David Lepper

Labour Party | Brighton Pavilion

Rights for Council Leaseholders

Speech to Brighton and Hove Council Leaseholders Independent Forum

Brighthelm Church and Community Centre

Wednesday 5th October 2005-10-05

It was over 12 years ago that , as a local councillor that, already involved in campaigning on behalf of private sector leaseholders, I became aware of the needs of council leaseholders as well – those people living in flats which had been bought under the Right to Buy scheme who often felt they needed more information – especially about service and administration charges.

And especially where those people, badly advised perhaps in the first instance about the advantages of buying, were now finding themselves, growing older with bills they found it hard to pay.
 
I welcome the fact that back in 1993 the Labour administration of the former Brighton Borough Council published a council leaseholder’s charter which included at least an acknowledgement of a dispute procedure for leaseholders.

And it was because of the existence of that charter and the widening of the scope of the Leasehold Valuation Tribunals following pressure from myself and some other MPs in the early months of the first Labour government in 1997 that I was a little sceptical when it was first suggested to me by some council leaseholders representatives that all was not well for leaseholders.

If there were problems, I hoped that they would be dealt with by the government’s Commonhold and Leasehold Reform Act of 2002.

I was quite heavily involved in the passage of that legislation through Parliament.

The Act didn’t include two measures which I had called for in Parliament:

• a “sunset” clause for new leasehold properties – a date after which all new block of flats must be commonhold rather  than leasehold, and

• an end to forfeiture instead of just the new regulations making it a little more difficult for the freeholder to use it as a threat when there is a dispute over charges.

However, I still believe that the Act was a major advance for private sector leaseholders dealing as it did with the two most worrying issues which constituents had brought to my surgeries – the right to manage their properties and – to a lesser extent – the right to enfranchise – to buy the freehold.

I know of many leaseholders who have exercised the right to manage now and some who have enfranchised.

But throughout the passage of the Act a few of us had also raised with the then minister, Nick Raynsford, the question of equal treatment for council leaseholders.

And it was good, therefore,  that the Act said that information available to both private and public sector leaseholders so far as administration and service charges are concerned should be the same under Sections 152 and 154 of the Act. Like many other parts of the Act – and like most legislation- there was to be further consultation on the detail before it came into force.

The hope was that these sections of the Act would put right an anomaly in the Landlord and Tenant Act 1985 with regard to providing information about costs of works to their blocks.

The law seems to say that all leaseholders – private and public sector - have a right to see the accounts , receipts, invoices and other supporting documents so that they can decide if the charges are reasonable.

Of course access to that information it is reasonable to assume is vital to deciding whether or not a leaseholders has any grounds for taking forward a dispute – especially to the LVT.

It was difficulty of obtaining that information which led to the Essex Place dispute and the Scrutiny Panel set up by the Council to look into it which made recommendations for changes. Whether those recommendations have been implemented - - or when they will be – is hard to tell.

Anyway – while the law seems to say that council leaseholders should have the right to that information -  as housing minister Yvette Cooper told me in a letter on 6th June “Section 25 of the Landlord and Tenant Act 1985 (failure to comply)…. Does not apply to local authorities.”

She continued “despite this we would expect a local authority, as a landlord, to comply with the legislation where a long leaseholder exercises their rights.”

In other words – if a council doesn’t provide the information about costs etc to which its leaseholders have a right, there’s nothing in law they can do about it.

So the right is there – but there appears to be no sanction on the council to comply with it.

The hope was that the new Act would change that. Especially when the government set up a public sector leaseholders working party to look at issues relating to council leaseholders.

However, meetings of that working party became infrequent and I raised a number of issues about accountability in note- and minute-taking of those meetings. Then the meetings ceased. Towards the end of last year an assurance was given that the Working Party would resume in the first quarter of this year. When by June that hadn’t happened, I asked the Minister why not and in that same letter of 6th June was told that in a new form it would start up again soon. We are still waiting.

The to add to the concerns – on 29th July the ODPM announced in a press  release that despite all the consultation that had gone on Section 152 of the Commonhold and Leasehold Reform Act would not be implemented.

“Why not?” I asked.

Because, Local Government Minster Phil Woolas told me in a letter of 6th September, consultation had shown that “it is not possible to introduce without imposing considerable extra costs on social landlords and their leaseholders.”

Well that might be so, but so far I’ve not seen the evidence and it is that which I want to take up with the ministers.

We now know that nothing will happen on this matter of giving Council leaseholders the same rights in law to enforce their rights to information without new legalisation in Parliament – when, who knows and even then there is no guarantee that it will give those rights.

And so the situation remains an unsatisfactory one.

Especially locally now that the Audit Commission’s Housing Inspector, despite early assurance that she would consider a detailed submission on behalf of the Forum as part of her inspection, later claimed that was all a misunderstanding. Her inspection wasn’t covering leasehold after all.

What all of this leads me to believe is that while it seems you have a contract with your freeholder, in law you do not have the same rights a private sector leaseholder to enforce it.

What would help you in this situation ?

Well, private leaseholders have the protection of the Royal Institute of Chartered Surveyor’s Code – the RICS Code. It’s being revised, but it’s there, however, it doesn’t apply to council leaseholders.

It was the possibilities of such a code for council leaseholders which the ODPM working party which I have mentioned was considering – among other issues.

A Code to protect leaseholder’s rights in the same way the RICS Code helps to protect those of other leaseholders.

It could help to ensure there is a process of mediation of the kind which Tony Essian of LEASE – the leaseholders advisory service – said would often make it possible to come to mutually acceptable result in a dispute and therefore save both landlord and leaseholder the costs of going to law.

And for the Council, it would set out clear standards of record keeping and accounting – in a word, greater transparency.

So I welcome the campaigning work which the Forum has done on this issue.

I will continue to take up your concerns with ministers and do what I can to help you in working towards the setting up and implementing of that Code of Practice which can only improve your rights.