Ah, the noble Lord, Lord Kennedy—once again. The Government have been clear about our commitment to addressing the historic imbalance in the leaseholder system, as he knows. The Leaseholder Reform (Ground Rent) Act 2022 came into force in June last year. These changes to ground rent for future leases are just the beginning of our reforms. Further legislation will follow later in this Parliament. It is a complex long-term reform programme, and it is important that we get the detail right.
My Lords, I am aware and am grateful that the noble Baroness is committed to leasehold reform. I have no doubt about that. The Bill, when we get it, needs to: be ambitious by giving proper rights to leaseholders; enable them to purchase their freehold if they want to; make greater use of commonhold; or just get rid of the stupid, petty rules such as the colour of the curtains that one can hang in one’s own home or the outrageous rip-off charges levied against leaseholders, day in and day out. What assurance can she give the House that the Bill will be truly ambitious and transformative, not just a damp squib?
My Lords, the Government have already committed to: making it easier and cheaper for leaseholders to extend their lease or buy their freehold; banning new leasehold houses, so all new houses will be freehold from the onset rather than in exceptional circumstances; delivering a reformed commonhold system as an alternative to leasehold ownership for flats; and giving leaseholders more information about what their costs cover and ensuring that they are not subject to unjustified legal costs. I am sorry that the noble Lord could not find time to come to a meeting that I agreed to the last time I was at this Dispatch Box talking about the same issue. It was at that meeting that we discussed what noble Lords were expecting to see and how we could meet those expectations. However, as I say, we will bring forward further leasehold reforms later in the Parliament but I cannot say at this time exactly what date it will be.
The Minister will be aware that the property companies that own freeholds are able to impose on leaseholders any legal costs that might arise from a leaseholder’s appeal to a tribunal in the face of the freeholder’s exorbitant service charges. When will this extraordinary legal anomaly be redressed?
The Government believe that leaseholders should not be subject to unjustified legal costs and should be able to claim their own legal costs from their landlord. The Government are committed to taking action to address this as soon as possible.
My Lords, I want to pursue what the noble Lord, Lord Kennedy, called rip-off charges, which the Government could take urgent action to address. I shall give the Minister an example. Fire doors are now to be inspected—rightly. Leaseholders are unable to make the arrangements for that inspection but freeholders or their agents do. One leaseholder contacted me to say that they are being charged £80 for their front door to be inspected each time—£320 a year. That is a rip-off service charge. What on earth are the Government going to do to address these rip-off service charges?
I cannot comment on the individual case, but the law is already clear that service charges must be reasonable. That is set out in Section 19 of the Landlord and Tenant Act 1985. If leaseholders feel they are being ripped off, they can apply in First-tier Tribunals for determination on this. However, I agree that there is more to do. The Government are committed to ensuring that charges, particularly service charges and these extra charges, are transparent. There should be a clear route to challenge or redress if things go wrong.
My Lords, in light of the commitment made by the big six lenders to accept mortgage applications for flats with building safety issues from Monday 9 January, will the Minister confirm that the Government will monitor their lending decisions to ensure that this time their commitments will be fulfilled, so that this part of the housing market can be unfrozen?
The right reverend Prelate brings up an interesting point. I do not know exactly what the Government will do, as the announcement was made only this week. However, I will find out exactly how we will monitor them and the process, and come back to her.
My Lords, I apologise to the right reverend Prelate. Can I press the Minister on the timetable? She said that she expects the Bill to be introduced before the end of this Parliament. Does she mean that it will be introduced before the election? It is not only disappointing that we have had delays but profoundly destabilising. For example, leaseholders no longer know whether it is safe to pursue enfranchisement or whether they should wait for the Bill. Another thing that has happened in recent years, with the extension of permitted development, is that there are blocks of flats with leaseholders held captive by freeholders who are pursuing upward extensions under permitted development, without the protection of law. These leaseholders do not even have protection in case they have to be decanted while building works are going on. It is a very serious situation and it is accelerating. I would like the Minister to advise on that point.