Leasehold Reform (Ground Rent) Bill [HL]

Written evidence submitted by Linz Darlington, Director, Homehold (LRGRB03)

Leasehold Reform (Ground Rent) Bill [HL]

Dear Sir / Madam,

I understand that the Leasehold Reform (Ground Rent) Bill [HL] has reached committee stage this week.

I work in the leasehold sector and consider two amendments would be beneficial.

First, the bill defines rent as: "anything in the nature of rent, whatever it is called"- and service charges are excluded. Freeholders may lose their ability to charge ground rent on new leases, but this guaranteed income stream can be replaced by creative new charges. For example, by introducing an annual charge for overseeing a management agent. The "broad definition" of rent was championed by the Housing Minister, Christopher Pincher, as making abuse by freeholders more difficult. In reality, the only recourse available to leaseholders is litigation through at tribunal which is often prohibitively expensive. My view is a broad general definition of the bill should be coupled with a long-list of prohibited charges.

Second, informal lease extensions are excluded, allowing freeholders to retain ground rent. This will incentivise freeholders to offer informal extensions, which unlike the statutory alternative, allow the freeholder to introduce the charges mentioned above. Amendments to the bill should be made to ban informal lease extensions, or perhaps more practically, disincentivise them by forcing the ground rent to be removed.

Many thanks,

Linz

December 2021