Key Facts

• New Clause 7 would require notice of future service charge demands under section 20B of the Landlord and Tenant Act 1985.
• New Clause 8 would enable a tribunal to vary or discharge an order to appoint a manager without an application.
• New Clause 9 addresses breach of redress scheme requirements in relation to the appointment of a manager.
• The new clause allows owners of managed dwellings to give their estate manager a notice of complaint.
• The notice sets out complaints regarding breaches, inefficient charges, or unreasonable costs.
• If unresolved within six months, the owner may apply for appointment of a substitute manager.
• Homeowners must issue a notice of complaint to their estate management company.
• The estate management company has six months to remedy the complaint before further action can be taken.
• New clause 10 requires homeowners to provide specific information in their complaints and outlines grounds for issuing them.
• New clause 11 allows owners to apply to a tribunal for appointment of a substitute manager who will carry out functions instead of the estate manager.
• New Clause 12 sets conditions for applying for an appointment order.
• New Clause 13 outlines criteria for determining whether to make an appointment order.
• New Clause 14 provides further provisions related to appointment orders.
• The new clauses aim to establish further provision about orders to appoint substitute estate managers under NC11.
• Regulations will require persons carrying out estate management in a relevant capacity to be members of redress schemes.
• Redress schemes must provide independent investigation and determination of complaints against members made by current or former owners.
• New Clause 17 would allow the Secretary of State to give financial assistance for redress schemes.
• Financial assistance can be provided by way of grant, loan, guarantee, or other forms.
• The new clause would apply where the Secretary of State makes regulations under section.
• It includes conditions requiring schemes to appoint individuals responsible for overseeing complaints investigations, allowing complaints about non-compliance with codes of practice issued by the Secretary of State, and setting fees at levels sufficient to meet administrative costs.
• Regulations can set out further provisions on approval or designation numbers, application making periods, validity terms, withdrawal rules, and discretionary conferrals.
• The enforcement authority may impose a financial penalty if satisfied beyond reasonable doubt of breach.
• Maximum financial penalties range from £5,000 to £30,000 based on specific cases outlined in the bill.
• The Secretary of State can make regulations enabling decisions under redress schemes to be enforceable as court orders.
• New Clause 23 would enable the Secretary of State to issue guidance for enforcement authorities and scheme administrators.
• New Clause 24 provides interpretation provisions for Part 4A, defining terms such as 'dwelling', 'estate management', and 'relevant landlord'.
• New Clause 42 introduces leasehold sales information requests in the LTA 1985.
• Landlords must provide requested information if it is within their possession.
• Information can be requested from another person if the landlord believes they possess it.
• Negative response confirmation documents are required if information cannot be provided.
• Charges for providing or obtaining information are subject to regulations.
• New clause 42 introduces requirements for landlords to provide sales information requested by leaseholders.
• New clause 43 requires estate managers to respond to sales information requests within a timeframe set out in regulations.
• New clause 44 sets limits on fees for providing sales information and ensures timely responses.
• New clause 46 allows tribunals to award damages of up to £5,000 for non-compliance or overcharging.
• New Clause 42 was read a second time and added to the Bill.
• New Clause 43 would allow managed dwelling owners to give sales information requests to estate managers under specified conditions.
• New Clause 44 requires estate managers to provide requested information or seek it from other parties if not in possession.
• Forfeiture allows landlords to terminate leases for unpaid debts starting at £350.
• New clause 1 would abolish the right of forfeiture in relation to residential long leases.
• The current law permits forfeiture even for small debts such as £15 if unpaid for more than three years.
• The current law of forfeiture remains manifestly unjust despite attempts at reform since 1925.
• The Law Commission proposed abolishing the current law of forfeiture in 2006 but no action has been taken yet.
• There is a need to balance the rights and responsibilities of landlords and leaseholders while ensuring appropriate means for compliance with lease agreements.
• Forfeiture is an extreme measure with around 80 to 90 cases annually.
• The principle of forfeiture is disproportionate and unreasonable.
• Threats are often defused if mortgage companies intervene.
• New clause 2 requires new leases on flats to include a residents' management company (RMC).
• Each leaseholder is given a share of the RMC at no additional cost.
• The clause aims to give leaseholders full control over service charges, repairs, maintenance, and insurance costs.
• It would help prepare for future commonhold reforms by creating experience in managing buildings under such arrangements.
• Lee Rowley supports the intention of the new clause.
• The Bill aims to give leaseholders control over building management without compulsion.
• Compulsory establishment of management companies is seen as inappropriate in certain cases.
• The proposed new clause aims to implement recommendations from the Regulation of Property Agents Working Group's final report of July 2019.
• Regulations must be laid within 24 months of Royal Assent, with a progress report required after 12 months if implementation has not been initiated.
• The Minister suggests that any changes should be made through primary legislation rather than under Henry VIII powers.
• The Government committed in April 2018 to regulate managing agents.
• Lord Best chaired a working group on property agent regulation which issued its final report in July 2019.
• New clause 25 would give the Government two years to implement the working group’s proposals.
• The statement discusses Acts including the Leasehold Reform Act 1967, Rentcharges Act 1977, Landlord and Tenant Act 1985, Leasehold Reform Housing and Urban Development Act 1993, Commonhold and Leasehold Reform Act 2002, Building Safety Act 2022, and the Leasehold Reform (Ground Rent) Act 2022.
• The minister opposes new clause 26 as it provides broad powers for the Secretary of State to amend legislation related to leasehold and freehold management.
• The government believes such broad powers should be used only when absolutely necessary.
• The Building Safety Act 2022 is amended by proposed regulations to include additional types of leases and buildings within its protections.
• There are still many thousands of unsafe buildings across the country requiring remediation seven years after the Grenfell Tower fire.
• In Barry Gardiner's constituency, a building with similar cladding to that at Grenfell required 125 firefighters and 25 fire engines for a recent incident.
• The pace of remediation is too slow, posing risks to residents' health and safety.
• Labour party seeks to protect all blameless leaseholders from costs related to fixing historic cladding and non-cladding defects.
• New clauses 27 and 28 aim to extend protections under the Building Safety Act to non-qualifying leases and buildings.
• The Building Safety Act 2022 has made significant strides in building remediation.
• There are specific issues with buildings under 11 metres, which the minister commits to examining each case individually.
• Under-11 metre buildings generally do not require works according to PAS 9980 assessment.
• New Clause 29 seeks to mandate that leaseholders in newly-constructed residential properties containing two or more flats have a proportionate share of the freehold.
• The Secretary of State must publish a report outlining legislative options within three months of the Act's commencement.
• Lee Rowley acknowledges the benefits but opposes adding this clause due to the Bill's size and complexity.
• New Clause 30 requires a review and reporting on leaseholders' enfranchisement rights within two years.
• New Clause 31 proposes lowering the participation limit for Right to Manage claims.
• New Clause 33 aims to reduce the proportion of qualifying tenants required for RTM claims from one-half to one-third.
• The current 50% participation threshold is required under section 13 of the 1993 Act for initiating a collective enfranchisement claim.
• Some large buildings find it difficult to secure the minimum number of participating tenants due to high levels of private renting and overseas ownership.
• New clauses propose that the Secretary of State should consider lowering the threshold within two years of the Act's implementation.
• The new clause amends Section 72 of the CLRA 2002.
• It allows leaseholders in mixed-use buildings with shared services or underground car parks to exercise their right to manage as per Law Commission recommendation 5.
• Developers have used the Act to exclude leaseholders based on shared services.
• The Government supports improving leaseholders' rights but needs further work before implementing wider recommendations.
• Landlords and managing agents must hold service charge moneys in trust at regulated financial institutions.
• The Government is not convinced that primary legislation is necessary for commencing section 156 of the CLRA 2002.
• Guidance from the national trading standards estate and letting agency team includes material information on estate management charges.
• The Bill aims to provide freehold estate management information to potential sellers.
• New Clause 36 would require landlords to conduct asbestos surveys before collective enfranchisement.
• The Control of Asbestos Regulations 2012 already mandates surveys in common areas where landlords are responsible for maintenance.
• The Health and Safety Executive is researching changes to the accreditation of surveyors.
• New clause 38 aims to give tribunals discretion to waive procedural requirements in RTM applications.
• Mark Loveday, a barrister and editor of "Service Charges and Management," proposed the ideas behind this new clause.
• The proposal addresses cases where landlords use technicalities to thwart legitimate leaseholder claims.
• The new clause seeks to reduce landlords' ability to frustrate right to manage claims.
• Standard procedural requirements are in place to ensure legal certainty for both parties.
• Leaseholders are entitled to become members of the right to manage company and receive information about the claim.
• The clause seeks to amend the Landlord and Tenant Act 1985.
• If a landlord fails to consult on major works and fails in any application for dispensation, costs passed to tenants are limited to £250 threshold.
• Clause 40 proposes amending Section 72 of the Building Safety Act 2022.
• The Building Safety Act 2022 has undermined the court-appointed manager scheme under the Landlord and Tenant Act 1987.
• A tribunal decision on December 22, 2023, at Canary Riverside estate effectively allows freeholders to regain control of leaseholders' homes and funds despite previous judicial restrictions.
• The case involves potential loss of public money up to £20 million from the building safety fund for cladding removal works.
• Over 11,000 higher-risk buildings are affected by this policy change.
• The Law Commission recommends abolishing the prohibition on leaseholders with three or more flats from qualifying as tenants in collective enfranchisement claims.
• Removing the restriction may enable sophisticated investors to take control of buildings, which could be detrimental to remaining leaseholders and remove properties from the market for owner-occupiers.
• The current exclusion limits circumstances where one leasehold owner can monopolise the freehold after acquisition.
• Leaseholders who did not participate in a previous collective acquisition claim have no statutory means to join later.
• The Law Commission has considered the issues extensively but requires detailed work to resolve them due to their complexity.
• Complex questions need resolution, such as when and to whom the right should apply, terms of participation, premiums payable, cost of claims, and remedies for damages.
• New clause 51 seeks a report within three months of the passing of the Act.
• The report must include proposals for legislative change to enable homeowners to change their estate management company if named on TP1 form.
• The Competition and Markets Authority (CMA) study will report by 27 February.
• Amendment 28 is proposed to remove 'charges and costs payable by residential' from the title.
• The amendment inserts 'the relationship between residential landlords and'.
• This amendment ensures the Bill's long title accurately reflects its contents.
• Lee Rowley thanked all those involved in progressing the Leasehold and Freehold Reform Bill.
• The Bill has now been reported after amendments were made.