Leaseholders

Lord Ahmad of Wimbledon Excerpts

Monday 10th November 2014 Lords Chamber

[Baroness Gardner of Parkes (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as a leaseholder.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the schemes themselves are primarily responsible for publicising their service to leaseholders. My department has issued a number of press releases on the government and LEASE websites, and included information about the redress schemes in the recently published How to Rent guide. Additionally, we will be sending information to 30,000 leaseholders via the LEASE mailing list.

[Baroness Gardner of Parkes]

I thank the Minister for that reply. Can he tell me whether the ombudsman, to whom one will now have the right to apply for redress, will have the powers under that scheme to rule that if the head lessee or freeholder is found to be at fault, they cannot charge the costs back to the very people who made the complaint and were justified in doing so? This has now become a most unfortunate practice.

[Lord Ahmad of Wimbledon]

My Lords, first, I draw the attention of the House to my entry in the Lords register as a leaseholder and pay tribute to my noble friend’s consistent efforts in ensuring that the subject of leasehold remains on the Government’s agenda. In terms of the ombudsman, the chamber of the First-tier Tribunal stays, will continue to determine a wide range of residential leasehold disputes and will not be affected by the new requirement for managing agents to belong to redress schemes. For example, leaseholders and freeholders will still be able to ask the tribunal to decide whether a service charge demand is reasonable. Where the lease requires the freeholder to recover administration charges, the tribunal will still be able to issue orders to redress this.

[Lord McKenzie of Luton (Lab)]

My Lords, I draw attention to my entry in the register of interests. As well as the redress and complaints schemes arising under the 2013 Act, the Minister will be familiar with the EU alternative dispute resolution directive. The Government have 24 months after the directive enters into force to transpose it into national legislation. That will be in mid-2015, so the clock is ticking. Can the Minister confirm the Government’s continued support for that measure and say what progress has been made to date? In particular, can he say which pieces of domestic legislation have been identified for the transposition?

[Lord Ahmad of Wimbledon]

The noble Lord raises the issue of reform of leasehold legislation. The Government are aware of a number of concerns in the leasehold sector and have welcomed suggestions of how resolutions on leasehold can be improved, but at the moment they are not persuaded of the need for wholesale reform. The Government want to ensure that all leaseholders have appropriate avenues for resolving disputes. I will write to the noble Lord on the specific issue of the EU directive.

[Lord Lloyd of Berwick (CB)]

My Lords, in an area of the law where there is much existing legislation, as is I think accepted, does the Minister agree that the only way in which the leaseholder could find out his rights would be if the law were consolidated from time to time? Consolidation is a boring thing to do, as I know from experience, but it is important. Will he please give it a boost on this issue in particular? I ask the question as a former chairman of the consolidation committee.

[Lord Ahmad of Wimbledon]

All attempts to bring laws together across the field are welcome. The Government are making serious efforts on the issue of leasehold and the sharing of information. As I already alluded to in my original Answer, we have taken various steps to ensure that leaseholders are able to access information about the redress scheme and information about the First-tier Tribunal. There are also other efforts we are making, such as the model tenancy agreement, as a way of ensuring higher standards in this particularly important sector.

[Lord Stoneham of Droxford (LD)]

I draw attention to my housing interests given in the register of interests. I do not want to minimise the problems of leaseholders, but every year 300,000 tenants are evicted after making a complaint to their landlord about the state of their home. Would my noble friend the Minister agree that the sooner the tenancy Bill that is currently going through the Commons, proposed by my friend Sarah Teather, is put through this House, then the sooner tenants will be better protected against retaliatory eviction?

[Lord Ahmad of Wimbledon]

My noble friend makes an important point. The Government are supportive of Sarah Teather’s Bill. I think I already mentioned the steps we have taken, such as the model tenancy agreement, which safeguards the rights of tenants and, indeed, encourages much more long-term tenancies, which is I think to be welcomed by the elderly population and young families with children.

[Baroness Howarth of Breckland (CB)]

My Lords, tenants and leaseholders find it extraordinarily difficult, as we have already heard, to find their way through the complexities of the regulations and the present law. Could the Minister tell me what it would cost for a leaseholder, having got through that, to take action and make an application under the redress scheme regulations?

[Lord Ahmad of Wimbledon]

Each company is required to register under one redress scheme. If the scheme makes a decision, it will be for the company to pay. There are three different schemes and each has specific criteria. Without detailing each one, one costs £95 a year, but that is done on a case-by-case basis. Another costs £199, which is an all-inclusive cost. In the interests of time, I will write to the noble Baroness on the details of the three redress schemes, and share that information with the House.

[Lord Best (CB)]

My Lords, I declare my interest as chairman of the Property Ombudsman Council. It is an important point that the ombudsman redress services are free to the tenant or leaseholder and that they are paid for by the freeholder, the landlord or the agent and not by the person making the complaint. Does he agree that, if one has a complaint and needs redress, the best way to find out what to do next is to use Mr Google or AN Other and to put the words “property” and “ombudsman” together? In doing that, we hope, a lot of one’s problems will be solved.

[Lord Ahmad of Wimbledon]

The noble Lord speaks with great experience in the sector and he is absolutely right. To clarify, when I said, “the company”, I meant the scheme rather than the person to whom the complaint is made. He is correct to say that there is no cost to the leaseholder. In addition to Google, perhaps I may mention www.gov.uk as a source of information, as well as the LEASE website. We are also working closely with LEASE, which provides good information in this respect.