Tuesday 22nd January 2019

(5 years, 2 months ago)

Westminster Hall
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Preet Kaur Gill Portrait Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
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It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Bishop Auckland (Helen Goodman) for securing this debate and for the work she is doing with her Bill to regulate freeholders and to ensure that freeholders have sufficient rights.

Under section 19 of the Leasehold Reform Act 1967, the creation of schemes of management allows landlords or scheme managers to receive and require fees from management charges. I welcome the work to support new builds, but the Government should go further than that—I wonder whether my hon. Friend agrees—and strengthen the legal position of all freeholders so that they have access to information about where the money they are being forced to pay is going and what it is being spent on.

As it stands, the balance of power is not appropriate or fair. Freeholders are not able to ask for details of where the money they are charged as part of estate management schemes goes. However, management companies are able, by law, to use enforcement agents to collect the money. Does that seem like a reciprocal relationship?

I have residents in my constituency who are freeholders but who are still obligated to pay management fees, separate and additional to service charges. Residents are concerned about the lack of transparency, and they have a feeling of helplessness when trying to find out where the money is being spent, or how much money is left in the pot. Despite paying into this opaque fund, the freehold residents are entirely powerless to compel enforcement of the management scheme.

Freehold residents are unable to ensure enforcement of the scheme that they pay into and cannot hold anyone to account over expenditure. We need transparency, for them to be able to hold it to account. I understand that the Government are legislating to give freeholders the equivalent rights to leaseholders when it comes to challenging service charges. Will the Minister extend that to management charges as well? If not, will he explain what the difference is?