Moves to make it harder to repossess leasehold homes over unpaid charges

moves-to-make-it-harder-to-repossess-leasehold-homes-over-unpaid-charges
Moves to make it harder to repossess leasehold homes over unpaid charges

The British government is facing mounting pressure to reform the current regulations that allow the repossession of a leasehold property if its leaseholder is unable to pay fees of as little as £350. Campaigners have called these laws draconian, and there is cross-party support for their removal from the proposed Leasehold Reform Bill, which is due to be debated in the Lords. The bill would prevent the creation of new leasehold houses in England and Wales as well as make it simpler for leaseholders to buy their freehold. The government is aware of this issue and has promised to work with other parties in the Lords to resolve it.
 
Leaseholders must typically pay both ground rent to the freeholder and service charges for upkeep. A freeholder with a grievance over non-payment can take possession of a property by petitioning a court. Campaigners, however, argue this is an unfair tool that leaves leaseholds feeling intimidated and likely to pay any extra fees, even if they consider these unreasonable, rather than risk losing their property. The threat of loss is significant enough to incentivise many leaseholders to pay off the costs before the legal process begins. 
 
Louis Chadwick, a leaseholder in Croydon, was threatened with property forfeiture following a dispute with his managing agent. The issues arose after Mr Chadwick and his wife bought a flat in 2017, under his wife’s name. By 2022, annual service costs had reportedly risen from £3,200 to over £4,400, 60% above previous estimates. Eagerstates, the managing agent, refuted claims of unreasonably high costs and explained that the charge was based on actual expenses, and additional regulations meant additional services were required. 
 
Campaign groups have argued there is little need for freehold investors to cling to these regulations. Harry Scoffin, founder of Free Leaseholders, has labelled the possibility of losing a property worth £350,000 for failing to pay £350 “obscene”. The Residential Freehold Association reinforces the need for leaseholders to meet their payments, but supported the reform of forfeiture regulations to David (rather than Mary) stop landlords from making an economic killing should bills go unpaid

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