe then, the fraudsters will think twice.

                        The fraudsters operate on the basis that 90% of leaseholders will accept, or at least be unwilling or unable to challenge the charges. The leaseholders are often kept in the dark, so they are not always aware of what is happening, connections and arrangements with associated companies and contractors are not being disclosed and there is currently no penalty for non disclosure. Even the FTT often ignores a leaseholder’s request for disclosure to be included within the directions.

                        It is not easy and it takes time for leaseholders to obtain the evidence which is being withheld from them. If an application is made to the FTT, the fraudsters appoint legal specialists and Counsel who are paid out of the service charge funds so the hearing is not conducted on a level playing field.

                        If a leaseholder “wins”, only the service charge for that leaseholder will be reduced (not the charges for other leaseholders) and there may be an order that the freeholder’s costs are to be excluded from future service charges payable by that leaseholder (again it does not prevent the freeholder charging costs to other leaseholders). It is a pyrrhic victory, the service charge funds remain depleted because the FTT does not have the jurisdiction to order the fraudster to repay any monies.

                        Comment


                          Originally posted by eagle2 View Post
                          ram – I doubt that anyone here will recognise the world which you describe. The legislation and the FTT have done nothing to stop the known culprits from overcharging, if anything, others have become aware of and started to participate in the scams which currently exist.
                          Quite.

                          Most part of the legislation are DESIGNED and where not designed the courts have arranged that it is IMPLEMENTED so as to:
                          - Minimise transparency
                          - Create a charade of transparency
                          - Provide multiple loopholes for fraudsters which are virtually impossible to address except in a very patchy way

                          I say so as someone who has extensive experience of the FTT (and with a 100% win rate) - but I have picked my fights very carefully to address only the most outrageous abuses.

                          There are many other aspects of legislation which were simply not considered properly before implementing - which have led to massive abuse.

                          Comment


                            An article in Private Eye 1512 headed “Buying fleecehold” refers to a major housebuilder which has made an out of court settlement as a “goodwill gesture” whereby some buyers of leasehold properties have been given the freehold interests and ground rents have been refunded following claims of miss-selling.

                            Comment


                              Originally posted by eagle2 View Post
                              An article in Private Eye 1512 headed “Buying fleecehold” refers to a major housebuilder which has made an out of court settlement as a “goodwill gesture” whereby some buyers of leasehold properties have been given the freehold interests and ground rents have been refunded following claims of miss-selling.
                              There is also a class action being prepared against one of the main housebuilders, to purchase their fleeceholds at the price they were told they could, after two years of purchase. Then the ground was sold before the two years was up, and the price to buy the fleecehold rocketed.

                              Comment


                                Originally posted by michelle230 View Post

                                There is also a class action being prepared against one of the main housebuilders, to purchase their fleeceholds at the price they were told they could, after two years of purchase. Then the ground was sold before the two years was up, and the price to buy the fleecehold rocketed.
                                While I accept that this is an issue for the leaseholders involved, anyone considering the purchase of a leasehold in this sort of situation should insist on getting the promise in writing, preferably as a signed contract stating that they will be offered the freehold (at whatever price has been promised) and that no one will be offered the opportunity to buy the freehold beforehand.

                                After purchase the best they can hope for is that they can persuade a court to accept that the developer was under a verbal contract obligating them to sell the leaseholders the freehold at a previously agreed price.




                                I still agree with the comments that some others have made:
                                Many of the 'issues' that people are arguing need to be changed really aren't important at all (doubling ground rents being one example - potential buyers just need to understand these better before purchase, and mortgage companies need to stop assuming that all doubling ground rents are a problem).

                                The issues that REALLY need to be addressed are the way that courts and tribunals deal with disputes that actually end up in front of them.
                                Two examples:
                                1. Current "best practice" regarding certification of service charge accounts was based on input from bodies that protect the interests of accountants. The courts/tribunals accept this and will therefore agree that it is 'reasonable' for service charge accounts to be 'independently' certified by an accountant - despite the fact that this add no value at all for leaseholders (there is no confirmation that costs are reasonable, or even that they are in accordance with the terms of the lease in most cases) and the accountancy costs may add 10%, or more, to the service charge costs for smaller blocks.
                                2. If service charge costs are challenged the court/tribunal will generally only compare like for like costs, and will usually give little consideration to whether or not the 'services' being provided are most appropriate for the building. This is especially the case when, for example, resident leaseholders offer to provide cleaning services themselves in place of monthly visits from a non resident cleaner/caretaker.

                                Unfortunately, the people who get to decide what is "best practice" are looking after members of their organisations, not leaseholders.

                                Comment

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