Owners of leasehold flats will be congratulating Channel 4 on their hard-hitting Dispatches programme which aired on August 20. As already reported by Fridaysmove, the ways in which many freeholders and their managing agents rip off flat-owners was exposed - especially extortionate charges for so-called repairs and maintenance works.
If you didn’t see the programme, and own a flat (or are thinking of buying one) watch ‘Property nightmare – the truth about leasehold’ on 4oD now.
The present government’s push for more new housing, combined with shortage of suitable land for development in many cities, is leading to more and more flats being constructed. And first-time buyers, faced with finding higher deposits, often find that the only type of property they can afford to buy is a small flat. According to the programme some 40% of all new homes now sold are leasehold flats.
Buyers often don’t understand leasehold
But many buyers don’t understand what they are purchasing – in fact all you are really buying is the right to occupy the property for the term of the lease – often 99 years. The building itself remains the property of a freeholder, who is supposed to be responsible for carrying out maintenance – but the occupiers will have to pay for the work.
How freeholders maximise their profits from flat-owners
One of the scandals highlighted by the programme is the way in which freeholders employ companies which they control to carry out management and repairs – these companies then charge over the odds and make handsome profits at the expense of the poor flat-owners. There is absolutely no regulation of these companies. The best the leaseholders can do is try and take a case to the leasehold valuation tribunal – if they can afford the costs and time involved.
Pressure for leasehold law reform
With more people buying leasehold homes, the pressure for a real reform of English property law is mounting. But while housing minister Grant Schapps said he was ‘on the case’ he has already rejected calls for a registration scheme for management companies – this despite the fact that Scotland already has such legislation.
Get expert help
Unfortunately it seems that many buyers suffer from a lack of information when buying leasehold flats.
If you’re buying a flat, Fridaysmove will make sure that you get the services of a Conveyancing Solicitor who will explain everything to you – phone 0330 660 0286 now. Our website has plenty of information about leasehold ownership, or use our ‘Ask a Solicitor’ feature – it’s free!