Leasehold and Freehold Reform Bill (First sitting)

Barry Gardiner Excerpts

Committee stage
Tuesday 16th January 2024 Public Bill Committees

[Richard Fuller]

There is nothing that leaps out at this stage.

Mr Martin Boyd: Nothing leaps out.

[Barry Gardiner (Brent North) (Lab)]

Q Mr Boyd, you just spoke about the accounting of funds. At the moment, there is no requirement to show any separation between sinking or reserve funds and the normal service charges for managing the property. Many leaseholders have suggested that that is a problem, and that they are not clear what is happening with their sinking fund. Sometimes they believe that the moneys that were there for future capital works on the property are being raided. Would it be a good idea for the Bill to contain something that enabled leaseholders to see precisely what was happening to those reserve or sinking funds?

Mr Martin Boyd: There were proposals in sections 152 to 156 of the 2002 Act to help to improve protection for leaseholders’ funds. Currently, we are left with a set of voluntary codes. One is applied by the Association of Residential Managing Agents—the Property Institute, as it is now called—and sets out that managing agents should hold separate bank accounts for each of the sites that they manage. The Royal Institution of Chartered Surveyors’ code does not require that. I am aware from experience of my and other sites that, in the recent period of higher inflation, some managing agents used consolidation accounts, accrued the interest in the service charge funds to themselves and passed very little on to the leaseholders. So yes, I think it would be very helpful if we had greater transparency and protection.

[Barry Gardiner]

Q Indeed. You nicely lead me to my other question, which concerns something else that was in the 2002 Act but was never brought into effect: the provision that, if the landlord had not complied with the rules around service charges and the charges were unfair, leaseholders should be able to withhold their service charge. I have no idea why that was never brought into effect, but would it be a good idea? The Bill sets out extensive obligations that have to be followed in relation to service charges. If those are not followed, should leaseholders have the right to withhold the service charge?

Mr Martin Boyd: I can tell you why it did not move forward. One of the reasons it did not move forward is that, when there was a consultation, the organisation that I now chair argued very strongly against the implementation of that section. That was one of the things that annoyed me when I found out about it over a decade ago. It is not something that we would argue for now.

[Barry Gardiner]

Q So you would agree that it would be a good provision to insert into the Bill.

Mr Martin Boyd: It was a very good provision, yes.

[Rachel Maclean (Redditch) (Con)]

Q Mr Boyd, it is good to see you. You have talked about commonhold. Would you mind just being quite succinct and clear on your view about commonhold? There are proposals from various groups who are active in the sector to make it mandatory to sell all new leasehold flats as commonhold. Would that be a good idea, and if not, why not?

Mr Martin Boyd: I am proud to say that it was LKP that restarted the whole commonhold project in 2014. At the time, we were told, “The market doesn’t want commonhold.” The market very clearly told us that it did want commonhold; it was just that the legislation had problems in 2002. One of our trustees, who is now unfortunately no longer with us, was part of a very big commonhold project in Milton Keynes that had to be converted back to leasehold when they found problems with the law.

I think the Government have been making it very clear for several years that they accept that leasehold’s time is really over. I do not see any reason why we cannot move to a mandatory commonhold system quite quickly. What the developers had always said to us—I think they are possibly right—is that they worry that the Government might get the legislation wrong again, and they would therefore want a bedding-in period where they could test the market to ensure that commonhold was working, and they would agree to a sunset clause. They had fundamentally opposed that in 2002, and we managed to get them in 2014 to agree that, if commonhold could be shown to work, they would agree to a sunset clause that would say, “You cannot build leasehold properties after x date in the future.” I think that that is a viable system.

--- Later in debate ---

[Barry Gardiner]

Q Mr Spender, I want to ask you about what I find to be one of the more complicated aspects of the Bill: the leaseback arrangements. Nominee purchasers can require a landlord to take a leaseback on certain units. Those are the units that, in an enfranchisement process, are not participating in the enfranchisement. You might have a block of 100 units, and 30 of them do not go in with the leaseholders who want to enfranchise. At the moment, they are then, in perpetuity, leaseholders, are they not? They cannot ever enfranchise because the others have already enfranchised. Should there not be a provision in the Bill to enable those locked-in leaseholders—if they have the money in future, because many times it will be because they did not have the money available at the time to participate—to buy their share of the enfranchisement?

Liam Spender: I agree; you have summarised it very well. To borrow a loose analogy from company law, there is something called a tag-along right. If someone comes along and buys a certain proportion of shares in a company, the other shareholders can exercise the right to tag along to join the purchase. That could be adapted to those who do not participate in an initial enfranchisement to address exactly the issue that you raise.

[Barry Gardiner]

Q Grand. If I can pursue that area, at the moment, the lease is granted to the demoted freeholder—so they become the head leaseholder, perhaps, and the other leaseholders are now subject to the head leaseholder. Their contract was always with the previous freeholder, who is now the head leaseholder. Should there not be some provision in the Bill that requires those minority leaseholders, who are still in a relationship with the former freeholder, to actually pay their service charge to the new freeholder? But there is not, is there?

Liam Spender: I think the provisions introduce a degree of complexity into buildings because, exactly as you say, you are creating a new class of landlord. That could be solved by—

[Barry Gardiner]

Q But the specific question I want to probe with you is whether there is any provision in the Bill to require the minority leaseholders who did not enfranchise to pay their service charge to the new freeholder, namely the majority who enfranchised. I cannot see where that contractual obligation lies in the Bill. All I can see is that they will continue to have a relationship with the previous freeholder.

Liam Spender: That is right: there is no statutory mechanism to transfer to the newly enfranchised freeholders.

[Barry Gardiner]

Q So you think the Committee should look at that very carefully.

Liam Spender: The Bill creates a lot of new areas of complexity, and that is certainly one that would merit detailed attention.

[The Chair]

Well, gentlemen, I think that is it. Thank you very much.

Examination of Witnesses

Katie Kendrick, Jo Derbyshire and Cath Williams gave evidence.

--- Later in debate ---

[Richard Fuller]

Q On the change in pension funds and investments, you may have different views about how important that is and my colleague asked you that question. However, putting yourself in the place of the people who own the freehold—some may be large overseas entities, some may be members of the peerage of the realm and there may be others—what is your view and what assessment have you made of the impact on them?

Jo Derbyshire: From my perspective, it is just about how all investment carries risk. This is no different. This is about rebalancing the scales in terms of leaseholders and freeholders. For me, it is about fairness for leaseholders. That is what the Law Commission was tasked with a few years ago, it is what we have been fighting for over the last however many years and that is what this does.

[Barry Gardiner]

Q I apologise because I came in slightly late today, Chair, so I do not know if people have declared their interest. I should say that I am a freeholder; I am not a leaseholder. I have been a leaseholder in the past, but always with a share of the freehold.

Ms Kendrick, you said that there were things that the Law Commission report had talked about that have not been included in the Bill. One of those is in relation to shared services. Often, in a mixed development, if there is a commercial element to the block of flats, with flats above, you will find that there is a common plant room or a common car park. I welcome the provisions in the Bill that say that you can go from 25% commercial to 50%; that is a good move. However, the Law Commission actually said something specific about whether you should be allowed, if there are shared services such as the car park or the plant room, to be able to take over control, because the flats—the leaseholders—would only have control over the plant room as it related to their block. Is that a provision that you think should be introduced? Otherwise, it makes a mockery, to a certain extent, of increasing from 25% to 50% if you are still going to be precluded from gaining control of your block because of the plant room or shared services.

Katie Kendrick: Yes, there are clever ways in which they exclude people from being able to do that. We welcome the increase to 50%, but they are very creative when they design these buildings, with the underground car parks and stuff, as to what they can do to exclude the leaseholders from taking back control of their blocks. It is all about trying to have control over people’s homes. We should be able to control our homes—what is spent. No one is saying that you should not have to pay service charges, but it is about being in control of who provides those services. At the moment, leaseholders have no control. They just pay the bills.

[Barry Gardiner]

Q And the residents having the right to manage that themselves.

Katie Kendrick: Absolutely, yes.

[Barry Gardiner]

Q If commonhold will not be in the Bill, would you support a principle that all future leasehold flats should have to be sold with a share of the freehold?

Katie Kendrick: Absolutely.

[Barry Gardiner]

Q And that any residents’ association should be able to have the management of the block?

Katie Kendrick: Absolutely. If they are saying that commonhold is not ready to rock and roll, to have a share of freehold to mandate, a share of freehold for new flats moving forward would be a good step closer.

[Andy Carter]

Q I hope you do not mind if I start by congratulating you on the work you have done with the National Leasehold Campaign. I know that my constituents in Warrington South have greatly valued the assistance and knowledge you have managed to secure through bringing people together. Thank you for the work you have done there. May we just go back a little bit? Can you tell the Committee what sort of problems leaseholders have when they go to buy their freehold?

Katie Kendrick: All three of us have now successfully bought our freehold. Yes, we are still here.

Jo Derbyshire: There are a number of things. The first is that most leaseholders do not understand the difference between the informal way and the statutory way to do that. The more unscrupulous freeholders will write to leaseholders with a “Get it while it’s hot” type of offer, which can be quite poor value for money. So, there is understanding the process in the first place. Then, regardless of which way you go—if you go the statutory way, currently you pay your own fees and the freeholder’s fees. There is an element of gamesmanship that goes on at the moment, which is why the online calculator is so important. Your valuer and the freeholder’s valuer will argue about the rate used to calculate the amount and then you will try and have some kind of an agreement. It is not a straightforward process at all. Cath will tell you what happened with her transfer, because they leave things in the transfer documents.

Cath Williams: Yes, they did. In my case, it took 15 months and £15,000 to get my freehold.

--- Later in debate ---

[Matthew Pennycook]

Q Some of them will not have a choice, will they?

Katie Kendrick: No, some people do not have a choice. People’s lives are literally on hold, and have been for many years, waiting for the outcome of the legislation. If we need further legislation to enact the Bill, people cannot sell. Housing and flat sales are falling through every single day because of the lease terms and service charges. It is horrendous. It will grind the buying and selling process to a halt.

[Barry Gardiner]

Q I want to ask you about this whole business of people being unable to sell, and, in effect, the interaction between what the Government have tried to tackle in the Building Safety Act 2022 and what we have in this Bill.

Under the Building Safety Act, the provision is to appoint a designated person—an agent—to deal with the safety of the building. Often it will be the developer who is responsible for the remediation of a building that has fire safety defects and so on, which the Government are quite rightly trying to address, but they will argue that it is not possible to do that unless they have control over the management of the block as a whole. Therefore, there is a conflict between the Building Safety Act and the provisions in this Bill to help leaseholders gain the right to manage.

You might have just enfranchised and got the right to manage your own block, yet there is now an appointed person who will be told by the court that they have the right to manage the block. Very often, it will be the person you have just liberated yourself from. You will have just enfranchised yourself from that freeholder, only to find that they are now back in control. Do you feel there is a way in which the Committee should try to remediate and address that problem when it is looking at the Bill, and do you have any ideas as to how we should go about it?

Cath Williams: First of all, the situation that flat leaseholders are in at the moment, where they have building safety issues and leasehold issues, is so complex. It is horrendous. We hear daily in the National Leasehold Campaign about these poor leaseholders. It is really heartbreaking.

[Barry Gardiner]

It is awful.

Cath Williams: People are at breaking point.

[Barry Gardiner]

People have committed suicide, have they not?

Cath Williams: People have committed suicide, yes. That is worth noting.

They ask for advice. We have never been flat leaseholders; that is the first thing, but there is a lot of support in the group to try to help people navigate their way through the Building Safety Act first of all, and now we have this Bill as well. In principle, I think they would really welcome some sort of cohesion between the two. I don’t know what that would be; it is really hard.

Katie Kendrick: It is really difficult because we are encouraging people to take control, but by doing that they are liable for more of the building’s safety. The two Bills have to work together.

[Barry Gardiner]

Q There is a real tension here, is there not?

Katie Kendrick: There is.

[Barry Gardiner]

Q You have talked extensively about ground rent and, Ms Derbyshire, your situation with it doubling. We all know the story about the inventor of chess, who asked for a grain of rice on the first square as his reward as long as it doubled until the last square, and then there was not enough rice in the world to provide it. This is clearly inequitable. You said that you welcome the provision in the Bill to be able to get rid of ground rent—to take it down to a peppercorn. Given that we have the consultation at the moment, would it not better if the Government just did that rather than you having to pay for it, which is what is recommended in the Bill? You should not have to pay to get out of a situation that is unjust. It was unjust in the first place, and it would be much better if the Government simply moved the consultation onwards and got rid of it.

Cath Williams: Yes.

Jo Derbyshire: The Leasehold Reform (Ground Rent) Act 2022 has essentially created a two-tier system where you have new builds without ground rent. As Cath mentioned, we are concerned that clause 21 and schedule 7 of the Bill seem to say a qualifying lease for buying out to a peppercorn rent must have a term of 150 years. We have seen lots of examples in the National Leasehold Campaign of new build properties—flats in particular—where the lease is 99, 125 or 150 years from the start, so a whole swathe of properties would be automatically excluded.

However, for us, because ground rent is a charge for no service, peppercorn is the answer. We also fear that, in terms of the timetable for legislation and getting this through, the sector will fight intensively and try to tie this up in the courts for years. It has nothing to lose; why wouldn’t it?

[Andy Carter]

Q Katie, can I just go back to your earlier point about how lots of sales are falling through? Can you just explain why that is? What is causing sales to fall through on leasehold properties?

Katie Kendrick: Because an escalating ground rent worries mortgage lenders and buyers are unable to get mortgages because of an escalating ground rent. Where that is because of the £250 assured shorthold tenancy issue, my understanding is that that will be sorted through the Renters (Reform) Bill, so that will close that loophole, but lenders do not like—for most leases now, the doubling has half-heartedly been addressed and a lot of leases are now on RPI—the retail price index.

However, with RPI being the way that it is—it has been really high in the last couple of years—some of those ground rents are coming up to their review periods and are actually doubling. Therefore, RPI, as Jo said many years ago, is not the answer. Converting to RPI is not the answer because an escalating ground rent is still unmortgageable, and it takes it over the 0.1% of property value, which, again, mortgage lenders will not lend on.

Therefore, a lot of mortgage lenders are asking leaseholders to go to the freeholder and ask them to do a cap on ground rent, which is then costing the leaseholder more money to get a deed of variation from their freeholder. That is if the freeholder agrees at all, because the freeholder does not have to agree to do a deed of variation to cap the ground rent. That is coming at a massive cost if someone wants to sell, but without that people are losing three, four or five sales, and people have given up because their properties are literally unsellable.

Cath Williams: There is a house on my estate where sales have fallen through twice already. It is a townhouse; it is worth about £220,000. The ground rent currently—it is on an RPI lease—is £400, which takes it over the 0.1% of property value. Two sets of buyers have had problems getting a lender to lend in that situation.

--- Later in debate ---

[Rachel Maclean]

Q I just want to clarify your understanding of something that Mr Gardiner said earlier. I might need to put this to the Minister later, but Mr Gardiner said that if the new provisions on ground rent go through and ground rent goes to peppercorn or zero—I might be misquoting him.

[Barry Gardiner]

You have been spot on so far.

[Rachel Maclean]

You mentioned that in the new Bill leaseholders will have to pay to get their ground rent to zero. Can you set out what that provision is? Where is that in the Bill?

Cath Williams: I don’t think we know. That was one of our questions. There is a process in the Bill about how a leaseholder can acquire the peppercorn ground rent, but who pays for that is not clear. I think that was raised before. I do not think leaseholders should pay, because it should not have been there in the first place.

Katie Kendrick: Or there should be a prescribed cost—“apply for your peppercorn now”—with a simple process. Otherwise it will be exploited, and lawyer will charge different amounts to convert. You can see what will happen, so it needs to be streamlined. Whatever we go for, it needs to be streamlined.

Cath Williams: And we need an online system that cuts out everybody in the middle, so that there is no confusion or discussion about what it should cost.

--- Later in debate ---

[Dehenna Davison]

Q What would you consider a reasonable time? I mean, 24 hours would be great, but—

Amanda Gourlay: Twenty-four hours would be great, but that would probably sow total panic at the receiving end—I know that it would if I received that and I was doing something else. It will depend very much on the nature of the property. There are some very complex developments over in the east end of London. On the other hand, there are Victorian houses that are only two or three flats, and that should be much more straightforward.

I am aware that people have been able to pay for, say, a seven-day or five-day service, and there has been an uplift in the price for that. I am not the best person to ask about what the price should be. What I would say is that if a managing agent to whom this request would normally go is keeping their records up to date, one would hope that with the progress we have in software nowadays, that should very much just be the pressing of a button.

On work that is going to be carried out in the future, I have heard talk about, for example, mandatory planned maintenance plans. I have not seen those in the Bill. If a building or property is being well managed, one would expect there to be a plan for the next five or 10 years—what is needed to be done in terms of decorating, lift replacement and so on. Again, if that is in place, I would anticipate that it should be relatively straightforward to produce the information. I cannot give a specific answer; what I would say is that if we are all keeping our records up to date, that should be a relatively speedy process.

[Barry Gardiner]

Q I understand that you were involved in the Canary Riverside judgment just before Christmas.

Amanda Gourlay: That is correct—yes. Forgive me; I was involved in Canary Riverside between 2016 and 2017. My involvement finished in June 2017.

[Barry Gardiner]

Q Thank you. But you are aware of the judgment that came through just before Christmas in the case.

Amanda Gourlay: I am not sure that I am—no.

[Barry Gardiner]

Q Were you involved in relation to the uncovering of the £1.6 million commission for insurance?

Amanda Gourlay: No, I was not involved in that element of it.

[Barry Gardiner]

Q In that case, I am probably better putting those questions to a later witness.

In relation to that case, and on the accountable person provisions and section 24 amendments in the Building Safety Act—this relates to a question I asked earlier—the tribunal decided in the Canary Riverside case that the section 24 manager cannot be the accountable person, and that risks the section 24 management order failing, and the failed freeholder coming back to take control of the leaseholders and their service charge moneys. The implications of that decision really are quite dramatic. It means that the lifeline of the section 24 court-appointed manager provision from the Landlord and Tenant Act 1987 has been removed from leaseholders, particularly those who cannot afford to buy their freehold or do not qualify for the right to manage. How should we address that problem in the structure of the Bill?

Amanda Gourlay: I do not think you need to do that in the structure of the Bill. Casting my mind back to the Building Safety Act, which is now in second place to the Leasehold and Freehold Reform Bill in my mind, my understanding is that there is provision for a special measures manager in that Act. If that were brought into force, one would have a recourse. I am very happy to open my computer and look at the Act, but I do seem to recall that there is provision for a special measures manager to take over the building safety or the accountable person role in a manner of speaking. I say that in the loosest terms, without having checked the law.

[Barry Gardiner]

Q I am sure Ms Maclean will have details from her past life. Thank you for that—it is extremely helpful. You referred to clauses 27 and 28 and said that the word “arising” was one that troubled you. Could you point us to which clause that is in, so that we can be clear about it? You will have heard the question I put to another witness about making provision in the Bill, as there had been, although it was never brought into play, in the Commonhold and Leasehold Reform Act 2002, for leaseholders to be able to withhold their service charges if all that is set out in proposed new sections 21D and 21E has not been complied with?

Amanda Gourlay: There is always a concern looking forward as to how things might play out. I will deal your question on “arising” first, then come to your other point. Clause 28(2) inserts proposed new section 21D, “Service charge accounts”. Subsection (2)(a)(i) talks about the variable service charges “arising in the period”.

[Barry Gardiner]

Ah, “arising in the period”. Gotcha.

Amanda Gourlay: Turning to the second part of your question, one of the very big difficulties with the reform of leasehold is that good and bad—to put it in very binary terms—do not sit on one side or the other. While it seems to me that in an appropriate situation it would be entirely reasonable for a leaseholder to be able to withhold their service charges, there may equally be leaseholders who consider that this is an opportunity not to pay, for different reasons. There is always that risk. If one does not pay one’s service charge and is obliged to do so—for example, by going to tribunal and the tribunal says that actually £2,000 is payable—one is at risk of legal costs, which I am sure we will come on to in relation to the risk of forfeiture.

[Barry Gardiner]

Q I was thinking not so much about where there is a dispute over reasonableness but more about whether the process that is set out in proposed new section 21D had been followed—for example, someone had not laid the accounts within six months and had not gone through all the set requirements in the Bill. Rather than it being a dispute about substance, the charge would be withheld on the basis of a failure of process by the freeholder.

Amanda Gourlay: Yes, and I understood your question that way. I think my concern is that if there is a minor breach, is that simply a situation where we withhold service charges entirely? The question is the nature of the breach and whether it is or is not a breach. In principle, I would agree that it would be a sensible form of enforcement, because it is the absolute. It is the most draconian form of enforcement. One should always bear in mind, however, that if a third-party management company—a residents management company—is obliged to insure a building and has absolutely no wherewithal to insure it, there is that risk. Things may need to be done that simply cannot wait but, in principle, I see no reason why that should not be a remedy for failure to follow the process.

[Barry Gardiner]

Q Although I said at the outset that I would not pursue the insurance costs with you, I think we can probably agree that the £1.6 million commission that was ruled illegal will take out the idea of commission—but that will move to fees instead. Given what you said about “arising”, do you have similar fears that fees for work charged might also open that up to a multitude of sins in the Bill?

Amanda Gourlay: Do you mean generally, or in relation to insurance?

[Barry Gardiner]

In relation to insurance—because it will no longer be possible to charge commission, but it will be possible to charge a fee.

Amanda Gourlay: That is always a risk. In fact, that is a risk across the whole Bill where more obligations are imposed on a landlord. If the costs of those obligations are recoverable under the terms of the lease as part of the management, it is almost inevitable that charges will go up. They will have to: I am going to have to do more work, so I would like to be paid more.” The only control of those that we have at the moment is under section 19 of the Leasehold Reform Act 1967, which is whether the costs are reasonable in amount for the standard of work that is provided. One would hope that there would be degrees of transparency, but of course there is no obligation to account necessarily for the fees, save for the limitation of administration charges and the obligation to publish a schedule of fees of administration charges.

Again, however—I am sorry that I am providing such long answers—where it comes to publishing a schedule of administration charges, that is quite straightforward for most cases, but clearly if someone wants to carry out a significant change to a flat on the 15th floor of a building, the costs will be difficult to quantify in advance. There is still wriggle room, I think, in the administration charge limitations for costs to be higher.

[Barry Gardiner]

Finally, proposed new section 21E of the 1985 Act talks about annual reports, while proposed new section 21D sets out the basis of the accounts and when they must be presented. What is your understanding of the difference between the report—as set out,

“before the report date for an accounting period, provide the tenant with a report”—

and the accounts, which have to be presented at the end of the sixth month after the period? Is there any requirement in the Bill as drafted to ensure that the information available in the accounts is greater or more detailed—indeed, in any way different—from the report?

Amanda Gourlay: That is a question with which I have battled for a number of hours. The conclusion I reached was that proposed new section 21D very plainly envisages the involvement of a chartered accountant—a qualified accountant; proposed new section 21E is different because it would appear to be more narrative, a more general description of the information that has to be provided.

If you look at the Bill, subsection 21E(3), which entitles the appropriate authority to make provision about information to be contained in the report, is extremely broad. It refers only to

“matters which…are likely to be of interest to a tenant”.

That is a very wide scope. The information in effect has to be provided within a month of the service charge year-end, whereas the service charge accounts must be provided within six months.

While I am on that point, proposed new section 21E is enforceable under the enforcement provision, which I think is clause 30; rather peculiarly, however, proposed new section 21D is not. I invite the Committee to consider whether that new section 21D should be brought within the scope of clause 30.

[Barry Gardiner]

Thank you. That is extremely helpful.

[Matthew Pennycook]

Q I just wanted to follow up on something, so that I am clear in my own mind in relation to Mr Gardiner’s question about the provisions in the 2002 Act that have not been brought into force, and it directly relates to what you have just said about proposed new section 21D.

In some senses, many of the new requirements in this section are covered by the enforcement measures in clause 30. Is proposed new section 21D the only example, or are there other examples, of where that power in the 2002 Act might be considered necessary for a leaseholder to use, because the enforcement provisions do not cover the full gamut, if you like? I suppose that I am trying to get to where the enforcement clause is lacking. Is Mr Gardiner correct in specifying that there are circumstances in which you would want to withhold because the non-payable enforcement clauses do not bite in the relevant way?

Amanda Gourlay: I am instinctively nervous about withholding, even if it is simply a question of process.

--- Later in debate ---

[Rachel Maclean]

Q Have you ever acted for freeholders against leaseholders? Have you ever found that the leaseholders have been egregious, rather than the other way round?

Amanda Gourlay: I believe I have acted for freeholders against leaseholders on occasion.

[Barry Gardiner]

Q You referenced the damages under proposed new section 25A of the Landlord and Tenant Act 1985, which “may not exceed £5,000”. The tribunal does not have to award £5,000; it is a ceiling, rather than a floor. Often a single leaseholder will go to the tribunal and get an award, but they are representative of problems that all the other leaseholders have. Rather than saying that damages under the proposed new section may not exceed £5,000, would it make sense to say that damages to each leaseholder may not exceed £5,000?

Amanda Gourlay: That would make sense, but damages are not an appropriate remedy in this particular situation. It is very rare that a leaseholder will suffer financial loss. It is more about encouraging good behaviour.

[Barry Gardiner]

Q Thank you. Will you send me a full report on the details that you did not get a chance to share?

Amanda Gourlay: I will, yes. I had no intention of making a speech, and I am sorry if I trespassed on people’s patience.

[The Chair]

That is fine. Do not worry.

Ordered, That further consideration be now adjourned.—(Mr Mohindra.)