Leaseholders and Managing Agents

Apsana Begum Excerpts

Tuesday 28th February 2023 Westminster Hall

[Apsana Begum (Poplar and Limehouse) (Lab)]

In the interest of time, I will keep my remarks short and go straight into an example.

In the first quarter of 2022, one of my constituents paid just under a whopping £1,000 in electricity bills for a one-bedroom flat. She is obviously extremely concerned about how she will afford her bills when the energy price cap rises again in April. The electricity account is held by the freeholder of the building, which is a private company, and it is a commercial account. My constituent, who is a leaseholder, wishes to change her account type—indeed, she says that the majority of the units are residential anyway—but she is facing difficulties.

In particular, the energy provider has said it cannot have direct relationships with the leaseholders unless individual meters are installed. The managing agent has confirmed that the cost of installing individual meters would be passed on to the leaseholders and would be around £1,000 or £2,000. However, building-wide energy efficiency improvements are generally understood to be the freeholder’s responsibility. As a leaseholder, my constituent can make some energy efficiency improvements to her home, but at the very least she needs permission from the freeholder for major works.

Again, the leaseholder is trapped in this bureaucratic quagmire between an opaque rock and an even more oppressive hard place, thwarted by complex buck-passing that ends up with them being financially liable or financially disadvantaged, without rights or agency. That is because, essentially, a residential building of leaseholders is run almost entirely at the landlord’s discretion. I understand that leaseholders can dispute decisions and costs, which can amount to millions of pounds, but they will never get their legal costs paid, even if they are successful. On the other hand, the landlord almost always gets their legal costs paid as administrative charges under the lease. I repeat that the system does not work for residents.

Appointed managing agents have failed significantly, over and over again, to point out building defects in new blocks of flats. The truth is that there is a clear commercial incentive for building defects not to be highlighted. Indeed, if one were cynical, one might believe that a prime task of a developer-appointed manager is to ensure that the defects of a building are not revealed within the timescale of the warranty, after which date the cost can be placed on leaseholders’ shoulders.

In my constituency of Poplar and Limehouse, people view the Westferry Printworks debacle and the history of controversy as illustrating systemic priorities that lie in serving billionaires rather than the interests of local people. I appeal to the Government to put local people in need at the heart of their planning and housing agenda, and once and for all to end the scandal of leasehold for millions who have bought their home but do not feel like they own it.