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Conveyancers reignite push for leasehold reform

Housing minister invited to discuss proposals for a 21st century leasehold process

21 June 2017

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A group of conveyancers have jointly published wide-ranging proposals on leasehold reform that would give consumers greater certainty and protection if implemented.

The Legal Sector Group (LSG) – comprised of the Conveyancing Association (CA), the Chartered Institute of Legal Executives (CILEx), Bold Legal Group (BLG), and the Society of Licensed Conveyancers (SLC) – hopes its proposals will reduce the potential for abuse of leaseholds, speed up the leasehold conveyancing process, and remove some of the unreasonable costs that come with it.

The group has written to the new housing minister, Alok Sharma MP, to outline the proposals and requested a meeting to discuss them further. The group will also be presenting the proposals to the Law Commission.

Beth Rudolf, director of delivery at the CA, which has long-campaigned for leasehold reform, said: ‘These proposals point the way ahead for a 21st century leasehold process. We are now urging the powers that be to put in place a programme of change to provide both sellers and buyers of leasehold property with certainty, peace of mind, reasonable costs, and a much greater degree of clarity in terms of what they are signing up to, and the responsibilities that are shared amongst those involved in their leasehold property.’

The LSG consulted widely on the new proposals, including with the Law Society of England and Wales, with a view to making wholesale changes to the leasehold process.

To guarantee reasonable fees are paid for administrative activities, the group has proposed a tariff of fees for quantifiable activities and the provision of standardised documents. The lease administrator would also be obliged to meet reasonable time scales in terms of registration and their provision of information.

The LSG has called for a mandatory requirement for all freehold management or leasehold administrators to be part of a redress scheme and has also sought to tackle unfair lease terms by tackling ‘exit’ or ‘event’ fees and escalating ground rents.

Another proposal suggested improving requirements on the marketing of leasehold properties that would include information about ground rents, annual service charges, and rent review clauses. The group also wants obligations and requirements on landlords and requirements for lease administrators to ‘shop around’ for the best deal.

An overhaul of tenure was proposed which would see a review of commonhold regulations and a simplification of the process to extend leases and convert them to freehold. Meanwhile regulations should be created for the protection, investment, management, and calculation of the reserve fund on every leasehold or freehold management block.

Commenting on the proposals, Rob Hailstone, CEO and founder of BLG, said: ‘These proposals are much needed and if introduced will help the home buying and selling public and conveyancers in a number of ways. It is encouraging to see the CA, CILEx, BLG, and the SLC working together with a common aim.’

SLC chairman, Simon Law, added: ‘There is no individual or party better placed than those legal professionals who serve their clients day in and day out in buying and selling leasehold properties to architect the much needed reforms set out in these proposals.’

The president of CILEx, Martin Callan, , said: ‘CILEx hopes that the proposals will ensure fairness to consumers, speed up the sale and purchase of residential leasehold properties, and lead to less abortive transactions and loss of fees. We, and the group, have been working towards this for some time and it is encouraging that lawyers are presenting proposals to the Law Commission that if implemented will have a major benefit for all.’

Matthew Rogers is a legal reporter at Solicitors Journal

matthew.rogers@solicitorsjournal.co.uk | @lex_progress

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Conveyancing

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leasehold