Leasehold: Property Management Companies

Baroness Taylor of Stevenage Excerpts

Monday 19th February 2024 Lords Chamber

[Baroness Penn (Con)]

My Lords, the Government believe that forfeiture is an extreme measure and should be used only as a last resort. In practice, it happens very rarely and is subject to the right to relief. However, any changes to forfeiture would require a careful balancing of the rights and responsibilities of landlords and those of leaseholders. As a first step, we have asked the Law Commission to update its 2006 report on this matter, given the passage of time since then, and to take into account the implications of the reforms currently under way, so that we can consider what action should be taken.

[Baroness Taylor of Stevenage (Lab)]

My Lords, it is not just leaseholders who face these practices. What response can the Minister give to freeholders who face the imposition of private management companies charging extortionate and unregulated yearly fees, instead of having public areas adopted by local authorities? I believe this practice is known as “fleecehold”. Effectively, this means freeholders paying twice for maintenance: once through their council tax and again through fees to private management companies. What measures will the Government take to regulate these practices?

[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.