Leasehold: Property Management Companies

Baroness Pinnock Excerpts

Monday 19th February 2024 Lords Chamber

[Baroness Penn (Con)]

My Lords, the Bill aims to grant freehold homeowners on private or mixed-tenure estates the same rights of redress as leaseholders in this area—equivalent rights to transparency on estate charges and the ability to challenge those charges at tribunal. I believe the CMA is also looking into this matter, and we look forward to receiving its final report.

[Baroness Pinnock (LD)]

My Lords, some freeholders, although not all, treat their leaseholders as a cash cow. I have two examples for the Minister. First, there was a ground rent increase—and there is no value at all to the leaseholder in a ground rent—of 113% this year, which was backdated three years, and the sum was demanded to be paid in full in four weeks. Secondly, there was a 23% increase in service charges this year. There is no accountability. Transparency there is, and challenge there can be, but nothing comes of it—and it seems that nothing in the Bill will change that. Can the Minister tell me that it will?

[Baroness Penn (Con)]

I can. The Government have consulted on a range of options to reform existing ground rents, having legislated in 2022 to set all new ground rents at a peppercorn rate. Following the outcome of that consultation, we aim to legislate in the current Bill before Parliament. As I say, not only will we give leaseholders greater rights to transparency on what service charges are charged for, to ensure that they are reasonable, but we are changing the cost regime in the courts so they can challenge those charges where they think they are unreasonable.