Reform

Before looking further at Simon Hughes’ proposals let’s get leasehold reform legislation into perspective. In the 2002 Commonhold and Leasehold Reform Act the Government fulfilled a manifesto commitment for sweeping changes to leasehold law and the introduction of commonhold and they are rightly to be commended for this. However, certain sections haven’t yet been commenced, six years after enactment, and other parts really don’t work very well. The relevant Government Departments and Ministers are fully aware of the problems and the civil servants are diligently working towards solutions. So what we need is another Leasehold Reform Act to clear the outstanding issues but, in these days of spin and image, where appearance is considered far more important than substance, the Government is hardly likely to go down that route. Another Leasehold Reform Act within six years of the last one, that would look as though the Government got it wrong at the last go. Imagine, how could we have any faith in a Government that admitted making a mistake? So, can’t do that, and the major issues are hidden behind the sofa for a while and little bits of reform are smuggled in with another different Bill. Some of the outstanding bits of the 2002 Act, namely Section 152 relating to annual summaries of account for leaseholders and Section 156 about separate bank accounts, are certain to be inserted into the Housing and Regeneration Bill presently in the Commons, although, the details will be in Regulations yet to be drafted. In that there’s now, in the Housing Bill, an accepted vehicle for leasehold reform issues open for use it would have been encouraging to report that the Government had embraced Simon Hughes’ Bill for legislation but that doesn’t seem to have happened (can’t do leasehold reform, because we’ve done that already).

The Bill

His Private Member’s Bill was primarily concerned with the public sector leaseholder; now while I appreciate that NOTB is primarily a private sector magazine, many of Simon Hughes’ proposals would be beneficial to all leaseholders if taken up and developed for general application. One clause proposed a statutory requirement for all public sector leases to contain provisions for contribution to a sinking fund, something generally not provided by Council landlords. The context for this is the quite staggering level of bills being received by Council leaseholders arising from the Decent Homes programme, but an obligation for a sinking or reserve fund would assist many in the private sector. Some blocks have reserve funds, others don’t and it’s a pain to amend the leases to make provision for a fund. The principle of saving for a rainy day is pretty well established and this is a simple issue on which the Government could legislate at no cost but providing a universal benefit to everyone.

Simon Hughes’ other major proposal was far more controversial; to provide means to challenge the landlord’s proposals for major works through amendment of the Section 20 consultation procedures. This would allow the leaseholders to produce a counter-proposal, an alternative plan for the works, and require the landlord to ballot the leaseholders for their consent to his proposal, or the counter-proposal, before proceeding. Any dispute would be adjudicated by the Leasehold Valuation Tribunal. In any normal context this sounds fairly sensible stuff – how often do we agree to share the costs of an evening out or an office lunch – but in the leasehold context it seems pretty strong stuff. But what a step forward this would be, those paying the bill would have to agree on how their money was to be spent while the landlord’s long-term interests would be fully protected by the common sense of the Leasehold Valuation Tribunal.

In the specific situation of the public sector, which this Bill is about, this is a counter to the absence of any Right to Manage for Council lessees but the benefits of its further application are patently obvious, tackling the inequalities of the leasehold system.

The Minister of Housing was present for the debate on the Bill’s second reading but did not speak and the Bill fell for lack of time. Whether the Government will seek to support these proposals remains to be seen.

In astronomical terms this Bill was hardly the Star of Bethlehem or even Halley’s Comet, merely the brief flash of a meteorite in the dark night sky but, mixing the metaphor, it’s highly encouraging that at least a few MPs are willing to keep blowing on the embers of leasehold reform. Maybe we can still get a blaze going®Å½
More from Peter in the July issue.