What’s the deadline? Tuesday 22 Feb.
What’s the survey about? In 2020 the Law Commission published detailed proposals for the reform of leasehold and take-up of commonhold. The Department for Levelling up maybe wants to head off objections from freeholders & developers by holding extensive consultations. Whatever the reasons it’s important leaseholders play an informed part in shaping the law.
Its not a quick survey. The required reading, the Law Commission’s proposals is an 83 paragraph legal document. Where it offers a More info link, it just tells you which paragraph to read!
The Law Commission’s proposals can be found here: https://www.gov.uk/government/consultations/reforming-the-leasehold-and-commonhold-systems-in-england-and-wales/reforming-the-leasehold-and-commonhold-systems-in-england-and-wales.
The survey is here: https://consult.communities.gov.uk/leasehold-and-commonhold/leasehold-and-commonhold-reform/consultation/intro/
And here’s a heads up on the questions. (If you identify as an individual leaseholder they start at 10)
- Leasehold reform – The non-residential limit for collective enfranchisement
Question: Do you agree or disagree that increasing the non-residential limit for collective enfranchisement from 25% to 50% would make it easier for leaseholders to buy their freehold?
Context: Currently the law says that if 25% of a development is non-residential, eg shops, then the 75% of residential leaseholders are not allowed to collectively buy the freehold. The Law Commission proposes raising this to 50% so that more leaseholders will be able to enfranchise if they so wish.
- Leasehold reform – Individual freehold acquisitions
Question: Do you support or oppose a 50% non-residential limit for individual freehold acquisitions?
Context: This refers to cases where there is only one residential unit in the property (eg a freehold house) or where the rest of the building is commercial (eg a flat above a shop). As above raising the limit to 50% removes an obstacle to a leaseholders choice.
- Leasehold reform – Mandatory leasebacks
Question: Do you agree or disagree that mandatory leasebacks to landlords as part of the collective enfranchisement process will reduce the cost of purchasing a freehold?
Context: If for instance 51% of the leaseholders wanted to enfranchise, what happens to the other 49%? Rather than the group having to find the cash yo buy 100% of the units, they could require the freeholder to continue to hold the leases on the 49% who wish to remain that way. Currently the freeholder doesn’t have to but a mandatory leaseback means they would have to.
- Leasehold reform – The non-residential limit in right to manage claims
Question: Do you agree or disagree that increasing the non-residential limit for the right to manage from 25% to 50% meets Government’s aims of addressing the historic imbalance of rights between freeholders and leaseholders?
Context: This is similar to the question about enfranchisement. Currently leaseholders are not allowed to apply for a right to manage if non-residential parts of the building exceed 25% of the total internal floor area. The proposal is to raise this limit so that residents of more mixed use properties will be able to exercise their rights.
- Leasehold reform – Right to manage company voting rights
Question: Do you agree or disagree that right to manage company voting rights should be amended to ensure leaseholders continue to have effective control of decisions?
Context: If the non-residential limit is increased this would require a change in the voting rules. For instance the leaseholders of the commercial floorspace may have different interests to long term residents but be able to outvote them. The solution would be to cap the total number of votes that could be allocated to landlords (although landlord/s is ambiguous in this context as it could refer to many different parties).
- Commonhold reform – Voting rights for shared ownership properties
Question: Do you support or oppose that, where Shared Ownership providers are liable for paying for repair and maintenance during the ‘Initial Repair Period’ of a new Shared Ownership lease, they should have the right to vote on matters relating to these works and their costs?
Context: In my opinion shared ownership is a flawed concept, and bolting it onto Commonhold is likely to tarnish that as well. But for anyone in that situation it seems essential that they should have a say in matters that they are being asked to pay for!
- Commonhold reform – Home buying and selling
Question: What should be the maximum fee (£) for issuing a Commonhold Unit Information Certificate (CUIC)?
Context: For the purposes of buying & selling, a Commonhold Unit Information Certificate (“the CUIC”) is used. It would outline all payments in respect of service charges and list any arrears built up by the current owner. I’m not sure that setting a price in ££ is a good idea – maybe it should be set as a percentage of the purchase price.
Question 1 is how much should this item cost? I thought setting a price in ££ was a mistake and it should be set as a percentage of the purchase price. Question 2 is about what happens if the commonhold association fails to provide the document within 2 weeks. Do they then lose the fee?
Question 2 is about what happens if the commonhold association fails to provide the document within 2 weeks. Do they then lose the fee?