June 23, 2017

The day the Leasehold Advisory Service was returned to leaseholders

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– Sector insiders paying £350 each at LEASE’s ‘annual conference’ are told by housing minister Gavin Barwell that leaseholders are the priority

– It will be given the funds to do its job properly without pandering to the commercial interests in leasehold

– Onerous ground rents wrong, says minister. But chartered surveyor valuers tell audience how to increase them

– And Sir Peter Bottomley delivers bombshell speech naming leasehold game-players (who were in the audience), demanding ethical standards and wide-ranging reform.

– ‘Peter Bottomley should be shot,” was one appalled reaction

– Martin Boyd, of LKP, has to gatecrash to hear others repeat his research

Invited and uninvited: Sir Peter Bottomley MP and Martin Boyd, of LKP, at the annual conference of the Leasehold Advisory Service, to which Martin Boyd was pointedly not invited, although his work was referenced by numerous speakers

By Sebastian O’Kelly

The leadership of the Leasehold Advisory Service was blasted by its political masters yesterday and told to make leaseholders the priority of all its activities.

It will also be given adequate funding to ensure that it is not dependent on selling its soul to the commercial interests in leasehold.

A powerful speech from Gavin Barwell, the housing minister, readdressed the priorities of the Leasehold Advisory Service, which was preparing to be self-financing by 2020.

The speech was delivered at the £350 a head “annual conference” of the Leasehold Advisory Service, long criticised by LKP as a trade show attracting some of the murkiest figures in the leasehold game.

Mr Barwell also said there was no excuse for leasehold houses, still less those with Taylor Wimpey-style ground rents, and they will be stopped.

Sir Peter Bottomley reminded the quango that presentations advising freeholders on how to cheat leaseholders with huge insurance commissions were not appropriate for a taxpayer-funded organisation supposedly set up to help leaseholders.

This is a reference to this presentation at an earlier “annual conference”: on how to charge 50 per cent insurance commissions and – the best bit! – leaseholders pay and don’t need to be told.

Sir Peter’s speech was met with open-mouthed horror by the audience who had paid £350 a head to attend.

Sir Peter referenced freeholder and managing agent Martin Paine, describing his business practices a disgrace. Sir Peter termed Mr Paine a “crook who has turned sleaze in leases almost into an art form” on December 20.

Mr Paine, who lands unsuspecting leaseholders with ground rents of up to £8,000 a year, was seated in the front row.

Like a headmaster of old – more in sadness than in anger – Sir Peter invited Mr Paine to discuss matters after the meeting. It is unknown whether this took place.

Benjamin Mire was also referenced – again – as was the financial jiggery-pockery of the Tchenguiz interests.

So, too, was barrister Justin Bates, whose has been named in the Commons, and who makes his living tripping up right to manage applications on behalf of some of the least appetising landlords in the game.

Sir Peter suggested that legal professionals serving game-playing freeholders should devote similar energies to the Bar Council pro bono unit: that is, work for free for social good.

Mr Bates spoke at the conference afterwards, giving his analysis of recent court cases.

He did point out that he had two nominations for the attorney general’s pro bono awards, indicating good deeds on behalf of others. He may want to consider doing a little more, now that he is back in the saddle beating up the leaseholders at the poisonous Canary Riverside dispute on behalf of its Monaco-based freeholder.

“It was a disgrace,” said one outraged (and well refreshed) freeholder attending the conference. “Peter Bottomley should be shot.”

The conference represented a complete about-turn for Roger Southam, the chairman of the Leasehold Advisory Service.

The former owner of Chainbow property management, Mr Southam is now employed by Savills to drum up management business.

He has been keen to expand the commercial activities of the Leasehold Advisory Service. It is unknown whether he will be reviewing his position as chairman following the minister’s reversal of policy.

One scandalous aspect of the Leasehold Advisory Service conference was the exclusion of Martin Boyd, trustee of LKP and chairman of the residents at Charter Quay.

Mr Boyd has selflessly given years of his time helping leaseholders, rich and poor, resolve their seemingly intractable leasehold problems. In fact, he attended the free LEASE evening event – the one that is actually for leaseholders – and held one-to-one sessions with leaseholders needing help.

At LKP, Mr Boyd has also coherently argued the case for change in regulation and law, and has presented the evidence why this is necessary.

Officials know more about Australian strata system, the number of leasehold houses, housebuilder profits from freehold sales, remit of Recognised Tenants’ Associations, incoherence of the legal cost regime at tribunals … because of the efforts of Mr Boyd.

It is thanks to Martin Boyd that government is using vaguely sensible figures for the size of the leasehold sector (4.1 million), not repeating rubbish about there being only 2.5 million private leasehold dwellings.

His research and analysis was referenced (without attribution) by different speakers throughout the day: by the minister, by Johnny-come-lately civil servants, trade body officials and lawyers (or, rather, those who want to end up on the right side of all this).

For the Leasehold Advisory Service there was only one possible response to such provocative and unwelcome activity: snub Mr Boyd, and not invite him to its “annual conference”.

As a result, Mr Boyd had to gate-crash the event, where he was warmly welcomed.

It appears LKP’s “irresponsibility” in criticising LEASE was the cause of this idiotic snubbing by a taxpayer funded entity.

Well, yesterday the quango was told in no uncertain terms by its political paymasters to up its game, stop toadying to the money and concentrate on helping leaseholders.

Further reports of the conference to follow

 

By Martin Boyd

I doubt anyone would consider me as having a thin skin, so the lack of an invitation to the Leasehold Advisory Service “annual conference” over the years has become a bit of a joke.

It does however, get slightly embarrassing that an MP – Sir Peter Bottomley – feels he needs to escort me into the event just to make sure I get past the door.

More concerning is that there are many other people besides myself who spend their own time, money and effort helping leaseholders – and even helping LEASE – but who are not asked to attend.

The “annual conference” is, and has been for many years, a trade show to promote the interests of landlords and agents, or the businesses of a not unreasonable number of the speakers.

Having attended the evening before event for leaseholders – and giving my time helping individual case studies who attended – the comparison was, frankly, an embarrassment for an organisation supposedly funded by taxpayers to support leaseholders.

For the leaseholder session, there were no detailed notes, no major speakers except for one solicitor with a social conscience who spoke on lease extensions. What the leaseholder attendees got was a notepad with the smiling faces of the LEASE chairman and chief executive telling everyone what a great job LEASE does.

At the main, £350 quid a head event, it was very positive – and a huge relief – to hear a housing minister finally support so many of the issues LKP has campaigned for over such a long period.

That the Minister has concerns over the ground rent issues is going to be welcome news to many leaseholders. That he plans to change the law is fantastic, that he may be considering commonhold again seems an entirely good idea.

We have now gone from a position where LKP almost stood alone in saying things were wrong, and where most in the sector were happy with the status quo, to one where things need to change for the benefit of the whole sector.

However, where things went wrong for me was the minster suggesting that the best thing to do for leaseholders is to offer more money for LEASE.

I would respectfully suggest to the Minister that since LEASE claims “Approx. 75,000 page views per month” that does not equate the LEASE helping 850,000 leaseholders a year.

LKP and Carlex websites get about 40,000 visitors a month, but I would hesitate to claim we reach more than a tiny fraction of leaseholders.

Hopefully, more than one or two attendees will have noticed the irony of the fact the Minister chaperoned into the meting by the chairman of LEASE. That’s the very same chairman who had actively marketed himself in the recent past as helping developers to “maximise” ground rent opportunities that the Minister would tell the audience he now seeks to control.

It is also perhaps disappointing that the Minister and the Department has not noticed that LEASE has been a key part of the problem.

It has never supported the work that we do, and sometimes even opposed us. It has been their choice to help landlords and agents for the last 10 years. This was not an initiative from government; the commercialisation of LEASE was its own decision and its self-funding plan – or privatisation – was only announced last year.

Since 2007 LEASE’s interest in reform might most politely be described as tepid, and on occasions it has made decisions that may even be seen as anti leaseholder.

Over the years we have asked them for help with matters being considered by the SFO and police authorities, it declined.

We asked for its help over the Benjamin Mire case and it even declined our FOA request (only providing a single file many years after the event). It has failed to actively participate in the work on Recognised Tenants Associations, on Commonhold, on RTM, on exit fees, on collusive tendering and almost every other subject we have worked on over the years.

Its role on insurance seemed at best ambivalent. It has, of course, remained utterly silent on the ground rent matter.

Its only key interaction had been to require us to submit a detailed report to the DCLG on what LEASE felt had been our “irresponsible” reporting about its (in)activities. Since the department has gone on to work very closely with LKP we assume it was happy with our explanation.

Let’s hope the Minister did not fail to notice that while he discussed issues such as lease extensions, other chartered surveyor valuers used the rest of the conference a more landlord friendly view on such matters.

So while I am enormously grateful to the Minister for his work and his plans and even welcome his view that LEASE should return to its original mission, I have no confidence based on seven years’ of experience that the LEASE management will do more than pay lip service to this goal.

Should this Minister go, I would expect LEASE not to hesitate for moment and return to helping maintain the leasehold status quo that it has served for so long.