Our meeting with LEASE – April 2024

We first met the Leasehold Advisory Service (LEASE) in December 2023. We have been meeting regularly since then and the following is a summary of our meeting in April.

Note: DLUHC was renamed as the Ministry of Housing, Communities & Local Government (MHCLG) on 9 July 2024.

Attendees: CEO and staff (LEASE), members of EOCS, the Non-Qualifying Leaseholders Group and the Shared Owners’ Network

Introductions and Scene-Setting

LEASE Non-Executive Directors now appointed; change is underway following appointment of new Chair last year. Positive progress now since change as EOCS had no relationship with LEASE since launching campaign combining resident groups in April 2019. EOCS welcome the ongoing dialogue and are pleased with the new working relationship.

Overview of cladding scandal / building safety crisis and range of complexities – issues still with delivery and action on the ground matching the law / rhetoric.

EOCS want to see where we can work together more closely – whether with DLUHC and LEASE or LEASE and HSE BSR, etc.

One of EOCS’ drivers is to understand where LEASE may be able to take on some of the heavy lifting eg advice to leaseholders / updating via respective channels of comms (social media / mailers etc).

Working together is something EOCS have raised with officials and the Minister directly – collecting data on various aspects, better guidance in general but particularly for non-qualifying leaseholders and shared owners, as well as potentially preparing templates (RA Constitutions, Safety Case Reports (SCRs) and Resident Engagement Strategies).

EOCS are continuing to press DLUHC on ensuring this initiative works as well as it can and think there is some “low-hanging fruit” that could help ensure much better communication and direct support for leaseholders with positive outcomes.

The new LEASE CEO explained that a new set of Strategic Objectives were being developed for LEASE and the organisation was likely to take a more formal role as Government’s consumer champion for leaseholders and park home owners.  Developing this role would take time but needed to include a better understanding of the data and case studies that demonstrate problems or can support solutions. In the coming months LEASE increasingly would be reaching out to campaign groups and sector bodies to develop their reach, understand consumer issues and build a broader understanding of the existing landscape of data and information.

Overview of history re draft Building Safety Bill issues from 2021 with proposed Building Safety Manager being scrapped in 2022 – EOCS highlighted issues of duties and compliance still being required and have seen these play out. First with BSR Registration / Key Building Information in 2023 and “cottage industry” that had been created / profiteering, and now relating to SCRs and vast amount of information required.

Building Safety Case Reports

We discussed the impact of the Building SCRs in relation to high service charge demands. The merits of data collection and sharing with the Department. Clearer guidance from the BSR is a start.

HSE BSR “proportionate approach” published towards end of 2023 – issue is that service charge estimates for 2024 are including huge costs for compliance as the initial messaging was that any SCR could be called in from April 2024 or criminal sanctions potentially faced.

Has led to a great deal of profiteering with huge disparity in costs for SCRs. Noted recent letter from Minister Rowley and Philip White on this – a start but EOCS believe more needs to be done. Ideally legislation although recognise not straightforward so more benchmarking / intervention by the HSE / DLUHC needed in the interim.

RMCs RTMs 

Criminal sanction for non-compliance results in volunteer leaseholder directors attempting to navigate law and regulations without guidance, in fear of severe consequences. Penalised twice as they face excessive service charges in pursuit of compliance, in an uncompetitive marketplace: inflated charges for SCRs and other associated compliance.

Unduly costly and punitive to unpaid volunteers – all of whom want to manage and have control of their homes and buildings but feeling pressure from DLUHC and BSR to comply.

EOCS Template Survey 

Gathering and collating further evidence to feed through to Government was discussed. EOCS asked by DLUHC and the HSE BR to provide examples of disproportionate costs. Those were in the recent EOCS survey conducted with 50-60 buildings – now looking to validate. EOCS to share redacted survey with LEASE.

Exemplar Cases & Data

Powerful evidence for policy change: putting forward exemplar cases supported with data might be a useful way to achieve changes in the law, regulation and guidance. Case studies of the worst cases, with EOCS input.

LEASE Round table meeting on 28/03/2024

Meeting of industry stakeholders was useful – particularly the issues raised about consistent risk assessment and the Government needing to do more. Consideration was given to a repeat of the same with the regulators in attendance to outline issues ie the impact of regulation on leaseholders and residents.

Joined-Up Approach

Many agencies and regulators are collecting data – how to centralise the system to ensure a direct, evidence-based approach shaping policy and guidance?

Noted that another EOCS Ask of DLUHC/HSE relates to ensuring joined-up approach by regulators (DLUHC, HSE, RSU, local regulators, Joint Inspection Teams, Homes England, etc) – BSR Strategic Plan advises work underway / complete on high-rise buildings (HRB) by April 2026.

Reference to Minister’s statement in March 2024 re recently meeting BSR and sector leaders to discuss “how we can build a shared plan to increase the pace of remediation further” – vital for all regulators to work together from eg single version of the truth so efforts are streamlined and not duplicated.

Shared Ownership

2022 Dereliction of Duty Report circulated.

Many issues arising here. Additional complexities with eg section 106 buildings where there is a freeholder and head lessee, with ongoing confusion about who should complete the Landlord Certificate and implications for leaseholder protections.

Delay in remediation most impactful.

Leaseholders stuck while other properties prioritised – cannot sell or mortgage flat.

– sub-letting rules: punitive, cannot make a profit. Leaseholder having to subsidise sublet during the wait for remediation (cannot sell) penalised by making a loss.

– lack of guidance or options

– requested buy back

– reverse staircasing

– Subject to Capital Funding Guidance Rules being changed – further delays resolution of immediate problems re resale.

Noted letter from SoS to registered providers in December 2023 but actions on the ground not yet meeting the asks.

Noted recent LUHC Select Committee Report on Shared Ownership and EOCS Statement on the Report.

General comment on conveyancing – more guidance and support needed (as referenced by the Law Society). Issues with conveyancers being asked to validate and verify onerous amount of information.

Landlord’s Certificates | Assistance in understanding content

Incomprehensible to leaseholders in their current form. Professional assistance required to establish matters such as the veracity of the claims and evidence used to support assertions of landlords’ net wealth.

Assistance in understanding from whom to request the Landlord’s Certificate and how to deal with obviation and deliberate mis-signposting by landlords.

Longstanding request on this to DLUHC but no progress. If LEASE could assist here, this would be very welcome.

LEASE Website

Consensus that more useful fire safety content would be welcome, as there is a lack of user-friendly, consistent, up-to-date guidance for specific issues such as non-qualifying leaseholders. For example, the Leaseholder Protections Checker cited as an example of guidance that does not appear to meet its objective for leaseholders with over three properties as it advises they “could” have to pay for cladding remediation (as well as the known issue of having to pay non-cladding costs) despite the Government having stated the opposite in respect of unsafe cladding systems for all leaseholders regardless of status. Similar issues raised for shared owners, including those in complex tenures who need bespoke content and guidance.

LEASE website is currently undergoing an upgrade – a process which could take some time.

In principle, input from EOCS on useful new content was welcomed.

Tribunal Case / Case Law

Legal decisions simplified in layperson’s terms. With headline, outcome, key takeaways, whether precedent set. Short “plain English” summaries – more accessible and useful.

Insurance

Ongoing uncertainty over the usefulness of the “Re-insurance” Facility and its desired intention to reduce the cost of insurance for some leaseholders. Data needs to be collected here to establish impact of scheme – agreed that LEASE would publish survey on buildings insurance. (Post-Meeting Note: survey postponed due to pre-election rules – it will be published shortly.)