Key Facts

• The Competition and Markets Authority (CMA) conducted a two-year investigation into leasehold mis-selling.
• The Bill proposes a duration threshold for leases, raising the threshold for rent in certain areas, and removing provisions from the Housing Act to address assured tenancy traps.
• The CMA secured direct outcomes for 20,000 householders by taking cases to court to remove unfair doubling terms and provide financial support.
• The Competition and Markets Authority (CMA) is conducting a market study looking at the house building sector, including issues related to estate charges.
• A working paper on these issues was published in November.
• The final report from the CMA will be issued in February.
• The Leasehold Reform, Housing and Urban Development Act 1993 has provisions concerning structural dependency rules that may disqualify some leaseholders from enfranchisement.
• James Vitali argues for removing the provision in the 1993 Act to enable more leaseholders to benefit from the Bill's intent.
• The Bill aims to increase the threshold for enfranchisement to 50%.
• The discussion centres on the concept of marriage value in leasehold properties.
• James Vitali mentions a transfer of £1.9 billion from freeholders to leaseholders.
• There is debate about mitigating losses for those who lose out due to changes in property rights.
• James Vitali is concerned about creating a two-tier housing system with secure property rights in rural areas and less stable tenure types in urban areas.
• Commonhold incentives may need to be included in the Bill to encourage its take-up.
• The threshold for conversion from leasehold to commonhold could potentially increase to 50% or even 75%, though this is not a firm proposal.
• The Law Society recommends upgrading freehold law to match leasehold law regarding positive obligations.
• Clause 12 deals with valuation and non-litigation costs for leaseholders in enfranchisement claims.
• Section 121 of the Law of Property Act 1925 provides excessive remedies for landlords on rentcharge arrears.
• The Bill interferes with property rights in significant ways.
• Pension funds and other organisations may be deprived of reliable rental income due to changes like capping ground rents.
• Some provisions allow tenants to enfranchise without buying commercial parts of the building, leading to value retention for landlords.
• There are ongoing legal cases determining whether a court-appointed manager can be an accountable person.
• Section 72 of the Building Safety Act 2022 could potentially be amended through secondary legislation by the Secretary of State, though Barry Gardiner prefers changes to be made directly in the Bill.
• The just and convenient test is an equitable principle allowing for flexible decision-making based on practical considerations.
• Caroline Dinenage chairs the session until 3:30 pm.
• Jack Spearman represents the Residential Freehold Association, which manages about 1 million leasehold properties in England and Wales.
• The session is part of the examination of witnesses for the Leasehold and Freehold Reform Bill.
• The Government's programme has failed to recognise the impact on organisations.
• Compensation may be required under European convention on human rights, paid either by taxpayers or leaseholders.
• £29 billion of investment from pension funds into UK plc was announced in the same week as a consultation could see a value transfer away from UK pension funds through ground rent changes.
• The Pensions and Lifetime Savings Association stated that none of their members have expressed concerns about proposed changes to rules affecting leasehold and ground rents.
• The total transfer of value could be £1.9 billion plus an additional £28 billion according to Jack Spearman's calculations.
• Previous witnesses and various types of evidence acknowledge that it is a political decision to redistribute value between groups A and B.
• The Secretary of State has stated he wants a peppercorn ground rent, impacting the assessment by £27.7 billion.
• The session runs until 3:50 pm.
• Giles Grover represents leaseholders in close to around 2,000 unsafe buildings.
• There are ongoing discussions about the need for amendments to ensure the Building Safety Act operates as intended.
• The Government has promised protections but implementation is slow.
• Non-qualifying leaseholders face ongoing burdens despite remediation efforts.
• Proposed amendments aim to include first three properties of all leaseholders.
• Building safety managers face significant costs of compliance.
• Estimated cost of £500 per year extra per leaseholder for building safety compliance.
• The residents of a building in Greater Manchester were forced to pay for interim measures until the council took over.
• Non-qualifying leaseholders may still be required to pay legal fees.
• Section 24 of the Landlord and Tenant Act 1987 allows for court-appointed officers, but managers appointed by the court cannot be accountable persons.
• A freeholder in a building was given £20 million despite being found guilty of taking £1.6 million in insurance commissions unreasonably.
• Developers are using company law to avoid obligations under the Act and relocating to jurisdictions outwith the UK.
• The session ends at 15:10 on an unspecified date.
• Further consideration will be adjourned until Tuesday 23 January at 9:25.
• Named organisations and individuals mentioned include Jones Lang LaSalle (JLL), Darren Pither, WIQ Residents Association, Residential Freehold Authority (RFA), Professor Christopher Hodges, Free Leaseholders, Business LDN, Grosvenor Property UK, Cadogan, Church Commissioners for England, Related Argent, Calthorpe Estate, John Lyon’s Charity, PCRA (Park Central Residents Association), and Law Society.