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Legal Sector Group complete proposals for Leasehold reform

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) – have today (20th June 2017) published its complete proposals on Leasehold reform.

The LSG has consulted widely on the new proposals, including with The Law Society, and has drafted a wide-ranging policy document designed to reduce the potential for abuse of leasehold, speed up the leasehold conveyancing process, increase certainty for consumers and remove some of the unreasonable costs that can come with it.

The Leasehold reform proposals have been split into eight key areas with specific policy initiatives for each. Those key areas are:

  • Reasonable fees for administrative activities – covering a tariff of fees for quantifiable activities and the provision of standardised documents.
  • Reasonable timescales for administrative activities – creating obligations for the Lease Administrator in terms registration and their provision of information within a certain timescale.
  • Enforcement – with a mandatory requirement for all Freehold Management or Leasehold Administrators to be part of a redress scheme.
  • Unfair lease terms – covering initial lease terms, rent review clause, escalating ground rents, and exit/event or transfer fees.
  • Overhaul of tenure – covering a review of Commonhold regulations and a simplification of the process to extend leases and convert to freehold.
  • Building insurance – obligations for landlords and requirements for Lease Administrators to ‘shop around’.
  • Management regulation – covering reserve funds on leasehold/freehold management block and costs of management charges.
  • Marketing of leasehold properties – covering the provision of upfront information on remaining term of the lease, ground rent, annual service charge, rent review clauses, lease clauses, etc.

Following the conclusion of the General Election, the LSG has now written to the new Housing Minister, Alok Sharma MP, outlining the proposals and requesting a meeting to discuss them further. The Group will also be presenting the proposals to the Law Commission and is looking to work with all stakeholders in order to bring in these much-needed proposals.

Beth Rudolf, Director of Delivery at the Conveyancing Association, said:

“The LSG, along with a number of notable stakeholders and contributors, have now been able to publish these Leasehold reform proposals, which we believe point the way ahead for a 21st Century leasehold process. The CA has long-campaigned for leasehold reform – it is a key work stream within our Strategic Plan – and we are now urging the powers that be to put in place a programme of change in order 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. We are looking forward to working with the Law Commission and the new Government in order to make these proposals a reality.”

Rob Hailstone, CEO and founder of the 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.”

Simon Law, Chairman of the Society of Licensed Conveyancers (SLC), commented:

“The SLC has been advocating for many years that the serious shortcomings associated with leasehold title, and the process for buying and selling leasehold properties, are addressed for the benefit of homeowners. It is gratifying that the legal profession including solicitors, licensed conveyancers and Chartered Legal Executives have come together to arrive at a common set of proposals for both the Law Commission and the Government to consider. 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.”

Martin Callan, President of CILEx, 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.”

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