The key changes that have been presented to Communities Secretary Eric Pickles are:
That residents associations can be recognised with 50 per cent of qualifying residents plus one supporting the move, not 60 per cent which is the current – arbitrary – figure.
That the freeholder inform all leaseholders with the service charge demand, or once a year, to join a proposed or existing residents’ association.
The changes have been proposed by LKP director Martin Boyd, who is also the chairman of the residents’ association at Chartered Quay in Kingston, Surrey.
On five occasions, Boyd represented the residents at Chartered Quay in its battles over excessive service charges with Peverel and the Tchenguiz Family Trust, which owned the head lease.
This resulted in more than £500,000 being repaid to the residents, the ejection of Peverel and – in July – the purchase of the head lease for £900,000 (it was on the Tchenguiz books at £3.2 million and heavily indebted).
The reform to residents’ associations is being backed by representatives of the three main political parties:
Ed Davey, the LibDem Energy Secretary and MP for Surbiton and Kingston, Sir Peter Bottomley, Tory MP for Worthing West, and Baroness Gardner of Parkes (Conservative), and Jim Fitzpatrick, Labour MP for Poplar and Limehouse.
All are known to have an interest in leasehold reform. In addition, the LKP initiative has secured the backing of:
- Steve O’Connell, (Conservative AM) London Assembly
- Ian Fletcher, British Property Federation
- Caroline Abrahams, AgeUK
- Chris Paterson, CentreForum think tank
- Mark MacLaren, Which?
- Ian Wingfield, Deputy Leader of Southwark Council & Cabinet Member for Housing
“Setting up a residents’ association is often the first step for leaseholders obtaining justice and I am sure Eric Pickles will support a measure that is both beneficial and reduces needless red tape,” said Sir Peter Bottomley.
“Forming a residents’ association was vital when we began our legal battles at Charter Quay,” says Boyd. “We had no idea how difficult it would be to contact enough owners to reach the ridiculous 60 per cent qualifying limit.
“Every conceivable barrier was put in our way to prevent it happening, although we were assured time and again by the freeholder that we would be recognized.
“Only after the Leasehold Valuation Tribunal made the decision for them was recognition granted.
“As Peverel, in particular, continues to assure everyone it welcomes residents groups it may finally have to do something about it if these guidelines are approved by the Secretary of State.”
An officially recognized residents’ association was a vital weapon in the armory during Charter Quay’s battles for freedom, even though it apparently has few rights.
“Formal recognition meant we were able formally to appoint independent surveyors and accountants, and have them seen as independent experts at any hearing.”
Steve O’Connell, Tory Assembly Member at the London Assembly and chair of the planning committee, said:
“It’s pleasing to see a new set of guidelines that are also designed to reduce bureaucracy and make it easier to form leasehold tenants associations. They will also help save the state having to spend so much money on the Property Tribunal with courts arbitrating on these issues as they have to do under the existing guidelines.”
Ian Fletcher, of the British Property Federation, said:
“The Federation’s Residential Management Committee considered that the existing guidelines were long-in-the-tooth and in need of updating and their status needed to be clarified. Working with other stakeholders such as the LKP therefore made a great deal of sense.
“Generally in our experience, collaborative efforts tend to be viewed more positively by Government and dealt with more expeditiously by it, and I hope that will prove the case with these guidelines.
“ Within the existing guidelines there seemed some unnecessarily bureaucratic hurdles to overcome and the new guidelines seek to be more practical and fair in who can vote and to set out a process that seeks reasonable obligations on both parties.
“ The 60 per cent threshold seemed rather arbitrary and on the basis that no one we came across could explain why that had been chosen, and a simple majority seemed a fairer and more sensible basis on which to proceed. Members were concerned about the potential for ‘rival’ groups being recognised and hence the desire for a simple majority.
“We see both residential and commercial sectors at BPF. In the commercial sector landlords are often crying out for better participation in occupier groups and the like. Groups that are properly constituted in the residential sector are therefore welcome.
“The only caveat I would add is that the groups themselves, once established, need to continue to be democratic and representative of residents and not be taken over by a few individuals. Some safeguards are therefore written in to the guidelines. Best practice rolled out by bodies that represent leaseholders is also very valuable in that respect.”
Caroline Abrahams, Charity Director of Age UK, said: “Age UK strongly supports measures to promote the engagement of older residents in the management and control of their own schemes. Encouraging the establishment of recognised residents associations is an important part of achieving this objective.”
The full proposed changes are here: