Proposed measures to tackle the troubling issue of leaseholds are due to reach Parliament on Tuesday November 7.
Ellesmere Port and Neston MP Justin Madders (Lab) is to introduce a Leasehold Reform Bill to deal with concerns which have arisen in the constituency and elsewhere in the country.
These have seen large numbers of houses being sold leasehold, rather than freehold, with occupiers discovering they have been disadvantaged by the terms.
Mr Madders believes a straightforward, cost effective and fair system should be established for the owners of leasehold houses to purchase the freehold of their home.
The system would also apply to the owners of flats where a majority of leaseholders within a block wish to purchase the freehold.
The new system would be based on a simple calculation, with a cap on the total paid for a freehold and would replace the lengthy, complicated and expensive system of enfranchisement currently in operation.
Similar systems exist in Scotland, Northern Ireland and a number of other countries Mr Madders points out.
The new bill also seeks to establish a new compensation scheme for those who have been misled into leasehold agreements and to change the rules around the award of costs in property tribunal cases which the MP claims are ‘unfairly weighted in favour of the freeholder’.
Mr Madders’ Bill is to be introduced through the ‘Ten Minute Rule’ procedure which allows an MP to make their case for a new law. The process will start with a 10 minute speech by the MP in the House of Commons.
A Government consultation on tackling unfair practices in the leasehold market closed on September 19 and proposed a number of measures including banning the sale of leasehold houses in future and limiting the ground-rent levied on other leasehold properties.
While Mr Madders, who is also the deputy chairman of the All Party Parliamentary Group on leasehold reform, welcomes the Government’s proposals, he expresses concern they do nothing to deal with the issues being experienced by existing leaseholders.
He commented: “Abuses of the leasehold system have made huge profits for developers while causing misery to thousands of people.
“Many owners of leasehold houses were led to believe they were buying their dream home but instead they were providing a revenue stream for an offshore company operating from a tax haven.
“While I welcome the Government’s proposals they do nothing to address the injustice that current leaseholders face, many of whom feel trapped in properties with escalating ground rents because of the complexity and expense of the current system for purchasing freeholds.”
He continued: “The current system allows freeholders to delay and put off people who want to buy their freehold. The whole process is extremely costly, archaic and lacks transparency.
“Great expense is also incurred in just proceeding to a tribunal to purchase the freehold due to the practice of freeholders using surveyors and lawyers to argue for unrealistically high costs to purchase the freehold.
“The system I am proposing removes the opportunity for them to do that. By creating a simple formula set out in law to purchase a freehold there will be no need to resort to expensive and time consuming tribunals.
“There have been some examples of poor practices by both developers and solicitors and in those cases there needs to be some form of redress that does not rely upon the victims handing over thousands of pounds in legal fees.
“I hope that MPs from all parties will back these reforms which would make a huge difference to large numbers of their constituents.”
Ellesmere Port activist Katie Kendrick, who set up the National Leasehold Campaign in January this year to fight the injustices of the leasehold system, has posted: “Feeling very lucky to have such a supportive MP.”
