Housing: Leaseholder Deposit Protection

Baroness Gardner of Parkes Excerpts

Monday 23rd July 2012 Lords Chamber

Asked By

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government whether they will introduce a transparent scheme, similar to the Deposit Protection Scheme for tenants, to protect monies paid by leaseholders and held by managing agents.

[Baroness Gardner of Parkes]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I state that my interest is on the register.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, the law already provides protection for service charges. They are deemed to be held in trust. The law also provides leaseholders with a number of rights to aid transparency over service charges. These include rights to be consulted, to ask for a summary of service charges, and to see supporting documentation. The Government therefore have no plans for additional regulation of leasehold service charges.

[Baroness Gardner of Parkes]

My Lords, is the Minister aware of the case reported last month of the managing agent who pleaded guilty to stealing £122,000 from leaseholder funds? Does she not think that the nearly 3 million leaseholders are entitled to the protection called for by the voluntary accreditation bodies, Leasehold Knowledge Partnership and the Association of Residential Managing Agents, and supported by the British Property Federation? Can she tell me what parliamentary procedures would be required to introduce regulation?

[Baroness Hanham]

My Lords, I thank my noble friend for drawing to my attention the article about the offence to which she referred. As it is a matter of court action, I do not think there is anything I can say. The article is not sufficiently detailed to know exactly where the money came from so I do not think I can comment any further on that.

My noble friend will know that if you are going to undertake legislation then before doing so, you must undertake consultation, draw up plans and take the process through, not only the regulators but also the leaseholders and those who are carrying out the voluntary regulation at the moment. You must then find legislative time to deal with it. We do not believe that it is necessary at this stage to undertake any of that.