Leasehold and Commonhold Reform
Debate between Oliver Colvile and Peter Bottomley
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
My interest in this important topic stems from two long-running cases in my constituency. They relate to two right-to-manage properties housing mainly elderly and retired residents: Elim Court and Regent Court. My hon. Friend the Member for Worthing West (Sir Peter Bottomley), who is also interested in the matter, has given me an enormous amount of advice, for which I am grateful. I also want to thank Rebecca Cattermole and Martin Boyd for all their help in preparing me for today’s debate; I have no doubt they will mark me out of 10 when I have concluded.
I should declare an interest. I still have an interest in a company I set up, which gives property developers advice on how to manage public consultation. I also own a leasehold in my constituency, and I am delighted to say that the other leaseholders and I own the management company. I think we manage the whole thing very well indeed.
I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) and my hon. Friend the Member for Worthing West on securing this incredibly important debate. I also thank them for their stewardship of the all-party parliamentary group on leasehold and commonhold reform.
The Elim Court case has attracted national attention to right-to-manage law. Elim Court’s RTM company, which was established for this purpose, made an application to acquire the right to manage a block of flats at Elim Terrace in Plymouth under part 2 of the Commonhold and Leasehold Reform Act 2002. The Act created a no-fault right to manage, under which, on satisfaction of some preconditions, a qualifying majority of tenants of a building containing leasehold flats can establish an RTM company to take over management of the building from their landlord. The no-fault part of the Act meant they did not have to show fault in the way the building was managed.
Elim’s landlord declined to participate in the RTM process and opposed it through the Leasehold Valuation Tribunal—now more commonly known as the first-tier tribunal—which accepted his arguments on a technicality. On appeal, the decision was upheld, and the case thrown out. My constituents in Elim Court have been battling for years for the right to manage their property. The legal system that was put in place in 2002, while welcome, is in desperate need of vast improvement.
This really is the tip of the iceberg. Since its inception in 2002, the right to manage has proved popular with leaseholders who want to take control of badly managed blocks. However, it is an over-complicated scheme, riven with pitfalls and technicalities that are difficult to overcome without sound legal advice. I have been told that gaping holes have emerged in the 2002 legislation that need to be addressed urgently due to the increase in RTM applications and to landlords refusing to release their tight grasp on highly lucrative management arrangements, while finding every possible loophole to thwart applications by leaseholders and residents. That is an abhorrent way to treat anyone, let alone the retired and the elderly.
A further issue that Elim Court and Regent Court have encountered is the high costs involved in tribunals and appeals, which have, indeed, become something of a cash cow for lawyers. The fact that RTM is so plagued by loopholes means that the no-fault basis on which leaseholders can obtain the right to manage is proving costly. Currently, Elim Court is awaiting a hearing at the Court of Appeal—as I explained earlier, the process has been highly expensive. If the residents were to walk away now, they would be set to lose between £25,000 and £30,000—a very large amount.
Sir Peter Bottomley
Through my hon. Friend, may I suggest that the Law Officers look to see whether they can take over the case and carry it forward at public expense? If this is a question of justice and law, it is about time Justice Ministers got involved.
Oliver Colvile
I thoroughly agree, and I thank my hon. Friend for giving such clear advice, as he generally does.
I would now like to go into further detail about the Regent Court case. In 2012, during severe storms in Plymouth, the roof blew off the building. No insurance claim was paid, leaving the leaseholder with a staggering £114,000 bill. The insurance company, AXA, claimed that the condition of the roof previously would have voided the policy, prompting the landlord to seek to recover £140,000 from the leaseholders—more than the bill for the roof repairs.
After much investigation, the ombudsman has only just reached its wholly unsatisfactory decision, declining to investigate whether there was a fault in the claims-handling process, because the insurance company had asked it not to. It remains unclear whether the landlord withdrew the claim or it was withdrawn because it was disputed. What I have learned recently is that the loss adjuster’s report may have missed key information that would have meant that the claim should have been paid out to the leaseholders.
The case illustrates that leaseholders have few rights if the insurance company and the freeholder do not want a matter investigated. Again, elderly residents are being treated in this way. Regent Court is a particularly shocking case, as the landlord has not had an interest in managing the building since the second half of 2013, when the leaseholders took control via their RTM company.
Sir Peter Bottomley
The House is following this case keenly. Is my hon. Friend telling the House that the freeholder had the responsibility to make sure the roof was maintained, but did not, and that he had the responsibility to deal with the insurance, but it was apparently not valid or he was not going to claim on it? The leaseholder therefore failed doubly—in terms of the cost of the roof and the cost of the insurance.
Oliver Colvile
That is exactly the position, and it certainly needs to be looked at.
The ombudsman’s decision highlights the fact that millions of leaseholders face the same position across the country. Some landlords also happen to own an insurance broker, as we heard earlier, creating loopholes and conflicts of interest across the board. The Financial Conduct Authority is fully aware that leasehold building insurance is a problem and has reported that high commissions—up to 40%—have been paid on insurance. In 2014, the Competition and Markets Authority investigated leasehold property management, and one of its specific recommendations was that the FCA should look into the matter.
I would like to see a more flexible, more transparent and less complicated system for RTM, insurance issues and service charges for leasehold properties. The current system has been picked apart by lawyers, and the original Act is not fit for purpose. I urge the Government to relook at leasehold and commonhold reform and to sit up and realise that possibly millions of people across the country face very real blockades, when all they want to do is manage their own property—a right this Parliament gave them almost 15 years ago.
To conclude, it seems almost unfathomable that we expect pensioners to cope with some of our most complex legislation. If we in Parliament do not understand the process, and officials do not understand the process, why on earth should we expect these elderly consumers to? It may be too late for the residents of Elim Court and Regent Court, although I am keen to pursue those issues, but we owe it to future leaseholders to ensure that they are not swindled out of hundreds of thousands of pounds by greedy landlords and cowboy insurance companies.
Mental Health
Debate between Oliver Colvile and Peter Bottomley(12 years, 6 months ago)
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Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I, too, congratulate my hon. Friends the Members for Loughborough (Nicky Morgan) and for Broxbourne (Mr Walker) on securing this Backbench Business debate in the first place. Indeed, this is an historic moment, for the simple reason that it must be the first time that three former association officers of the Battersea Conservative association have found themselves speaking in the same debate.
Oliver Colvile
I am sure my hon. Friend is quite right.
I have followed this issue very closely, because in my maiden speech I gave a pledge that I would try to raise the issue of mental health for our veterans during the course of my time in the House of Commons, however short or long that might end up being. I hope very much that I have been good to my word. Only too often when we have had debates on mental health or veterans issues in the House, we have found that it has been the Armed Forces Minister answering, and although he has always done a brilliantly good job of explaining what is going on, the debate has unfortunately never had a joined-up feel about it—for instance, by including Ministers from the Department of Health. That is why I very much welcome this debate.
I congratulate both the hon. Member for North Durham (Mr Jones) and my hon. Friend the Member for Broxbourne on their sheer candour in speaking about this issue. If we could capture my hon. Friend’s energy, we would sort out the national grid once and for all.
I recently had a Falklands veteran come to talk to me about how he feels he is being discriminated against in his benefits. That is something we most certainly need to look at as a House. My interest in this whole matter began in 2000, shortly after I was selected as the candidate in Plymouth, Sutton, when I went out with the people from one of the churches and saw them handing out soup and sandwiches to various people. Plymouth, being a major—indeed, principal—naval port, most certainly has a lot of veterans issues. There was a man on that occasion who had left the Army and was sleeping rough. He had come across real problems because he had taken to drink—he had obviously taken to drugs as well, which was also a very big issue.
Indeed, when my father served in the Navy—he went in as a boy sailor at the age of 14, serving in Dartmouth and subsequently in the second world war—he had the job of picking up the head of a man he was sharing a cabin with and throwing it over the side, into the sea. I think that would most certainly have given me the heebie-jeebies, I can tell you that, although it did not seem to affect him at all.
A number of Members have made a series of points in this debate which I fully agree with. I was going to talk a little bit about the position now, as we commemorate the Falklands war, 30 years on, but my hon. Friend the Member for Mole Valley (Sir Paul Beresford) has already dealt with that. However, we have to recognise that the families are the first people to get to know whether mental health issues are arising and how combat stress affects them. We need to remember that at the time when my father ended up having to deal with these issues, there were no mechanisms in place to look after his mental health or even try to take it forward. As others have said, my hon. Friend the Member for South West Wiltshire (Dr Murrison) has produced a very good report, which has very much formed the basis of Government policy in this area.
I ended up talking to Mind during the course of the last few days. The hon. Member for Plymouth, Moor View (Alison Seabeck) and I are speaking as one, as she made the point that the amount of money devoted to mental health in Plymouth is an issue. It seems that money has been taken away from mental health to be given to those who suffer from physical ailments. I think that we most certainly need to look at that.
Last week, during the jubilee recess, I visited the Glenbourne mental health unit at the Derriford hospital. I was told that it had seen a significant rise in the number of people with mental health issues, especially from the military, and I was told how important it was to ensure that something was done about it.
We must make sure that we adopt a proactive campaign so far as stress and mental illness are concerned, and that we give our support to those organisations that are in the business of delivering it, while also ensuring that we have trained GPs to look after people. The Jesuits have a saying, do they not—“Give me the child until the age of eight, and I will show you the man”. That was very much the issue that my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) raised in her contribution, for which I was grateful.
Let me finish on a small note. We need significantly more joined-up government between Departments. We should not be talking only about the Ministry of Defence, but about the Department of Health, the Ministry of Justice and the Department for Work and Pensions. If we can do that, we can make real progress.