Your money: Law catches up with rogue landlords

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From Brighton to Kensington, local councils are taking steps to give tenants a fairer deal, says Karen Woolfson

An increasing number of freehold landlords could soon face criminal convictions. Local councils are under pressure to use their powers to prosecute landlords who fail to provide a summary of costs and access to inspect service charge accounts - a criminal offence under Sections 21 and 22 of the Landlords & Tenants Act.

Local authorities such as Brighton & Hove, Southwark and Westminster already take a strong line on this issue; others are beginning to follow suit.

Kensington & Chelsea Council, in London, has just passed a motion to make full use of its legal powers to protect leasehold tenants, pledging to take action against landlords who flout the law by refusing to make service charge details available to flat-owners.

Rima Horton, the Labour councillor who proposed the motion, says: "Councils should be using their powers in every case where the law is transgressed, by writing to the landlord to point out that they haven't supplied the required information; if they don't, the council will consider taking legal action."

Under the Act, a leaseholder can ask the landlord to supply him with a written summary of the costs showing how they are or will be reflected in demands for service charges. The summary must be certified by a qualified accountant if there are more than four flats in the building, or if the costs also relate to another building.

The leaseholder is also entitled to inspect the accounts, receipts and other documents supporting the summary such as invoices, bank statements and cheque stubs. These facilities must be made available free of charge; if the landlord fails to comply, the council has the power to prosecute the freeholder or managing agent.

Terence Michael, a leaseholder, says: "If a landlord hasn't produced accounts within the specified period, then they've committed a crime. Even if they produce the information after the time period has expired, that does not purge them of the offense." He adds: "Crime is the key word that tenants are not used to using about landlords. The Kensington & Chelsea motion wakes people up to the fact that this is a criminal offence."

Katherine Greig, tenancy relations officer for Brighton & Hove councils, says that usually when she threatens to prosecute landlords, they comply with the law. She believes it should be a duty for councils to investigate all complaints that come under leasehold and harassment legislation.

She regularly sends out letters to landlords that read along the following lines: "Under the Landlord & Tenants Act Section 21 or 22 I've seen a copy of a letter from Mr X which says you have not provided the summary of costs or access to inspect the accounts as required.

"I must advise you that failure to provide this information within the statutory time limits is a criminal offence for which this local authority can prosecute. A finding of guilty can result in a substantial fine and or a term of imprisonment."

Ms Greig is a committee member of the country-wide Association of Tenancy Relations Officers, and says its members are usually unable to provide remedies. "They can only go around shooting freeholders in the foot in the hope that it will hurt enough, so they realise it is less painful for them to provide the information or accounts." She wants the Government to give "conspicuous" political commitment to issues relating to private leaseholders, which would encourage local authorities to do the same.

Members of Parliament are starting to put pressure on councils to take action against landlords who break the law. The all-party parliamentary group chaired by Barry Gardener, MP for Brent North, is expected to encourage its large number of members (it has grown to 55 over the past two weeks) to urge councils to act with more haste, and to use their powers to enforce leasehold law.

Meanwhile, the motion passed in Kensington & Chelsea was accompanied by a series of questions that all councils are likely to be asked in the near future. They how many complaints the council has received from leaseholders, and the nature of the complaint; how many landlords have been threatened with prosecution over non-disclosure and inspection of relevant accounts; how many landlords have been prosecuted; how many cases are current; whether all aspects of the rights currently given to leaseholders in the borough are being properly enforced; and the number and percentage of households within the borough that are occupied by leaseholders.

Other groups, such as the Freshwater Leasehold Alliance which represents around 300 leaseholders, are also calling for councils to treat leasehold issues as a priority and to prosecute more landlords. Freedom for Leasehold Abuse is campaigning for changes to the current system but, like a new group called the Coalition for the Abolition for Residential Leaseholders (Carl), to be launched this week, it wants the current system to be abolished in favour of commonholds, in which the leaseholder owns the freehold of the property on which a flat stands.

Carl is the reincarnation of the Campaign Against Residential Leasehold Abuse, originally spearheaded by John Mitchell, who helped formulate changes to leasehold laws in 1996. He has appointed Stella Evans, who is also secretary of the Associated Coastal Tenants, to lead the organisation into the new world of flat ownership.

All these developments are placing increasing pressure on councils and, more important, the Government, to add firm action to their words.

The consultation document on leasehold reform is due to be sent out shortly, and implementing the reforms needs to be a priority. It is to be hoped that the Government will not fall into the trap of listening to industry or freeholder-inspired responses alone; it should also listen carefully to leaseholders who have suffered abuse from rogue landlords.

The direct experience of these people will offer the best insight into whatever changes need to be introduced.

Carl (01787-462-787); Freela, PO Box 26303, London N8 7WJ; Freshwater Leasehold Alliance (0181-200 8547).

Comments for this column are welcome. Write to Homebattles, c/o Nic Cicutti, Personal Finance, `The Independent', 1 Canada Square, Canary Wharf, London, E14 5DL. Karen Wolfson regrets she is unable to reply personally to all letters.

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