Leasehold Reform (Amendment) Bill

Baroness Gardner of Parkes Excerpts

Friday 7th February 2014 Lords Chamber

[Baroness Gardner of Parkes (Con)]

I welcome this amending Bill today and strongly support it, for a number of different reasons. First, there is clearly a need in these days when communications have moved on so far to regularise this position. I was really surprised that even the Court of Protection could not authorise someone else to do it on your behalf—that amazed me. I thought that it had supreme powers to take over and look after things that other people could not, yet it has been confirmed to me that this is an instance when it is not able to do it. So that is very important. I am also surprised that it has taken more than 20 years to get to the point that we have got to today. If it really has been a problem, how come no one has brought this issue up before? It gives us hope that someone is now looking at the problems of leasehold, which is crying out for reform. I am delighted to hear the points made by the noble Lord, Lord Beecham, because I strongly agree—and I intend to mention the Law Commission. This Bill is enabling us to discuss this subject a little bit today, which is another reason why I welcome it. I should say that my interest is registered in the register—I am a leaseholder.

I have asked quite a number of Questions in this House over the years, but the only Question on which no one from anywhere in the House came in with a supplementary was on leasehold. Afterwards, a number of noble Lords said to me that they would have liked to come in but they had no idea what it was all about. There is a need to inform the public more about the situation so that they know about such things as the point that the noble Lord, Lord Beecham, made about commonhold, and the subject of my Question next week. In that Question, I will ask about the requirement that there is 100% agreement from people in a block of flats to change from leasehold to commonhold. That is almost unbelievable. I have a dossier of printouts from Hansard, with Minister after Minister—including the noble Baroness, Lady Hanham, who was not able to be here today, but said that I could quote her—agreeing that it is impossible to get 100% consent, for all sorts of reasons. It is sometimes because people are away or, in the terms of the Bill today, because nobody was authorised to sign. For whatever reason, 100% agreement is impossible. If you have a crooked or sharp operator owning the head lease they could bribe one person to oppose the move, and everyone else’s hope is gone.

I was sorry to lose Mark Prisk as Housing Minister, as he chaired an excellent roundtable meeting at the Department for Communities and Local Government last year. It was because of that that the redress scheme, which will come into force this year, has become law, and it will be of great value to many leaseholders. At that meeting was a huge range of people; it included organisations such as the Association of Residential Managing Agents, or ARMA, and ARLA—the letting one—LEASE, and Peverel, who were the villains of the piece but keep sending me letters and have now become angels. There were lots of politicians, including Members from both the Lords and the Commons. It was such a comprehensive meeting. For the first time, all these people, who were concerned but were looking at different aspects of the issue, were together and hearing from one another about the other side’s problems. But ALEP, the Association of Leasehold Enfranchisement Practitioners, was not there, and we were told that we would have another of these meetings. I am really very hopeful that the new Minister, Kris Hopkins, will continue that practice, because we need to make progress.

I support very clearly the comment made by the noble Lord, Lord Beecham, about the Law Commission. I gave a keynote speech—I do not think that I would ever do it again, because it was such hard work—to the Federation of Private Residents’ Associations, in which I said that it was time that the Law Commission looked at this whole property issue and, in particular, at leasehold and commonhold, although the whole thing needs review. It was interesting because one of the people in the audience stood up and said that they were from the Law Commission and that it did not do anything off its own bat anymore. The Law Commission does a report only if it is asked to do so by the Government, because then the Government pay. I had not realised that—I have been here so long in this House that I remember the days when the Law Commission brought forward reports on a wide variety of subjects. Apparently, that has changed. Therefore, it is very important for us to realise that the initiative for such a report must come from Parliament and from the Government; that is something that we should consider.

There needs to be a much wider understanding of leasehold and the alternatives. In the London area, there are estimated to be about 3 million leaseholders and between 5 million and 7 million people living in leasehold property, and most of them are very unhappy with the situation in which they find themselves. Lots of them, when they took the lease, were delighted to get their flat, having worked out all the problems of purchase, but then found that all sorts of clauses were in there that they had no idea about—they had not taken them in. This is where the problem comes up. It is definitely time to simplify the property law; I ask the Government to look at that, and to look at the possibility of doing something.

Another issue that is very relevant is the Water Bill. The noble Earl, Lord Lytton, who is a highly experienced surveyor, has tabled amendments to it that will be debated in the coming week. Leaseholders are totally excluded from any hope of getting the type of flood insurance that others get. Other people who will not get any will be occupants of council property and retirement sites. This situation will be damaging. The Water Bill should be looked at because the financial implications of this situation for individuals and even the nation are huge. The noble Earl spent some time explaining it to me yesterday and will explain it himself when he moves his amendments. A joint warning has been issued in relation to the Water Bill on the part of the British Property Federation, the Leasehold Knowledge Partnership and the Council of Mortgage Lenders which all point out how badly leaseholders will be treated in this regard. Sir Peter Bottomley in the Commons has made a great contribution to the leasehold issue over the years. As there is not enough time to detail it now, I refer noble Lords to the Commons Hansard of 24 January 2014, where he sets out very clearly his valuable views.

I would like to put forward a brief list of matters that should be thoroughly examined and that I hope will be brought forward in either primary or secondary legislation in the near future. Above all, there is a need for transparency in leasehold and for honesty and accuracy in all dealings. Leaseholders have suffered from crooked landlords not revealing that they are direct financial beneficiaries of contracts for insurance, building, management and all sorts of things. It is scandalous that the people who pay the bills have not been able to find out whether a huge rake-off from those bills has gone to a corrupt head lessee or freeholder.

The lack of maintenance of buildings is a major complaint. Sometimes buildings have been allowed to deteriorate for years and residents have been completely frustrated in all efforts to get the work done. Peter Bottomley has called for failures in some extremely serious cases to be criminalised. I have not gone into the detail of which aspects he thinks should be criminalised, whether it is the corrupt taking of the money or the failure to maintain buildings, so, again, I refer noble Lords to his comments. The OFT is carrying out an investigation of the residential leasehold property management market.

As leasehold is a property tenure used only in Hawaii and the UK—this was stated very clearly during the passage of earlier Bills in which I was involved—I think it is time that we looked at it again and I commend the comments of the noble Lord, Lord Beecham, in that regard. I still have a flat in Australia under a system known as strata title. However, I understand that there are faults in the Commonhold and Leasehold Reform Act 2002, and we should also look at that. The major fault is the 100% agreement that is required in certain circumstances.

I have set out these matters in order to place them on record in Hansard as a starting point in explaining some of the problems connected with leasehold property to people in general and to Members of this House. I seek to give us an idea of how to move on. The Minister—Kris Hopkins—sent a letter on 6 January 2014 to the Association of Leasehold Enfranchisement Practitioners, which states, “This Bill aims to make a minor but worthwhile change”. That exactly sums up the position.

I hope that the Bill will make progress. I was fascinated to hear my noble friend, in introducing it, refer to one small step being taken. I was born in Parkes, where the radio telescope transmitted man’s first step on the moon worldwide, because they could not see it in the US. Therefore, the words “one small step” are highly significant to me and may be a good omen that we will get something out of this process. I support the Bill and congratulate my noble friend on bringing it before the House.