Baroness Gardner of Parkes
Main Page: Baroness Gardner of Parkes (Conservative - Life peer)
Baroness Gardner of Parkes (Con)
My Lords, I have asked many Questions in your Lordships’ House but the only Question I have ever asked in all those years on which there was not a single supplementary from any part of the House was about leasehold. No one knew what I was talking about. As I came out into the Lobby after the Question a number of people came up to me and said, “I would have loved to have come in on your Question but I had no idea what it was about”. That is still the problem with leasehold: people really do not understand it until they are already caught up in it, particularly if they are caught up in it in the wrong way because they did not look at the lease before signing it or they were so thrilled with what they found that they put aside any worries about the future. However, it is important that we all begin to understand it more. It affects more than 5 million people, mostly in London but all over the country. Even in political terms, people should be aware that 5 million votes are worth having. It is important.
My interest is declared in the register: I have owned a leasehold flat for a good many years. I bought it for the day when I could not manage stairs—but I still have not got there. At the time, all those years ago, we had a residential porter who took any parcels, let people in and did all sorts of useful things. What happened? The head lessee became a person who was interested only in making a profit out of it. They decided that the flat which the caretaker was living in was too expensive for that money to be wasted like that, so they fired the caretaker and now have someone who comes in for two or three hours a day and the money from that is now in the head lessee’s pocket. There has been too much of this profiteering at the expense of residents in these blocks. For years we had a qualified building surveyor who would look at the block and decide what should be done. No one ever looks at it now and it is ready to disintegrate if they do not get something done pretty quickly.
Important issues arise all the time. There are more than 2 million leaseholders who pay, in all, over half a billion pounds annually in service charges. That is a lot of money. Who is holding the money and how secure is the fund? Many of these issues have now been addressed by the fact that we are to have a redress scheme. I ask the Minister to confirm that that will be in place soon. The process of implementation has been a bit slow when you think about how long ago we passed the scheme.
Transparency is perhaps the biggest problem for everyone. People do not know what they are being charged for and whether or not it is legitimately required. In the block to which I referred, where I have a flat, they organised a new insurance policy without consulting anyone. Whereas last year residents of flats had to pay an excess of £250 on any claim, this year the excess has gone up to £2,500. The head lessee, who had the policy, has renegotiated it without any consultation so that every tenant in the flats will be liable for so much money that he will have to pay very little at all because we will be paying for it in the £2,500—a tenfold increase. I think that that is very unreasonable.
In 2009, in supporting better regulation, the British Property Federation drew our attention to the fact that Sections 152 and 154 of the 2002 Act were due to be in force at that time. They are still not in force. I ask the Minister what is happening with those sections. They are protective provisions and, as they are part of our law, they should come into force.
Leaseholders are entitled to know how their money is spent and transparency is one of the major issues. Sir Peter Bottomley has done quite a lot in the Commons on this issue. People are entitled to ask questions and get answers that are honest and can be established. There have been too many occasions—cases on the record—where people have found that they are making payments for things such as service charges but half of that money goes into the pocket of the head lessee or freeholder, who has made a deal with or even owned the builders or insurance company used. It is all quite wrong that that sort of thing should be happening and that leaseholders do not get honest answers when they ask about it. It is all being covered up all the time.
In 2007, Mark Prisk—a previous Housing Minister—put down an amendment to the then Consumers, Estate Agents and Redress Bill. He talked about “rogue” and “unscrupulous” agents and how the industry,
“now handles over £12 billion of people’s money annually”—[Official Report, Commons, Consumers, Estate Agents and Redress Bill Committee, 24/4/ 07; col.191]—
and so on. I am therefore glad that, last year, we at least agreed the amendment to the Enterprise and Regulatory Reform Act which has brought in registration of managing agents. Although that will be very welcome, I ask the Minister to confirm that it is still online to come in this year. It really has been a fair time already. There are good agents but protection for leaseholders is at a pretty low level and, as I said, there is no protection until that comes in, along with a redress scheme, which will be very valuable.
As the noble Baroness, Lady Maddock, said, I am a great supporter of commonhold developments. Leasehold property exists only in the UK and Hawaii. It is therefore pretty rare, and I do not consider it acceptable. However, the point about the 100% requirement is that 100% of the people in an existing block of leasehold flats need to want to change. That is very wrong. I have had Parliamentary Answers from different Ministers at different times which say that, “Yes, it is wrong and it should not be; it is impossible”. They say it is impossible to get 100%, and I am quite sure that that is right. All you have to have is a rogue landlord paying one person to abstain or deny and you have lost your 100%. A simple majority would be all right, but even a bit more than that might be possible. There are so many of these blocks where people live overseas and getting hold of them is not easy.
Baroness Gardner of Parkes
My Lords, please excuse me if I repeat something that I said earlier because running in and out does not help. It is high time that we had a consolidation Act. Since 1985 we have had about a dozen new housing-related Acts—I have been in the House since 1981 so have participated in every one of them—and each one has changed parts of the previous one. It has reached the point where even solicitors specialising in these matters have to consult Act after Act to be sure of the present legal position. The law should be clear, simple and capable of being understood by ordinary people. The Government should ask the Law Commission to review all these property Acts with a view to consolidating them. It would be better for the country and better for everyone. However, the Law Commission does nothing unless the Government ask it to because the Government have to meet the costs. The Law Commission does nothing now under any other circumstances.
Having served on an industrial tribunal for 20 years, I am a great believer in the tribunal system. Something has gone very wrong with leasehold valuation tribunals since the basic £500 maximum that you were asked to pay has been changed to a £500 minimum to bring your case at all, and with possibly very heavy costs after that. We also have the practice, which I have mentioned in the House before, whereby, win or lose, the head lessee or freeholder charges his costs in the tribunal back to the leaseholders. That was never the intention. The intention was that a leaseholder would not normally have to meet any costs and this would be a basis on which everyone could present their own cases. There is now a new tribunal system, as from last October, and I think we will be hearing a lot of dissatisfaction about this very shortly.
Rereading Hansard from the time made me wonder where the leaseholder tribunals went so wrong. The intention was for this to be a simple and inexpensive system. I am really quite surprised to find problems because I drew attention to the possible dangers at the time and half those dangers have arisen. Leasehold property has really complex arrangements. I would like to see it abolished but, on the other hand, that is a long way off. Every little bit of progress helps and it is important that we press on and teach people more about what it is all about.