The first-tier tribunal should be granted jurisdiction to hear all leasehold disputes not resolved by a property ombudsman, a trade body has said, as momentum grows for leasehold legislation to be reformed.
With the number of leasehold transactions growing across the country, the Conveyancing Association says it wants to end what it believes to be significant delays and overcharging in the leasehold transaction process.
Leasehold law is one of the areas being considered as part of the Law Commission's work programme for 2017 to 2020.
The commission says it has heard of 'increasing dissatisfaction' with two areas of commercial leasehold law. It says criticisms have been made of part 2 of the Landlord and Tenant Act 1954, which provides security of tenure for business tenants.
It is also aware of criticisms of the regime governing agricultural tenancies under the Agricultural Holdings Act 1986.
The commission says it wants to hear about problems in any area of leasehold law. In particular: how common the problems are, the extent to which they have a significant practical and economic impact, and whether such impact has become more significant in recent years.
Problems highlighted by the association include identifying the lease administrator in the absence of registration or regulation requirements. Existing or incoming leaseholders do not have a redress system with effective consumer rights. There can also be significant delays in the provision of LPE1 information, such as ground rent, insurance and service charges.
Beth Rudolf, the association’s director of delivery, said purchasing a leasehold property can be fraught with delay and significant unexpected costs.
‘Given this, and the fact that the number of leasehold transactions continues to grow, the association believes now is the time for action to take place in order to develop a much fairer system, with transparent and reasonable costs, as well as an obligation to provide the data required within a 20-day timescale,’ she added.
The association recommends that the Commonhold and Leasehold Reform Act 2002 be updated to include an obligation to provide data within 20 days of the fee charged by the lease administrator being paid.
Lease administrators should be a member of one of the three existing property ombudsmen schemes. The first-tier tribunal should be granted jurisdiction to hear all cases not resolved by the ombudsmen.
A lease administrator’s register should be created, it said.
Rudolf said there were some ‘great’ lease administrators whose trade associations want to see all administrators under the jurisdiction of the ombudsmen to ensure a level playing field, and to give guidance as to what reasonable fees and timescales should be.
‘By changing the act and collating a register of all lease administrators, we will go a long way towards developing a process which is far fairer and more fit for purpose for what looks likely to be a growing number of transactions within the purchase market,’ she added.