The government has ruled out forcing landlords of leasehold properties to belong to a redress scheme, dealing a blow to conveyancers seeking urgent reform of leasehold legislation.
The Conveyancing Association has stressed that existing and incoming leaseholders do not have a redress system with effective consumer rights. It recommends that lease administrators be required to become a member of one of the three existing property ombudsman schemes.
However, Department for Communities and Local Government minister Lord Bourne said the government ‘is not persuaded that more burdensome approaches to regulate landlords would be effective’.
Bourne was responding to a question from Labour peer Baroness Hayter, former chair of the Legal Services Consumer Panel, on whether the government planned to extend the requirements of the Consumers, Estate Agents and Redress Act 2007 and the Enterprise and Regulatory Reform Act 2013 to require landlords of leasehold properties to belong to a redress scheme.
Bourne said leaseholders in dispute with a landlord can apply to the first-tier tribunal (property chamber) in England and the Leasehold Valuation Tribunal in Wales to seek redress.
The government will also extend leaseholders’ access to redress by including provisions in the Housing and Planning Act 2016 to address an ‘irregularity’ concerning the inability of court and tribunals to restrict the recovery of a landlord’s legal costs from leaseholders as administrative charges.
Secondary legislation is expected to be introduced by summer next year.
The association told the Gazette the department was under the ‘misapprehension’ that all issues can be taken to the tribunal.
Beth Rudolf, director of delivery, said the tribunal’s jurisdiction did not cover items such as the ‘deed of covenant’, for which the landlord can charge as much as they wish.
A spokesperson for the Law Society said leaseholders should have the ability to assert their legal rights and seek redress in a timely and cost-effective forum.
‘Although those who have bought, or are buying, flats have protection under the Landlord and Tenant Act 1987, sometimes enforcement would benefit from some “fast-tracking”, particularly if issues arise during the conveyancing process,’ the spokesperson added.