June 28, 2017

Sort out LVTs and keep on exposing leasehold ‘legal torture’, says Sir Peter Bottomley

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Sir Peter Bottomley wants a ministerial statement on LVTs in September

Sir Peter Bottomley, Conservative MP for Worthing West, praised those who have been exposing leasehold abuses in a statement to the Commons this afternoon.

He also called on the government to examine the process of Leasehold Valuation Tribunals and asked for a written ministerial statement on their workings to be provided in September.

He cited the case of his constituent, John Fenwick, who won the LVT action over £137,000 notional rent paid on the house manager’s flat at Oakland Court dating back to the Eighties. This issue may now be coming to a resolution.

‘Legal torture’ of pensioners

“I described what was happening to people who, in the majority, are frail and elderly people in their 80s and 90s—those who are still alive since the case began—as, in effect, legal torture, to which they were subjected as they tried to get into the leasehold valuation tribunal proceedings.”

Fenwick and the Oakland Court leaseholders were represented by the Bar Pro Bono unit.

“[But] they were confronted by demands from solicitors and a barrister [for the landlord] to the tribunal ‘to decline jurisdiction and…to dismiss the whole of the application as being frivolous, vexatious and an abuse of process, having no prospect of success.’

“If it takes two or three goes to get in front of a tribunal and the application costs, say, £350, there is a major problem that needs dealing with.

“My issue is about the inequality of arms that leads to oppressive behaviour by managing agents or freeholders. If leaseholders are faced with a freeholder or managing agent who has associated companies in which they do not declare their interest, we end up with the situations disclosed in leasehold valuation tribunal judgments, whereby each leaseholder may be asked to pay insurance costs of £6,000 or £7,000 when the appropriate cost is about £2,000.

“There are scandals that need exposing. We need publicity and better adoption of rules and guidance and, if necessary, the law—although I suspect that the registration of managing agents would do far more —so that many vulnerable and elderly people do not suffer.”

Sir Peter was praised by Barry Sheerman, Labour MP for Huddersfield, for raising the issue. Sheerman has been active on behalf of beleagured leaseholders in his constituency.

Full Hansard report:

5.35 pm

Sir Peter Bottomley (Worthing West) (Con): I want to raise the question of leasehold valuation tribunals. I declare that my parents had to leave their home in the 1950s after leasehold reform. I also declare that I have an interest in a leasehold flat in Worthing, where the landlord is good, the managing agents are good and we are all happy. That is not true of all. There are about 1.8 million leaseholders in this country and the figure will grow. They pay about £3 billion a year in service changes, and that figure will grow, too. Not all landlords create problems, but some do; not all of those landlords are in the private sector. Some are in the public sector and I have come across a case in which a major London council was found to have been overcharging leaseholders enormously.

I have taken up this issue because there was a long-running problem, which is now being resolved, in Oakland court in my constituency. I pay tribute to those on both sides who are helping to resolve it, but until it reached a resolution I described what was happening to people who, in the majority, are frail and elderly people in their 80s and 90s—those who are still alive since the case began—as, in effect, legal torture, to which they were subjected as they tried to get into the leasehold valuation tribunal proceedings. Appeals, delays and applications from the other side blocked them from being heard.

Ministerial statement on LVTs in September

Leasehold valuation tribunals are part of the residential property system that might properly be described as a non-departmental body. They replace the rent panels and I suspect that it falls between the Department for Communities and Local Government and the Ministry of Justice. They are probably more the responsibility of the former, but I stand to be corrected on that.

I do not expect my hon. Friend the Deputy Leader of the House to respond to what I am saying today as I would much prefer to get a letter later. My request to him is that if in September it is possible to have a ministerial statement from the appropriate Minister or Ministers, saying that their officials have met together, taken advice from those who staff and sit on the leasehold valuation tribunals and listened to some of the organisations that have considered the issues, as well as stating how the Government assess the situation and intend to approach it in the future, I shall be grateful.

Let me pay tribute to a liberal think-tank, CentreForum. I anticipate that it will bring out a guide to the issues in leasehold valuation tribunals and the reforms that are needed. Although it is not necessarily a true blue think tank, I welcome its proposals and look forward to reading its full report with great interest.

When my constituents, ably led by John Fenwick, to whom I pay tribute, applied to the Bar Council pro bono unit to get representation, they made the point that when the leaseholders applied to challenge invoices for services that were not being provided, they were confronted by demands from solicitors and a barrister to the tribunal

“to decline jurisdiction and…to dismiss the whole of the application as being frivolous, vexatious and an abuse of process, having no prospect of success.”

If it takes two or three goes to get in front of a tribunal and the application costs, say, £350, there is a major problem that needs dealing with.

‘Oppressive behaviour by managing agents or freeholders’

The tribunals can be very useful for one group of leaseholders who are trying to get a recalcitrant fellow leaseholder to pay up when they are not paying their charges. A very good example appears in an article from 2007 by Liz Hodgkinson in The Daily Telegraph, talking about how they managed to get an order to make one leaseholder pay up thousands of pounds-worth of costs that they had not paid.

My issue is about the inequality of arms that leads to oppressive behaviour by managing agents or freeholders. If leaseholders are faced with a freeholder or managing agent who has associated companies in which they do not declare their interest, we end up with the situations disclosed in leasehold valuation tribunal judgments, whereby each leaseholder may be asked to pay insurance costs of £6,000 or £7,000 when the appropriate cost is about £2,000. There are scandals that need exposing. We need publicity and better adoption of rules and guidance and, if necessary, the law—although I suspect that the registration of managing agents would do far more —so that many vulnerable and elderly people do not suffer.

I am grateful to Martin Boyd of the Charter Quay residents association in Kingston. He points out that neither leasehold valuation tribunals nor the Department for Communities and Local Government

“keep data on the effectiveness or otherwise of the legislation in terms of outcomes.”

He notes that FOI disclosures show Ministers and their advisers what is going on.

The DCLG and the Ministry of Justice probably have very few resources. There may be only one or two officials trying to look after those things, so the Minister has to accept the advice that not much is known and not much needs to be done. The Government’s policy, rightly, is for more leasehold flats, with greater enfranchisement for leaseholders to challenge oppressive costs. We need change, and I look to the Government to review whether staffing is appropriate and whether more people can be brought in to advise Ministers so that there is a better outcome.