Leasehold success shows the way ahead
Our industry often receives a lot of criticism – some of it justified, a lot of it not – so when it comes to some genuinely positive news that will benefit many firms and many customers, then I think it’s only right that we shout it from the rooftops and give ourselves a well-deserved pat on the back.
To say we have been focused on the leasehold ‘problem’ for a number of years would be something of an understatement. The media furore that kicked off in 2017 was no ‘overnight story’ – indeed we had been highlighting the clear problems with many Lease Administrators’ fee-charging structures and their less-than-sparkling delivery of information to clients for any number of years.
Let’s be honest, this was in no way a ‘sexy’ issue to tackle and, quite honestly, without the meat that was the leasehold new-build home scandal, we might not have got exactly what we wanted out of this, but given the Government’s response to its own Call to Evidence we can now talk about some major success in this area.
And – while it might not be very popular amongst some of our peer group to blow our own collective trumpets – without the intervention of the CA, particularly in identifying the lacuna in the Commonhold and Leasehold Reform Act which helped convince policy makers to act, then we would not be in this position. Previously, there had been an assumption that these issues around the fees charged and the time required to deliver the necessary information was covered in the RICS and ARMAQ statutory codes – we showed this was not the case and now we appear to be on the verge of getting what we want.
Matt Prior of the MHCLG recently spoke at our All-Members’ Meeting about the Call for Evidence response, and the work of the CA in presenting its vision, its solutions, and its support for change. Not just in the leasehold arena but right across the home buying process – this was a real endorsement of what we have done, and what we seek to achieve in the future.
The Government’s decision is clear: to set ‘fixed time period[s] for managing agents and freeholders to respond to leasehold enquiries’ and the fact its ‘proposal to set maximum fees for the services and information provided by managing agents and freeholders was well received’ means it ‘is keen to introduce such a cap’.
Again, let’s plant the feather firmly in the CA cap here because these are key ‘must haves’ for us as an Association and the fact our members, many stakeholders, and (rather importantly) the policy-makers agreed with us, shows we have been on the right path all along. It would be wrong, in all this self-aggrandising, not to highlight that this was very much a team effort, with input and heavy lifting from many of those stakeholders such as CILEx, SLC, Bold Legal Group and the Law Society working together to highlight the issues to the policy makers.
Of course, the work does not stop here – we would like to see greater use of Commonhold rather than leasehold, we would like to see greater use of technology in areas such as ID verification and the introduction of a Property Log Book, we would like to see far greater provision of upfront information, and full consideration of the impacts, positive and negative, around binding offers and buy-in on reservation agreements, the list goes on. The Call for Evidence response was supportive of all of the above, the Government is working towards these, and it is encouraging stakeholders to deliver. Whether that encouragement is taken on board I suspect will decide whether further mandation is required somewhere down the line.
What we do know is that over the past six to 12 months in particular, not only has the Association taken great strides forward, but the change we want to see has begun to be delivered, not just in a piecemeal fashion but in rather large leaps forward. There is much to be done but the success of our leasehold campaign provides us with greater confidence to move forward and deliver in other areas.
We know that the whole home-moving process is in the spotlight of the Government and policy-makers and we know that they are hugely supportive of the need for improvement, and believe they can deliver change in this area. Over the past year we have repeatedly stated we are on the cusp of something big – the last month or so has perhaps shown how we can help shape that change and what we can all achieve by working together.