Leasehold Reform (Ground Rent) Bill [Lords]

Debate between Matt Rodda and Theresa Villiers

2nd reading
Monday 29th November 2021 Commons Chamber

[Theresa Villiers]

We would certainly need a cap, and the sort of levels that my hon. Friend mentions sound reasonable to me.

Let me turn to how this legislation will interact with new building safety laws. New building safety legislation will impose stringent responsibilities on freeholders, whether they are professionals or just flat owners who are banded together to manage their building. Frankly, not all leaseholders will want to take on such liabilities, yet this Bill will mean that for new flats, residents—whether they want this or not—will be jointly responsible for the safety, maintenance and upkeep of the apartment buildings in which they live, regardless of the size or complexity of those buildings. As my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) highlighted in his earlier intervention, worrying research in a 2019 report commissioned by the Royal Institution of Chartered Surveyors and Built Environment Forum Scotland indicates that the removal of professional freeholders in Scotland has contributed to buildings falling into disrepair. A key problem that has been identified is that difficulties in securing a majority agreement among leaseholders and getting all flat owners to fund the repair works needed can significantly slow down remedial work, and that pushes up costs.

[Matt Rodda]

I appreciate that the right hon. Lady wishes to make a point about the importance of shared ownership and the difficulties of managing the shared parts of a large block of flats. Has she looked into the way that this issue is managed in other countries, given that all western countries other than the UK do not have the leasehold system? Surely there are ways to manage communal areas other than by maintaining leasehold, which involves all the difficulties that we have heard about.

[Theresa Villiers]

The fact that English property law is unique does not necessarily mean that it is wrong, but I acknowledge that it is important to look at how other countries manage these issues. That is partly why it is instructive to look at what has happened north of the border. Of course, Scotland has a different legal system. Leasehold and commonhold have been a fundamental part of its system for a long time, and it seems that, in some instances, that is making it more difficult to keep buildings in a decent state of repair.

This is a very important Bill, but it needs careful scrutiny if we are to ensure that it protects leaseholders effectively from abusive and unscrupulous practices, operates fairly and avoids unintended negative consequences for the very people whom it was designed to protect.