A code of practice for landlords could be the key to leaseholders' rights

New rules are due which will offer more protection for tenants
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The Independent Online
There was a blaze of publicity three years ago when flat owners won the right to buy the freehold on their property. It seemed a great move towards the end of the archaic long-leasehold system, which leaves millions of flat owners in England and Wales at the mercy of the landlords who own the freeholds to their property.

But the result was a mess. The Leasehold Reform, Housing and Urban Development Act 1993 is plagued with restrictive clauses. You can't, for example, buy the freehold if more than 10 per cent of the floor area of the building is in commercial use - which rules out all flats built above shops.

And the 1993 Act did nothing to help tenants who were overcharged for maintenance by rogue landlords. If the leaseholders disagreed with the annual service charge, they could take the landlord to court. Most leaseholders, however, couldn't afford a County Court case for a dispute over an amount that might be below pounds 1,000. And even if flat owners did decide to fight, a loophole in the law allowed the freeholder to reclaim the flats for non-payment of service charges, before the case had been heard.

According to tenants' rights campaigner Joan South, co-ordinator of the Leasehold Enfranchisement Association, some landlords simply by-passed their tenants.

"Landlords just approached their leaseholders' mortgage lenders for the money owing and the lenders just paid out. People would suddenly discover that their mortgage payments had gone up."

A hastily arranged set of reforms aimed at ending the worst abuses of the system should be on the statute books by the end of this month as part of the Housing Bill. Most of the new rules will come into force next April.

There will be a code of practice for landlords, outlining what is "reasonable" property management. Tenants will be able to take disputes to a tribunal, rather than court. The tribunal should have a lawyer and a surveyor on the panel. Landlords won't be able to threaten to reclaim flats before the tribunal has ruled on the fairness of their service charge demands.

But Joan South says the costs of a case to tribunal could be up to pounds 2,000 a day, as tenants will need to back up their cases with expert witnesses and legal representation.

"Landlords can be very plausible and say that the work they have done on the flats is necessary," Ms South says. "But often it is substandard, overpriced and the builders are in cahoots with the landlord."

Leasehold Enfranchisement Association: 0171-937 0866.

Campaigning tenants' group.

Leasehold Enfranchisement Advisory Service: 0171-493 3116.

A government-funded organisation, which offers free advice to tenants and landlords on buying freeholds or lease-extensions.

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