Speed up ban on abusive leasehold rules, law firm urges government

A specialist property law firm is calling on the government to speed up changes in the law to avoid abusive leasehold practices.

Ashley Wilson Solicitors, based in London, says it has seen an increase in the number of people contacting the company about enfranchisement in recent years because of concern about steeply increasing ground rents, onerous clauses in leases, poor management of buildings and unreasonable service charges.

The government says it is working on initiatives to help leaseholders buy-out their freehold and to improve information available about redress for those consumers who face the most onerous terms. The government has also said changes will be made so that ground rents on new long leases – for both houses and flats – are set to zero.

However, no timetable has been set for when specific measures will be introduced.

At the moment, flat owners who have owned their properties for more than two years have the right to apply for a lease extension, which will extend their lease term by 90 years and reduce the ground rent payable under the lease to a peppercorn amount. 

Leaseholders are also able to work as a group with other flat owners in the building to force the sale of the freehold interest in the building, known as collective enfranchisement but the firm says this is not always considered, or even known about, by individual owners.

Jade Wilson, a solicitor at Ashley Wilson, says: “Collective enfranchisement is the process by which the owners of flats in a block can join together to make a claim to force their freeholder to sell the freehold interest in their building to them.

“Abusive leasehold practices must be stopped to avoid more and more flat owners losing control of, what is likely to be, the largest asset that they will purchase in their lives.

“We have people coming to us in exasperation because they have no control over the excessive service charges and poor management of their building, as well as in frustration because they cannot sell or remortgage their flats due to excessive ground rents and/or short lease terms.

“We find that leaseholders are rarely aware of their rights to collectively force the freeholder to sell the freehold interest in their building to them which will prevent the freeholder from continuing to exercise abusive leasehold practices”.