I fully support the Government’s wish to overhaul the antiquated and feudal leasehold system in this country and address the imbalance of power between freeholders and leaseholders. I thank the Minister for his ongoing discussions with me about a number of issues I have with the Bill, and for attending the leasehold roundtable that I held recently with my constituents.
I would like the Government to abolish the system completely, but I understand that that will not happen with this Bill. I have therefore tabled an amendment and three new clauses that would improve the Bill further. New clause 12 would reduce the participation threshold required to claim the right to manage from 50% to 35%. That is a massive issue in Cities of London and Westminster. More than 1,300 properties in the City of London and an eye-watering 12,100 in Westminster have owners living abroad or are owned by companies using central London’s golden postcodes as a place to park their cash. That reduces the ability of leaseholders in those blocks to secure the 50% of signatures required to achieve the right to manage, as it is incredibly difficult to contact those overseas leaseholders for a meaningful discussion.
Let me give an example of that type of dilemma in my constituency. Residents in The Quadrangle in the Hyde Park Estate say that leaseholders in their block will struggle to meet the 50% participation threshold. They estimate that at least 40% of leaseholders in their block do not live in the building and are uncontactable. Accepting new clause 12 and lowering the threshold to 35% would give many more leaseholders living in similar blocks the chance to manage their buildings.
I commend the work that has been done on the Bill to support blocks that have shared commercial and residential usage. The Bill proposes to increase the proportion of commercial or non-residential space permitted in an individual block for a right to manage application from 25% to 50%, but I believe we can go even further. I have heard from many residents whose blocks will fail to qualify even after the threshold rises to 50%. For example, residents of 8 Artillery Row in Victoria believe that increasing the threshold to 50% does not go far enough, as the residential element of their block is lower than 50%. That is why amendment 17 is needed, as it would allow residents in a block with up to 75% commercial premises to apply for the right to manage.
New clause 14 is similarly designed to allow more leaseholders to strive for the right to manage, especially those in mixed-use buildings. Simply sharing a broom cupboard with a commercial property can disqualify them from claiming the right to manage. At Cambridge Court in Marylebone, for example, leaseholders striving to manage their block would benefit from the Government’s proposals to increase the non-residential threshold allowed
in a building, but they are concerned that their ability to qualify for the right to manage would be undermined by the existence of a single shared car parking space in their building. My new clause 14 would amend the Commonhold and Leasehold Reform Act 2002 by adopting recommendation 5 from the Law Commission’s “Right to Manage” report, which is to allow leaseholders in mixed-use buildings with shared services or underground car parks to exercise the right to manage.
Finally, my new clause 15 would correct the unintended consequences of the Building Safety Act 2022. That Act has interfered with the long-standing section 24 regime, which was a vital right for leaseholders. It introduced an accountable person mechanism that expressly banned section 24 managers from being the accountable person. Consequently, specially trained and vetted professional property managers willing to take on difficult sites have been barred from being the accountable person. That makes absolutely no sense, and it stripped leaseholders of an existing right. That could not have been the Government’s intention when they introduced the 2022 Act, which was intended to provide leaseholders with additional statutory protections. So many leaseholders in my constituency and across the country would benefit from applying for a section 24 manager, but they cannot risk it if they are in blocks of 18 metres or higher because of the accountable person regime issue arising from the Building Safety Act. It is imperative that our buildings are safe, that leaseholders are safe, and that the burden does not fall heavily on leaseholders.
I will not press my amendments to a vote, but I hope that the Government will consider what I have spoken about and work with me to introduce the measures in the other place. This is a watershed moment for the Government to prove that they understand the terrible treatment that leaseholders have faced and continue to face by incompetent freeholders, and to address the imbalance between freeholder and leaseholder. I hope that the Bill will deliver real change.