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Has the coalition abandoned leaseholders?

publication date: Aug 13, 2010
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Brett Williams
Hard on the heels of the Housing Minister’s announcement in early June that he would not be introducing regulation of the private rented sector and managers of leasehold blocks of flats, Grant Shapps has now announced he will not be introducing the long awaited new accounting requirements that would have protected lessee service charge funds.

Under the provisions of the Commonhold and Leasehold Reform Act 2002 lessees’ money was to be held in separate designated bank accounts and lessees would have the right to automatically receive a full set of annual service charge accounts along with an accountant’s report.

“At the end of June the Communities and Local Government department informed us that, after eight years since the Act was passed and three years of intensive work to produce the rARMAegulations, matters were not going to be progressed,” states Brett Williams (pictured), chairman of the Association of Residential Managing Agents (ARMA). “The law was in place, the regulations near to completion and simple parliamentary processes left to complete – we were so near to giving lessees some really worthwhile protection and then ‘for the want of a nail’, nothing! Grant Shapps, has still to make a public statement on this, but we are given to understand his reason is to reduce the regulatory burden. On whom? The very rogues who do not handle lessee money properly. Good leasehold landlords and managing agents are fully accounting for lessee money already so where is the burden on them?

“The end result is we are back to self-regulation and ARMA will play its part in filling the dreadful void in lessee protection this Coalition has created. Not least we will be looking to produce detailed guidance on good accounting practice to supplement the existing Codes. And, to at least give lessees a ‘fighting chance’, we are calling for all managers of leasehold property to be subject to independent redress through an Ombudsman Scheme as is already the case for members of ARMA and our fellow trade and professional bodies.”