Money: It's time to make leaseholders feel they're kings of the castle

Landlords simply have too much power over their tenants.

LEASEHOLDERS COULD be given the right to take over the management of their block of flats without having to prove that the landlord was in any way at fault, according to a new government consultation document. The Government's initiative comes as leaseholders campaign for changes to legislation, which many claim allows landlords to exploit their tenants.

Among the proposals outlined in the consultation document is a relaxation of restrictions to the right of flat owners collectively to buy their freehold. At present, for buildings to qualify for enfranchisement, no more than 10 per cent of floor space must be non-residential. This disqualifies smaller blocks, where the ground floor may be laid out as shops. The Government proposes to lift this to 25 per cent.

It is also proposed that the "residence test" - whereby at least half the enfranchisement group must have occupied their flats as principal dwellings in the 12 months before the date when the initial notice is given - simply be applied from the date when that initial notice is given.

Alternatively, would-be enfranchisees will be required only to have been living in their flat for a period totalling 18 months out of five years, rather than three years in the last 10. The proportion of "qualifying" tenants who can call for collective enfranchisement could also be dropped from two-thirds to a half.

Other proposals include:

y regulating the activities of property managers, including the selection of contractors, and improving the security of tenants' funds;

y controls to ensure landlords provide effective insurance cover, stamping out the practice of "placing" insurance to maximise commissions;

y the Lord Chancellor's Department to consult on the introduction of a new type of tenure for flats, called "commonhold", which would give flat owners the individual ownership of the property on which their home stands;

y options to cut down on the arguments over the price of buying a freehold, avoiding the need for expensive professional advice;

y a "no fault" right for leaseholders to take over management of a block without buying the freehold. To qualify, the non-domestic proportion might be limited to 10 per cent, rather than the 25 per cent proposed for enfranchisement.

Terence Michael, spokesman for the Flatowners Network, says: "I welcome the direction the Government is moving in, but the document wastes time on technicalities, it is turgid to read and fill of uncertainties. I want a government that takes a strong lead and makes a powerful stand on crucial issues. The consultation paper suggests they are sitting on the fence."

However, Mr Michael says the primary focus should be on "regulating the new breed of leasehold landlord managers" whether or not they have collectively bought their freehold (known as "enfranchisement") or not.

Mr Michael also points out that the Government's emphasis on simplifying the enfranchisement process must go hand in hand with regulating what happens after this takes place, otherwise it is likely to face a huge backlash in the future. "It's very short-sighted. People with a house that enfranchises are OK, but flat-owners who enfranchise face a whole range of risks they were exposed to with their former nightmare landlord, such as inflated service charges. Leasehold landlord managers, and the property company they run, must be regulated."

Peter Haler, head of the Leasehold Advisory, says: "I'm pleased with the document, although I had hoped for something more solid."

Mr Haler also believes leasehold managers must be subject to strict regulations, whether or not the property has been enfranchised. He says leaseholders must be legally obliged to follow a standard structure, which includes setting up a company designed specifically for this purpose. He adds: "The company that leaseholders set up to run the block must give each individual the same rights to get redress and follow strict procedures for holding annual general meetings and handling disputes, for example.

"It would ensure complete transparency of all expenditures and everything else. The more you can regulate and write down, the fewer problems there will be, because everyone will know where they stand and what their money is being spent on."

In order to prevent new leasehold managers from stepping into the shoes of former landlords, leasehold groups and Mr Haler call for criminal prosecutions, fines and the removal of directors of self-managed companies if they fail to manage according to the rules. Tight regulation should apply in the same way to managing agents and anyone else considered to be assuming the role of a manager.

"I would like to see a regulator and ombudsman rolled into one," says Mr Haler.

The Government could take the Financial Services Act as an example for legislation covering leases. This forced all independent financial advisers to apply and pay for a licence in order to ply their trade, which covers selling investment products. Property is usually the biggest investment a person makes in a lifetime, yet the management of a leaseholder's biggest asset is still not regulated, which is an unpardonable anomaly in British law. This country's two million leaseholders, whose property is worth many billions of pounds, need to be given the protection they deserve, and only an official regulator can provide this. Codes of conduct in this industry only scratch the surface, and those that exist are often ineffective.

Decisive, clear-cut, effective rules that are open to as little interpretation as possible need to be firmly enshrined into law. Campaigners argue that to aid clarity words such as "reasonableness" and "due regard" should be eradicated from every description in the regulations.

Leaseholders are asking the Government to sharpen its focus, taking effective action rather than creating complexities to hide behind, to prevent further abuses of the system a few years down the line.

Karen Woolfson welcomes comments for her column: Write to: Homebattles, c/o Nic Cicutti, Personal Finance Section, `The Independent', 1 Canada Square, Canary Wharf, London E14 5DL. Karen regrets she is unable to reply personally to all letters

Arts and Entertainment
Impressions of the Creative Community Courtyard within d3. The development is designed to 'inspire emerging designers and artists, and attract visitors'

architecture
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010

GlastonburyWI to make debut appearance at Somerset festival

Arts and Entertainment
Lena Headey as Cersei Lannister

TV reviewIt has taken seven episodes for Game of Thrones season five to hit its stride

Arts and Entertainment
Jesuthasan Antonythasan as Dheepan

FilmPalme d'Or goes to radical and astonishing film that turns conventional thinking about immigrants on its head

Arts and Entertainment
Måns Zelmerlöw performing

Eurovision
Arts and Entertainment
The light stuff: Britt Robertson and George Clooney in ‘Tomorrowland: a World Beyond’
film review
Arts and Entertainment
Reawakening: can Jon Hamm’s Don Draper find enlightenment in the final ‘Mad Men’?
tv reviewNot quite, but it's an enlightening finale for Don Draper spoiler alert
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment
Breakfast Show’s Nick Grimshaw

Radio
Arts and Entertainment

Eurovision
Arts and Entertainment
'Youth' cast members Paul Dano, Jane Fonda, Harvey Keitel, Rachel Weisz, and Michael Caine pose for photographers at Cannes Film Festival
film
Arts and Entertainment
Adam West as Batman and Burt Ward and Robin in the 1960s Batman TV show

Comics
Arts and Entertainment
I am flute: Azeem Ward and his now-famous instrument
music
Arts and Entertainment
A glass act: Dr Chris van Tulleken (left) and twin Xand get set for their drinking challenge
TV review
Arts and Entertainment
MIA perform at Lovebox 2014 in London Fields, Hackney

music
Arts and Entertainment
Finnish punk band PKN hope to enter Eurovision 2015 and raise awareness for Down's Syndrome

eurovision
Arts and Entertainment
William Shakespeare on the cover of John Gerard's The Herball or Generall Historie of Plantes

books
Arts and Entertainment

Game of Thrones review
Arts and Entertainment
Grayson Perry dedicates his Essex home to Julie

Potter's attempt to create an Essex Taj Mahal was a lovely treat

tv
Arts and Entertainment
A scene from the original Swedish version of the sci-fi TV drama ‘Real Humans’
tv
Arts and Entertainment
Hugh Keays-Byrne plays Immortan Joe, the terrifying gang leader, in the new film
filmActor who played Toecutter returns - but as a different villain in reboot
Arts and Entertainment
Charlize Theron as Imperator Furiosa in Mad Max: Fury Road
film
Arts and Entertainment
Jessica Hynes in W1A
tvReview: Perhaps the creators of W1A should lay off the copy and paste function spoiler alert
Arts and Entertainment
Power play: Mitsuko Uchida in concert

classical
Arts and Entertainment
Dangerous liaisons: Dominic West, Jake Richard Siciliano, Maura Tierney and Leya Catlett in ‘The Affair’ – a contradictory drama but one which is sure to reel the viewers in
TV review
Arts and Entertainment
Richard Herring, pictured performing at the Edinburgh Fringe Festival two years ago
comedy
Arts and Entertainment
Music freak: Max Runham in the funfair band
theatre
Arts and Entertainment
film 'I felt under-used by Hollywood'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

    Please save my husband

    As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada
    Birthplace of Arab Spring in turmoil as angry Tunisians stage massive sit-in over lack of development

    They shall not be moved: jobless protesters bring Tunisia to a halt

    A former North African boom town is wasting away while its unemployed citizens stick steadfastly to their sit-in
    David Hasselhoff's new show 'Hoff the Record': What's it like working with a superstar?

    Hanging with the Hoff

    Working with David Hasselhoff on his new TV series was an education for Ella Smith
    Can Dubai's Design District 'hipster village' attract the right type of goatee-wearing individualist?

    Hipsters of Arabia

    Can Dubai’s ‘creative village’ attract the right type of goatee-wearing individualist?
    The cult of Roger Federer: What is it that inspires such obsessive devotion?

    The cult of Roger Federer

    What is it that inspires such obsessive devotion?
    Kuala Lumpur's street food: Not a 'scene', more a way of life

    Malaysian munchies

    With new flights, the amazing street food of Kuala Lumpur just got more accessible
    10 best festival beauty

    Mud guards: 10 best festival beauty

    Whether you're off to the Isle of Wight, Glastonbury or a local music event, we've found the products to help you
    Unai Emery’s passion for winning and eye for a bargain keep Seville centre stage in Europe

    A Different League

    Unai Emery’s passion for winning and eye for a bargain keep Seville centre stage in Europe, says Pete Jenson
    Amir Khan and James DeGale’s remarkable Olympic performances were just the start of an extraordinary journey - Steve Bunce

    Steve Bunce on Boxing

    Amir Khan and James DeGale’s remarkable Olympic performances were just the start of an extraordinary journey
    Abuse - and the hell that came afterwards

    Abuse - and the hell that follows

    James Rhodes on the extraordinary legal battle to publish his memoir
    Why we need a 'tranquility map' of England, according to campaigners

    It's oh so quiet!

    The case for a 'tranquility map' of England
    'Timeless fashion': It may be a paradox, but the industry loves it

    'Timeless fashion'

    It may be a paradox, but the industry loves it
    If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

    Could have done with Osama bin Laden staying alive?

    Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
    New exhibition celebrates the evolution of swimwear

    Evolution of swimwear

    From bathing dresses in the twenties to modern bikinis
    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf