The Housing Department has initiated consultations on the “feudal” rental system to make management fees transparent and forcing real estate managers to qualify as professionals for the first time.
The consultation will be based on secondary legislation that will be added to the Leasing Rights and Florida Reform Act in 2024, which standardizes five million leaseholders in England and Wales.
The department added that it is also committed to publishing a draft lease rights and common reform bill “later this year” that aims to “revitalize” the common business system and “will also include a series of other important reforms to the leasing business system.”
Housing and Planning Minister Matthew Pennycook said the life of leaseholders “is marked by intermittent, if not constant words, struggling in punitive and escalating ground rents; unreasonable permits and administration fees; unreasonable or unreasonable or extorted charges; and heavy conditions are rarely or without consultation.”
He added: “The government is committed to extending the feudal leasing system and we are undergoing wider reforms.”
The current consultation will be held for 12 weeks until September 26.
- Fee Transparency – An annual report that lists details of what the leaseholder wants to pay and provides additional key information for the coming year, including advanced notifications of major work in the program
- Reforming legal fees – Currently, landlords “often have an advantage” as many leases will allow them to recover their litigation costs during the leaseholder’s legal action, regardless of the outcome of the dispute
- Main Works – It will seek views on the mandatory use of reserves for new leases and existing leases
- Large Engineering Consulting – It will seek advice on the financial thresholds that landlords must consult the leaseholder and ensure clear project costs
- Fixed Service Fees – It will seek further protection regarding whether those who pay for fixed service fees should have, for example, give them the same rights to challenge the “reasonableness” of the service fees enjoyed by those who pay for variable service fees
- Management Agents – The department said there was an “overwhelming case” for these agents in England. It benefits all individual management agencies and management agencies must join a professional agency, must or must strive to achieve minimum qualifications in order to join the body.
“The current system is beneficial to landlords. Lease holders face complex and opaque systems when trying to raise concerns and have little real power to hold managers to come to accounts.
“Some agents have impunity laws without direct obligations. Leaseholders regularly report unacceptable behavior, ranging from aggressive behavior to total abuse.
“Any move to improve transparency in rebalancing will be welcomed by homeowners when solving problems and doing nothing.”
