Announced quietly over the Easter break, on April’s Fool day to be exact, were Saijd Javid’s plans to crack down on leasehold abuse.
He intends to appoint a new regulator for managing agents, with powers to prosecute – putting them on notice that the current system of self-regulation has completely failed. Even though the details are still to be worked out, this will hopefully put an immediate stop to some of the most cavalier behaviour of some managing agents. The government statement calls for a professionalisation of the sector, with a nationally recognised qualification for both letting and managing agents.
A new code of practice will be drawn up, and there is a specific promise of a new system to help leaseholders challenge unfair service charges. A working group is to be set up to work out the details, with stakeholders across the leasehold and private rented sector.
There is a specific call for leaseholders to be able to appoint another managing agent if unhappy with their current one. This is a worthwhile aspiration, but potentially the most difficult reform to achieve because this right is currently baked into most leases as belonging to the freeholder. It’s a revealing detail and shows the government is still on a learning curve in terms of the current imbalance of power in leasehold law.
The legislation for managing agents also covers letting agents and will provide much needed protection for private tenants. But as LKP points out, the aim of reform should be to move leasehold closer to real ownership, i.e. Commonhold, rather than formalise it as a form of tenancy.