Latest news with #leaseholders
BBC News
2 days ago
- General
- BBC News
Court rules law passed after Grenfell is retrospective
A court has said that building owners and developers cannot recoup costs from leaseholders for fire safety remediation work. The Court of Appeal ruling on two separate cases earlier this month could have far-reaching implications for who bears the costs of building safety-related costs in the the wake of the Grenfell Tower tragedy, safety issues were discovered in buildings constructed years or decades court's ruling means that building owners can't charge leaseholders for fire safety defects that were discovered before 2022. 'A retrospective approach' The judges ruled that parts of the Building Safety Act 2022 (BSA) can be applied retrospectively, favouring leaseholders and law came into force in June 2022 in response to the issues raised by the Grenfell Tower fire in 2017, according to the Local Democracy Reporting Service. The retrospective nature of the law was a key factor in its creation, and the Secretary of State for Housing, Communities and Local Government Angela Rayner made written submissions to the court attesting to said: "A retrospective approach provides for effective routes to redress against those responsible for historical building safety defects that have only recently come to light, whatever level of the supply chain they operated at."The court decisions relate to disputes about Hippersley Point in Abbey Wood, south east London and five residential blocks in the East Village Estate in the Olympic Park in Stratford, east the Hippersley case, the tower block's owner Adriatic wanted to charge leaseholders the costs incurred during a tribunal process in which it asked to do away with certain regulations so it could charge residents more than £250 each to carry out remedial fire safety works. In the East Village case, judge looked at an application from the social housing provider and long leaseholder Triathlon which wanted to make the East Village developers pay for remedying fire safety defects via remediation contribution orders (RCO).The East Village RCOs were the first to be made under the BSA, with the developers appealing the First Tier Tribunal's original decision to allow the safety defects at Hippersley Point and in the East Village Estate were both discovered prior to when the BSA became both cases, the Court of Appeal ruled in favour of leaseholders over developers, deciding that parts of the BSA do have retrospective Nitej Davda, a partner at law firm Cripps, said it was "quite unusual" for such legislation to have retrospective effect. He said: "If you take a step back and you think about what happened with Grenfell, which is where all of this emanates from ultimately, and then you think about what is the intention behind the legislation and what is it intended to do."The BSA is intended to do two things fundamentally. "It is intended to give leaseholders protection and it is intended to make developers pay. "If it doesn't have retrospective effect then you are trying to make the act work with at least one hand tied behind your back."
The Sun
2 days ago
- Business
- The Sun
Flat owners could be owed £3,500 over ‘secret' insurance charges according to new lawsuit
FLAT owners could be owed £3,500 over "secret" insurance charges, according to a new lawsuit worth millions of pounds. Some 20,000 people who own flats in the UK are taking legal action against the companies that own their apartment blocks. Legal letters claim freeholders - the building owners - took commission fees for arranging buildings insurance, which was then secretly added to the service charges paid by the flat owners. The homeowners have accused their landlords of "milking them for cash" at a time when thousands have been struggling with the cost-of-living crisis, dubbing it a "national scandal". Lawyers have suggested that each flat owner could be awarded between £1,500 and £3,500 in compensation. They say up to 900,000 homeowners who most commonly own flats in multi-occupancy blocks could be affected. The freeholders were allegedly paid the fees by insurance companies in exchange for buying their products. These were then added to the cost of the buildings insurance by the freeholders or their agents, and the total amount was then charged to the flat owners in the form of service charges without their knowledge, the leaseholders claim. All freeholders involved in the lawsuit have denied any wrongdoing. David Walsh owns a flat in a block in West London, and is one of the homeowners taking legal action. "This is nothing short of a national scandal," he said. "Hundreds of thousands of leaseholders have been struggling with ever-increasing service charges, mortgages, and like everyone else, the cost-of-living crisis. 5 things to check before applying for a mortgage "So, it is even more shocking that our landlords have been milking us for cash by jacking up insurance premiums with hidden commissions. "I'm looking forward to unscrupulous landlords being held to account and paying back what they owe." Velitor Law, the firm taking the class action lawsuit, has written to four of the UK's largest freeholders - E&J Estates, Consensus Business Group, Long Harbour and Ground Rents Income Funds - to recoup the fees. It is expected that around two dozen landlords, who control the leaseholds for close to 900,000 homes, may eventually be subject to the Leaseholder Action claim. The claim seeks to recover a minimum of six years' worth of commissions from landlords, but lawyers have applied to suspend the usual period of limitation, which could see the claim stretch back as far as 1997 in some cases. Liam Spender, the lawyer at Velitor Law, which is taking the class action lawsuit, commented: 'We have now reached a critical milestone in the legal process to get homeowners their money back. "Thousands have signed up enabling us to get to this point. If you are a homeowner in a block of flats, and your landlord arranges your buildings insurance, we'd encourage you to sign up to the claim. "This first set of landlords are now on notice of this claim and they are now going to have to answer in court.' Velitor Law said a second tranche of legal letters to landlords will be issued before the end of the year. Who can make a claim? Up to 900,000 homeowners who primarily own flats in multi-occupancy blocks may be affected, lawyers for the leaseholders say. Velitor Law said that interested flat owners should sign up via It added that the final amount of damages will depend on where the building is, the overall level of commission, whether it is possible to claim for more than six years, and whether the court awards interest and allows recovery of Insurance Premium Tax. The Sun has contacted all four freeholders involved for comment. A spokesperson for HomeGround told the Sun: 'HomeGround's insurance services are subject to the Financial Conduct Authority's regulatory regime and it receives commission in line with that strict regulatory framework.' A spokesperson for Ground Rents Income Fund said: "We do not consider there to be any valid basis for a claim against GRIF." It comes after Mastercard was ordered earlier this year to pay out £200m in compensation to 47 million customers in a landmark legal battle. Mastercard customers were entitled to a compensation payout worth up to £70 each as a result of the long-running case. .
Times
07-07-2025
- Business
- Times
Leasehold reform delays leave homeowners in financial limbo
Almost three in five leaseholders are struggling to sell their home as they wait for government ministers to deal with high maintenance costs. An Opinium survey paints a stark picture of financial and personal insecurity among leaseholders, with 58 per cent of respondents reporting that their ability to sell their home has been hampered by onerous clauses and maintenance costs. A staggering 77 per cent saw a rise in service charges in the past year — of whom 24 per cent experienced an increase of more than £1,000 a year. Planned reforms include improving the section 20 'major works' process to prevent leaseholders from being hit with large, unexpected bills without notice. Leaseholders will also gain the power to demand a switch or veto a landlord's choice of managing agent. Additionally, mandatory qualifications will be introduced for managing agents to stamp out bad practice and poor service. Matthew Pennycook, the housing minister, says: 'The cost of living remains a pressing concern for leaseholders and many are struggling financially as a result of high and rising service charges, and other opaque and excessive leasehold costs.' • Read more expert advice on property, interiors and home improvement Harry Scoffin, founder of Free Leaseholders, the campaign group that commissioned the Opinium poll, thinks Whitehall is taking too long to change the status quo. Some of the proposals, such as giving leaseholders the power to switch managing agents, were recommended in a report by Lord Best as long ago as 2019. Scoffin says: 'The government appears to be going slow and tinkering at the edges, burying us in consultations and hiding behind the judicial review 'lawfare' by the freeholder lobby. 'As the Opinium polling for Free Leaseholders shows, leasehold is treading heavily on people's lives, robbing us of control over our finances, denying us the freedom to sell up for better opportunities and sabotaging our plans to start a family. The stress of being looted in a home that you believed you bought and own by a landlord you never thought you'd have is intolerable.' • Who are the 'shadowy' lobbyists trying to save leasehold? The poll highlights how leasehold is impinging on fundamental life decisions, with 43 per cent of the 1,000 leaseholders surveyed stating it has impacted their ability to start a family, and 55 per cent their ability to move to a larger property. Younger leaseholders (aged 18-34) are disproportionately affected, with 73 per cent in this age group feeling unable to move to a larger home. Jo Cullen, a 33-year-old leaseholder who lives in an east London block of flats, believes leasehold issues have brought her life plans 'grinding to a halt'. Her five-year plan to build a family is out of reach and she can no longer afford to freeze her eggs due to the legal costs involved in battling service charges. She doesn't even know if she can sell her flat while in litigation. Cullen has been battling with RMG, the agency that manages her block of flats, ever since she bought her one-bedroom home in 2020. 'I don't feel as though I've even started to settle in. I've just been playing whack-a-mole the whole time,' she says. The Labour government has yet to deliver on a promise to abolish forfeiture, in which the freeholder can seize the property if the leaseholder breaches their lease agreement. Cullen says RMG has threatened her with forfeiture 'in every other correspondence I have with them'. Most of the other leaseholders in her building are foreign investors, making it difficult to connect with neighbours who share similar issues. She's on anti-anxiety medication and her pre-existing seizure condition has worsened. She feels she's 'just drifting in kind of in limbo' and is 'not the same stable functioning person that I was before'. • My neighbour won't pay her share of the block's service charges Cullen has faced tribunal proceedings against RMG over alleged non-payment of service charges — she claims the charges are highly inconsistent. In the first case, RMG dropped its claim, and a second claim was also dropped, due to an admin error made by RMG. She is now awaiting the outcome of three additional cases that have led to court proceedings. Under leasehold rules, she is still liable to pay RMG's court costs. Government reforms will scrap the presumption that leaseholders have to pay their landlord's litigation costs when successfully challenging service charges. In response, RMG said it recognised that debt collection could be 'distressing', but that service charges fund essential services. An RMG spokesman told The Times: 'We do not recognise the wider accusations made and are encouraging Mrs Cullen to work through our formal complaints processes so her concerns can be investigated thoroughly and fairly.' Meanwhile, Alan* still can't sell his flat in Newcastle upon Tyne due to an onerous ground rent clause. A pensioner in his eighties, Alan has not yet pursued a deed of variation to alter the ground rent due to the high cost and the expectation that the situation would be abolished by the government. He has contacted his MP multiple times but received no feedback on the issue. 'I think there must be strong lobbying by influential freeholders,' he says. Alan bought his leasehold flat in 2017 believing the lease terms were standard, as advised by his solicitor. 'It was only when a neighbour wanted to sell six years later, and he couldn't, that I had to dig into all of this,' he says. His previous leasehold flat had a ground rent that escalated in line with the retail price index (RPI), which he considered acceptable. His current lease, however, has a five-year escalation formula indexed back to the RPI in 2017, meaning it increases cumulatively and will eventually exceed the value of the apartment. • Can we claim adverse possession of the freehold of our house? He pursued a case with the legal ombudsman due to a lack of advice from his conveyancing solicitor, and it found that none of the 20 apartments in his building were properly advised. Alan is a member of the National Leasehold Campaign, which has about 33,500 members on its Facebook group, and he believes the leasehold system is unfair and exploitative. He says, 'It's not economically generating anything, except some income for people who don't do anything to deserve it.' The government's consultation on restricting ground rents for existing leases was launched in November 2023, but ministers still haven't published the outcome. The government has also pledged to make lease extensions cheaper by introducing a standard formula to work out how much it will cost. Currently, it is up to the freeholder and includes 'marriage value', which increases lease extension costs once a lease drops below 80 years, impacting mortgageability. Mark Tomlinson, 59, a former bank employee who was made redundant during the Covid pandemic, can't sell his two-bedroom flat in Sunderland unless he pays about £30,000 to extend the lease. This sum is the same amount he paid for the property in 1992. When he bought the flat, there were 67 years remaining on the 99-year lease, but Tomlinson assumed he would be offered the chance to buy the freehold eventually. Tomlinson has experienced great distress from the tenants who live either side of him. 'It would be a never-ending cycle of noise, dogs barking, dog excrement all over my garden and taunts from the tenants when passing them in the street,' he says. This prompted him to sell the flat, but then he overheard a conversation among his neighbours about lease extension costs, prompting him to research online. None of these implications were explained by his conveyancer at the time of purchase, Tomlinson claims. With 34 years remaining on the lease, Tomlinson estimates he'd have to drop the price by at least 30 per cent of its current market value to sell the property. Even a quick-sale property company wasn't interested in buying it. Tomlinson bought a run-down two-bedroom house nearby to live in instead and is now a reluctant landlord. 'The flat is like a ball and chain. I don't want to be a landlord but I don't want to give it away either.' * Last name withheld
Telegraph
07-07-2025
- Business
- Telegraph
Landlords ‘looting' millions of leaseholders under Labour
Labour is allowing England's five million leaseholders to be 'looted' after stalling on its pledge to abolish the centuries-old system, campaigners have warned. A series of reforms aimed at boosting leaseholder powers have been unveiled by the Government, but critics argue they will fail to deliver change. Under new rules, leaseholders will be able to more easily challenge extortionate service charges, which they are required to pay to cover the upkeep of shared areas in their building. The new proposals – labelled 'performative nonsense' by campaigners – come after Labour previously rowed back on a commitment to abolish leasehold within 100 days of taking power. Housing minister, Matthew Pennycook, said the party still plans to bring the 'feudal system' to an end, but a timeline on the pledge has not been made clear. The smaller reforms have been proposed in a new consultation unveiled by Angela Rayner's Ministry of Housing, Communities and Local Government. It says leaseholders will receive a standardised service charge documentation each year which will spell out clear and detailed information about how their rates are calculated and spent. This is hoped to 'make it easier for them to challenge unreasonable bills, and potentially save money where expenses are unjustified'. Further reforms are aimed at stopping leaseholders who have successfully challenged their bill from having to automatically pay for landlords' litigation costs. Property managers will also be forced to qualify as professional practitioners for the first time. Mr Pennycook said: 'This bold package of reforms will arm leaseholders with greater rights and protections, and empower them to challenge poor practice and unreasonable charges and fees.' But Harry Scoffin, of the campaign group Free Leaseholders, said the proposals do not go far enough and leaseholders will continue to be 'looted' by landlords. He said: 'There is this endless number of consultations. The Government is investing all of this energy on tweaking the current system, rather than abolishing leasehold. We will continue to be looted. 'It's a real worry. Leaseholders are exhausted, and do not want to spend years of their life becoming serial litigators challenging their landlords, which is what would happen here. 'The Government says the reforms will strengthen the arm of leaseholders, but this won't work. These tribunals aren't friendly and leaseholders are sometimes up against KCs, literally the creme de la creme lawyers in the land.' Posting on X, Jay Silva wrote: 'More dithering. Why do we need more consultations? How many more of them do successive governments want?' Another user labelled the proposals 'performative nonsense'. They said: 'You said you would abolish leasehold and have not. This is more stalling.' Last October, Mr Pennycook warned that leasehold reform could take as long as five years, describing it as a 'whole of Parliament commitment'. In its manifesto, Labour said it would 'ban new leasehold flats and ensure commonhold is the default tenure'. The party went on to reiterate this promise in the King's Speech, also promising to regulate ground rents and to 'act quickly' to implement its reforms. In May 2023, Lisa Nandy, the former shadow housing secretary, said a future Labour government would bring forward legislation to abolish leasehold within 100 days. But in April, the party quietly dropped this pledge. The Leaseholders Charity said the Government's latest proposals – which are out for consultation until the end of September – were announced 'with as much enthusiasm as a visit to the dentist'. There are 4.8 million leasehold properties in England, equivalent to a fifth of the country's housing stock. In 2023-24, leaseholders paid an average annual service charge of £1,720, but some costs spiralled to five figures.
Daily Mail
02-07-2025
- Business
- Daily Mail
EXCLUSIVE Families in exclusive Kensington apartment block cry foul after management company's boiler replacement project bill swells from £360,000 to £2.9MILLION
Residents at an exclusive apartment block in Kensington have accused their building's management of overseeing a 'ludicrously overpriced' boiler replacement project – with costs ballooning from an estimated £360,000 to £2.9 million. The eye-watering 250 percent increase on the original estimate, they claim, is not just unjustified – it's unexplained and unaccountable. The work, taking place at North End House, a handsome 1930s red-brick development near West Kensington, will cost almost £50,000 per flat and has left leaseholders reeling, with one saying: 'We've essentially paid the price of a small house per flat – just to get hot water.' The original plan was straightforward: replace old, defunct boilers with a more efficient system, moving the units from roof level to an existing basement boiler room – a shift that should have reduced the cost. Instead, it triggered what residents are calling a 'financial black hole'. One resident, who wished to remain anonymous, told MailOnline: 'We were quoted £360,000 in 2022. Then suddenly the new board presented a figure of £1.3 million. 'That was already insane. But now we're facing a total of £2.9 million. The maths doesn't add up – it's completely mad.' And they've done the maths. The core boiler equipment – comprising the boilers and water cylinders – was confirmed by manufacturers to cost around £60,000 plus VAT, even with a slightly altered configuration. That begs the question: where is the other £2.8 million going? Worse still, residents know that no formal building contract was signed before the work began. 'They just gave it to a contractor on a gentleman's agreement,' one resident said. 'They had money in the bank and pressed go – without proper oversight. 'The contractor was being paid roughly £10,000 a day for 93 days. That's public money. Leaseholders' money. And there's no documentation.' Some residents are being charged £8,000 to £10,000 a year in surcharges alone, on top of existing service charges. The winning contractor, Priory Gas Heating, is a tiny firm of two people according to Companies House filings, but is now managing a multi-million-pound project. Problems with this contractor culminated last month when all hot and cold water was cut off in 60 flats for a week, after the 'wrong pipe was cut' leading to the flooding of a top floor flat. The firm is working with JCF Building Management, the managing agents at North End House. Residents say the lowest tenderer was disqualified for 'non-compliance,' allowing Priory to swoop in. Residents also claim they have been repeatedly denied detailed breakdowns of what's actually being installed. 'We've asked for invoices, lists of equipment, anything. All we get are vague references to 'specifications' – performance specs, not itemised purchases. That's not accountability.' The board members who signed off on the boiler project are Rajiv Chakradaran, Kishore Reddy and Bassam Zaku. Their approval of the scheme has drawn sharp criticism from residents, who say there was little transparency or consultation. One leaseholder pointed to a similar project at Barons Keep, another West London estate, where 122 flats had a new boiler system installed for £352,000 plus VAT – about £420,000 in total. 'That's less than one-seventh of our cost – for twice the number of flats,' the resident fumed. It makes no sense.' With no clear explanation, residents are now exploring legal avenues, alleging possible mismanagement or worse by the board and managing agents, who have so far dismissed concerns with vague references to 'national and global economic factors.' 'Even if you allow for inflation,' one former director said, 'prices haven't risen by 250% in just over a year.' In response Howard Nicholson the Head of Property Management at JCF Management, said: 'Under RICS regulations, it is essential that sufficient funds are in place before entering into a formal building contract. 'At the time, around 25% of leaseholders had not made payment, meaning the project was at risk of indefinite delay. 'To avoid prolonged disruption and increased costs, the Board of Directors of North End House Ltd decided to instruct Priory Gas Heating to proceed, with the understanding that additional funding would be secured through further collections and the planned sale of a freehold-owned flat. 'A retrospective JCT Minor Works contract has now been executed, ensuring all contractual safeguards are in place.' In regard to a detailed breakdown of costs not being provided to the residents, he said: 'Leaseholders were provided with a detailed specification of works, which outlined all major components of the system. 'The project team held meetings to explain that the replacement was not limited to boilers but involved extensive and essential infrastructure. 'Some residents suggested cost savings through cheaper materials or omitting key components. These suggestions were assessed by our qualified designer and contractor but were found incompatible with the technical requirements of the system. 'As the project is still ongoing it has not been possible to provide a full final account with complete breakdowns but this will be made available to leaseholders once all works are completed.' North End House's Board of Directors has not responded for comment.
