Leaseholders and Managing Agents

Florence Eshalomi Excerpts

Tuesday 28th February 2023 Westminster Hall

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Sir George. I pay tribute to my hon. Friend the Member for Brent North (Barry Gardiner) for securing this important debate. In my three years as a Member, I have had to speak on this issue so many times—I have joined long-standing Members in the queue of MPs talking about it—so this almost feels like déjà vu. It is a pleasure to follow the hon. Member for Warrington South (Andy Carter), who outlined many of the issues we are seeing up and down the country.

I will focus on the role of managing agents in the building safety crisis, which has impacted so many of my constituents in Vauxhall since the Grenfell tragedy—and, six years later, it is still happening. Just yesterday, I held an online surgery with a group of leaseholders whose managing agent has raised their annual service charge from £1,000 a year to over £30,000 a year. When I saw the email come into my inbox, I replied straightaway, because I could not believe those figures. That staggering increase was justified by fire safety problems but the agent will not even disclose the details of the defects to the leaseholders. I ask Members to pause for a second and think about what it would be like to receive such an email. Imagine the stress of being charged a thirtyfold increase in the middle of this cost of living crisis without any proper explanation.

The sad reality is that that case is not even rare. Since becoming an MP three years ago, I have had many constituents come to me in desperation because their managing agents are refusing to share the basic information about their building—somewhere they call home and have to sleep every night. The issue has been exposed by the cladding scandal. Agents were commissioning EWS1 inspections on behalf of freeholders, leaving leaseholders unable to sell their flats and liable for thousands of pounds of fire safety problems that they did not cause. Many agents would not even publish those reports.

[Munira Wilson (Twickenham) (LD)]

In my constituency of Twickenham, we do not have many high-rise blocks of flats, but we have quite a lot of low-rise blocks. I have had two cases come to me relating to two different blocks of flats in Twickenham, in which managing agents have wrongly commissioned fire safety assessments for buildings under 18 metres. In one case, the report has been shown to be flawed. The residents cannot sell their homes; they are trapped. In the other block, residents are potentially being charged up to £800,000 for remedial works that are not needed.

[Sir George Howarth (in the Chair)]

Order. Interventions should be brief, particularly given the time pressure.

[Florence Eshalomi]

I thank the hon. Lady for making that important point. That is the real insult that leaseholders face up and down the country: being forced to pay for the management of a block, even if the agent is not providing a worthwhile service. It is a slap in the face.

The sums we are talking about are not cheap; most end up being hundreds of pounds every year for leaseholders. We have to be clear that not all managing agents are like this; some are professional and diligent, and a number of them do a lot of great work. But the fundamental problem is that, whether agents are good or bad, leaseholders have no power to hold them to account. They do not even have a proper regulatory body that they can appeal to to enforce standards. Current arrangements leave leaseholders on the hook for almost everything, without having a say in how their building is managed.

The root of the conflicting motivations at the heart of this issue is the managing agents’ role. The problem is that, ultimately, they are not employed by the people who are paying—the leaseholders. We need freeholders to be accountable, and we need to ensure that they take responsibility.

I will leave my remarks there, but I hope that the Minister will hear the pleas from Members this afternoon. Instead of giving us warm words and telling us that he has heard us, he needs to outline a concrete plan for what he and the Department are going to do to empower leaseholders in a system where managing agents can be properly held to account, and we need a clear timescale for that work. My constituents in Vauxhall and leaseholders up and down the country cannot afford to wait any longer.