Housing: Commonhold

Lord Best Excerpts

Monday 10th February 2014 Lords Chamber

[Lord Faulks]

My Lords, the 100% rule, which is the subject of the Question from the noble Baroness, was in fact discussed in some considerable detail during the passage of this Bill through Parliament—the original Bill having been introduced by the party opposite. For reasons that we suggest are substantial, it was decided not to make the 100% rule a part of the law. Unfortunately, commonhold has not proved to be popular and there has been a very limited take-up. There is no obvious reason why this should be, particularly with new developments, although I accept it is much more complicated when converting leasehold to commonhold.

[Lord Best (CB)]

My Lords, I declare my interest as chair of the council of the Property Ombudsman, which receives complaints from leaseholders. I fear that no one in your Lordships’ House will recall my maiden speech, during the passage of the Bill to which the Minister has referred. In that, I expressed considerable hope that commonhold would solve a lot of the problems that leaseholders face. That has proved utterly unfounded and this piece of legislation must be one of the least successful on the statute book. However, it works in other countries and this approach to leasehold in the future would bear scrutiny from perhaps—if the Minister’s own department or the Law Commission will not take up the cudgels—a group of parliamentarians. Does the Minister support the idea of a group of parliamentarians having their own inquiry to see whether we can break out of the logjam that seems to leave leaseholders in a very adverse position?

[Lord Faulks]

The noble Lord is right about the degree of success. The House might like to know that only 16 commonholds have been registered in England and Wales, and the legislation came into force in 2004. None of them is particularly large. The largest, which has 30 units, is apparently a caravan site and only one with four units seems to be a conversion from leasehold.

During the passage of the Bill to which the noble Lord referred a number of increased rights were given to leaseholders, in particular of flats, to allow them to take over management of the building; to make it easier for leaseholders of flats to buy, collectively, the freehold of their building; and to allow unreasonable service charges to be reviewed by leasehold valuation tribunals. Part of the reason for the lack of take-up may be because other advantages accrued to leaseholders as a result of that legislation.

I am afraid that I am not in a position to give any of the assurances that the noble Lord required from me, but of course this is a matter that goes across different government departments and all his observations will be taken back to the Secretary of State.