Tuesday, 31 May 2016

Landlords urged to be more open with leaseholders

Private property management associations should work with social landlords to improve the way they consult about leasehold service charges in London.

That is one of a number of recommendations in a report published today by the London Assembly’s planning and housing committee.

The report, Highly charged, suggests ways transparency of service charges can be improved to prevent leaseholders being hit by unexpected bills.

It estimates Londoners pay £500 million a year in service charges.

Assembly member Steve O’Connell, in a foreword to the report, says: ‘While many express dissatisfaction with aspects of the system, and a few allege malpractice, others offer harrowing accounts from ordinary people, with limited financial means, that have received bills for tens of thousands of pounds for unexpected works.

‘When buying leasehold property many people are not aware of the rights and obligations that come with this form of tenure and so for many the complexity of the service charge regime comes as a shock.’

The report recommends that the Royal Institute of Chartered Surveyors, the Association of Residential Managing Agents and the Association of Retirement Housing Managers should review if the effective guidance on service charges is being implemented.

It says if necessary the private sector should work with the ‘best performing’ social landlords to adopt best practice on guidance.

Key recommendations

  • The mayor of London takes into account the financial effect on leaseholders when granting funding for housing improvements
  • The Leasehold Valuation Tribunal provides more mediation and advice to resolve disputes and review how its rulings are enforced
  • The government reviews barriers to right to manage in London
  • The government reviews whether it is possible to make mediation a compulsory first step in the dispute resolution process.

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