Baroness Greengross
Main Page: Baroness Greengross (Crossbench - Life peer)
Baroness Greengross
My Lords, I start by congratulating the noble Baroness, Lady Gardner, on securing this debate. It is a very important issue. I declare an interest as president of the Association of Retirement Housing Managers. I just want to make a few points about older people in retirement leasehold schemes, as the noble Baroness, Lady Maddock, suggested I might.
I start with the resolution of conflict situations, and there are quite a lot of them. As someone who for many years headed a charity which set up a mediation scheme for people in leasehold housing schemes, I was aware of the conflict. It is difficult, not least for the providers of schemes, who are dealing with people who are often prepared to spend 12 or more hours a day focusing on those issues and who can make amazing barrack-room lawyers—I do not want to be insulting—because they have so much time to concentrate on that. So it is a difficult as well as an important issue.
The industry might be better served in conflict resolution by stronger regulation through an independent regulatory body or, in the absence of that, some form of self-regulation underpinned by guidelines and codification—the sort of thing that the Association of Residential Managing Agents has proposed and supports. That is worth considering. To help residents avoid costly litigation processes, perhaps the Government could implement a dispute resolution structure based on compulsory mediation as a first step, as recommended by the London Assembly report on service charges. That might be helpful. We know that increased clarity is required on what is included in the annual service charges, what is not, and what is retained in reserve for contingency funds and what precisely those funds cover. People are often greatly lacking in knowledge about that.
On other charges, we know that the Office of Fair Trading is currently investigating transfer fees, which are payable to the landlord by the owner or their family once the property is sold. The level of fees is set out in the original lease, but the scale of the fee varies widely between property companies. Would the Government consider a scaled fixed fee of some sort, which might be helpful? There also appears to be some ambiguity on the issue of the house manager flat rental, charges for which are levied with the service charge. If people are dissatisfied with that charge, it is not entirely clear what can be done to resolve the issue. Might part of any new guidelines help to address that, and will landlords as well as management companies be expected to sign up to codes of practice which would cover allied issues such as the placement and cost of buildings insurance and any associated premium commission, which require a consistent and open approach across the industry?
Finally, older residents in retirement housing are much more likely to experience unforeseen events, such as a decline in health status or the death of a partner, than younger people and that might mean that they have to change accommodation or—more likely—have to make adaptations to their accommodation fairly rapidly. Codes of practice should include provisions to help older people and their families in those circumstances and to consider the additional provisions they may make to help older people in particular.
Housing designed for older people whose needs change as they age faces an almost built-in conflict of interest. They need more services as they age, so the costs are going to rise as more care is provided. Their income tends to be less over the years. They wish to reduce the cost but they need more services. Older and frailer residents are more costly, so when residents manage the schemes themselves they may wish to sell to active, fit and therefore younger people. There is a conflict in what extra-care housing is intended to do. It is there so that as you get older and, perhaps, more frail, the services increase to meet your growing needs but if only younger, fitter, stronger people are invited into a complex you are almost defeating the object. I do not know if this problem can be solved but it is there unless people massage the criteria for entry into this sort of housing. This is sad but it presumably happens from time to time.
These are issues which the Government and Members of your Lordships’ House who are expert in this sort of thing need to consider carefully.