Leasehold Reform Initiative

Transcription

1 Leasehold Reform Initiative

2 Beth Rudolf Director of Delivery Conveyancing Association

3 Leasehold setting the scene Transaction times Leasehold Houses Escalating Ground Rents Unreasonable Fees The Freehold Asset Class

4 Leasehold setting the scene Transaction times 20 days longer than Freehold Leasehold Houses Escalating Ground Rents Unreasonable Fees The Freehold Asset Class

5 Leasehold setting the scene Transaction times 20 days longer than Freehold Leasehold Houses 2,000 Redrow Homes - Ledsham Escalating Ground Rents Unreasonable Fees The Freehold Asset Class

6 Leasehold setting the scene Transaction times 20 days longer than Freehold Leasehold Houses 2,000 Redrow Homes - Ledsham Escalating Ground Rents Doubling and compounding RPI Unreasonable Fees The Freehold Asset Class

7 Leasehold setting the scene Transaction times 20 days longer than Freehold Leasehold Houses 2,000 Redrow Homes - Ledsham Escalating Ground Rents Doubling and compounding RPI Unreasonable Fees On purchase, during ownership and sale The Freehold Asset Class

8 Leasehold setting the scene Transaction times 20 days longer than Freehold Leasehold Houses 2,000 Redrow Homes - Ledsham Escalating Ground Rents Doubling and compounding RPI Unreasonable Fees On purchase, during ownership and sale The Freehold Asset Class

9 Leasehold - the Facts Approximately 4 million Leasehold Titles 2.8 million flats 1.2 million houses 167,000 detached houses 22% (2011) to 26% (2016)

10 Leasehold - the Facts Approximately 4 million Leasehold Titles 2.8 million flats 1.2 million houses 167,000 detached houses 22% (2011) to 26% (2016) 960,000

11 Leasehold Reform Leasehold Conveyancing Transactions Delay Cost Land Registry Restrictions Leasehold Ownership Consent Extension Enfranchisement Exit fees

12 Leasehold Conveyancing - What do you think? Unreasonable fees Vote: what would be a reasonable hourly rate for lease administrators? 50 per hour 100 per hour 200 per hour 600 per hour Unreasonable Delay Vote: what would be a reasonable timescale for the provision of information? 5 days 10 days 20 days Lack of Redress Vote: should there be redress available for all lease administration activities? Yes No

13 Leasehold Conveyancing the Issue Unreasonable fees 52% of fees for a Deed of Covenant 88% of Notice of Assignment 90% for Certificate of Compliance Unreasonable Delay 37% of Leasehold Property Enquiries take over 30 days to arrive Lack of Redress RICS Service Code/ARMA Q Ombudsmen Tribunal

14 Leasehold Reform - Conveyancing All administration fees to be reasonable A tariff of fees set by the secretary of state Reasonable timescales for administrative services 10 days Standard document eg Deed of Covenant HMLR to accept conveyancer s evidence of compliance to disapply a restriction A fast track redress scheme

15 Leasehold Reform Unfair Lease Terms Newbuild shared amenity property should be Commonhold If there is no shared amenity then Freehold No new leases should have a term less than 250 years Escalating Ground Rent Exit Fees only enforceable if they paid into a reserve fund for the maintenance of the block Disapply the Housing Act Schedule 2 Ground 8 for long leases Automatic extension of long leases Protections for flats to be extended to houses

16 Leasehold Reform Unfair Lease Terms Cont d Simplify the calculation of lease extension/enfranchisement premiums Costs in lease extension/enfranchisement Amend Right to Manage Creation of Right to Manage Co when a management company fails Review of s.20 notice amounts Bring public sector landlords in line with private sector protections

17 Leasehold Reform Building Insurance Improve Lease administrator obligation for insurance Oblige the Lease Administrator to shop around for insurance quotes

18 Leasehold Reform Management Regulations Protection of reserve funds The accumulation of a reserve fund on all shared amenity properties Capped management charges for routine works and proportionate charges for major works

19 Leasehold Reform All suggestions should apply as appropriate to:- - Leasehold Flats/Maisonettes - Leasehold Houses - Freehold Management Schemes - Commonhold

20 Commonhold the facts Commonhold Community Statement (CSS) = Lease Commonhold Association = Management Company Commonhold Assessment = Service Charge Budget Unit holder = Leaseholder Common parts = structure and communal areas Can only be created out of a Freehold Can be mixed use Only one CSS for the whole development

21 Next Steps Finalise Proposals Lobby for inclusion in the manifestos Present to the Law Commission Share with the Leasehold Sector and Consumer Groups