Government vows to scrap 'feudal' leasehold system

Michael Gove, the Secretary of State for Levelling Up, Housing and Communities, yesterday vowed to scrap the ‘feudal’ leasehold system including ditching the ‘25% rule’ that currently prevents estates like ours being able to obtain the freehold (‘enfranchisement’) and Right to Manage. In TV interviews with Sophy Ridge (Sky News) and Laura Kuenssberg (BBC) Gove said that the government will make it easier for leaseholders in flats to take over their buildings and bring them into common ownership.

The press release on the LUHC website states that Gove “will also take action to ban managing agents and freeholders from taking commissions when they take out building insurance. This is in response to a report from the Financial Conduct Authority that suggested commissions make up almost a third of premiums.”

The FTT application by Canary Riverside leaseholders attracted publicity in the insurance industry last year when the Leaseholders obtained a decision ordering Reich, the Canary Riverside landlord’s insurance broker, to disclose the commissions paid to it and the landlord. That disclosure, which confirmed that a landlord-related company was receiving between £150,000-£200,000 pa in commissions, was pivotal in the FTT determining that £1.5M of commissions had been unreasonably charged to leaseholders.

The Residents’ Association of Canary Riverside has actively campaigned for leasehold reform, supporting the Leasehold Knowledge Partnership, the National Leasehold Campaign and the End Our Cladding Scandal campaigns.