Michael Gove’s recent comments in support of leasehold reform have been welcomed by Keystone Law’s residential property partner Katie Cohen, although she insists that certainty and detail are still missing from government plans and the current system is unlikely to be abolished entirely.
Speaking on Sky News on Sunday, the levelling up secretary insisted that the government plans to make it easier for leaseholders of flats to bring their buildings into common ownership to avoid paying ground rents and management fees on their properties. Gove added that that the current leasehold system is “unfair” and that “in crude terms, if you buy a flat that should be yours… you shouldn’t be on the hook for charges that managing agents and other people can land you with”.
The Department for Levelling Up, Housing and Communities has launched a consultation that could usher in a change to the system, offering leaseholders more power.
However, Cohen – who advises on leasehold enfranchisements, acting for both landlords and tenants – said abolition of the leasehold system is unlikely, although reform to the system is very much needed.
“The comments concerning the government’s continued commitment to leasehold reform, whilst encouraging, do not provide the degree of certainty required to fully advise both freeholder and leaseholder clients,” she commented. “It has been over a year since the government opened its consultation entitled ‘Reforming the leasehold and commonhold systems in England and Wales’ and there has been no formal report published on its outcome.
“The daily requests from leaseholders and freeholders alike concerning the proposed reforms are ongoing and our advice remains the same: extend now if your lease is approaching or has fallen below 80 years or if your property is unmortgageable or unsaleable due to adverse ground rent provisions.
“The abolition of the leasehold system in its entirety is unlikely. The reform to improve the system and its operation going forward is highly likely and very much needed,” Cohen added.
