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Leasehold

Ministry of Housing, Communities and Local Government written question – answered on 12th February 2020.

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Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

To ask the Secretary of State for Housing, Communities and Local Government, with reference to the report entitled Tackling unfair practices in the leasehold market: Summary of consultation responses and Government response, published in December 2017, what plans he has has to bring forward legislative proposals to amend section 121 of the Law of Property Act 1925.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

To ask the Secretary of State for Housing, Communities and Local Government, with reference to the report entitled Tackling unfair practices in the leasehold market: Summary of consultation responses and Government response, published in December 2017, what plans he has has to bring forward legislative proposals to regulate rent charges paid by freeholders.

Photo of Esther McVey Esther McVey Minister of State (Housing, Communities and Local Government)

Holding answer received on 10 February 2020

The Government is committed to promoting fairness and transparency for homeowners and ensuring that consumers are protected from abuse and poor service. The Government is aware that homeowners could be subject to a possession order or the granting of a lease of their home by the rentcharge owner over rentcharge arrears. As part of our leasehold reform work we have committed to repeal Section 121 of the Law of Property Act 1925 to ensure homeowners are not subjected to unfair possession orders.

Furthermore, where people pay estate rentcharges, it is not right that these homeowners have limited rights to challenge these costs. That is why the Government intends to legislate to give freeholders on private and mixed tenure estates equivalent rights to leaseholders to challenge the reasonableness of estate rentcharges as well as a right to apply to the First-tier Tribunal to appoint a new manager to manage the provision of services covered by estate rentcharges.

We are moving forward with legislation with these measures.

Furthermore, the Government asked the Regulation of Property Agents working group, chaired by Lord Best, to look at how service charges for leaseholders - and estate rentcharges for resident freehold homeowners - could be made more transparent. The group also considered in what circumstances other fees and charges, such as administration charges or permission fees which affect both leaseholders and freeholders, are justified or whether they should be capped or banned. The working group published its final report to Government (see: https://www.gov.uk/government/publications/regulation-of-property-agents-working-group-report). We are considering the report’s recommendations and will announce next steps in due course.

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