Updating post from Reddit.
The article refferenced above: Outright ban on new leasehold flats moves closer.
I welcome it with open arms.
EXCELLENT. I grew up in Spain, where the concept of leasehold does not exist. Every neighbour owns a tiny % of the land the building sits on. Aside from the obvious scam of losing your house once the lease runs out, self management is far better. There are regular "community" (flat owners) meetings, presidency of the community changes every 1 or 2 years, and the only people exempt from holding the presidency are those who don't pay their communal bills, or owners who don't live there. Management companies are much smaller than in the UK, and it's usually just a small firm who stays on top of new regulation, renewing the building insurance, and goes to tender when repairs are needed. If out of 50 owners, only 5 show up at the meetings, those will be the one voting on what is fixed/how/the contractor to use/etc. So people make sure to attend meetings and stay informed.
Is it more work than just letting the management company do everything? Sure. Does it mean that people know their neighbours, are involved in the running of the building, and overall are happier with the state of affairs? Yep. Also, needless to say, their communal bills are insignificant compared to what we pay in the UK.
Hear hear. Same in other countries as well. The UK system is medieval
Lots of comments in this post about how this could never work and how it will be a disaster. But this right here is the answer: 'commonhold' in some form or another is done in other places and it works well.
Two real or imagined examples of how someone somewhere in Scotland didn't repair a roof or didn't pay for a few months don't change anything. You would be surprised, but it turns out most people are 'normal' people. Most people pay. Most people want their roof repaired. Those on the ground floor don't care about the lift and shouldn't be charged (unless there's underground parking, very common in Spain). Etc.
If someone doesn't pay, you can (or should be able to) sell their flat to get the money owed (yes, this is how it works in Spain too).
Such defeatist comments, right? Like everyone is incapable of looking after their own interests, while someone who has never set foot in the building can somehow muster just enough energy to half-ass its management, purely because they're being paid to do so?
there would still need to be some sort of enforcement, if an leaseholder refuses to contribute then legal action would need to be taken to chase the debts.
Sadly you cannot sue a leaseholder for 10% of share of their property. The commonholders will need liquidity and that will inevitably lead to leaseholder being sued and home repossessed and auctions to cover the costs.
I do think there needs to be legislation on how servicing is tendered on leasehold buildings. I suspect the freeholders will ususally asign services to another company that is owned by the same parent company. So they can mark up the prices and make it look like they are just passing down the "costs".
For those existing leaseholds which is not covered by the change in legislation. The leaseholders who live on the property should have ultimate say on who the faciltiies management is tendered to.
Leasehold has been a fucking disaster, most buildings service charges have doubled in the last 10 years, far outpacing inflation, and freeholders have routinely took the absolute piss on any costs they can.
They already do this in Scotland
I would avoid buying a property as a leasehold and
I would also avoid buying a property as common hold.
The problems are different.
The new problem for common hold is the quality of the management team who would on the owners. Imagine a mixture of social housing, uninterested landlords, poor owners, they are not going to agree.
Additionally the lack of independence means that some difficult choices of property management will not be undertaken. Quite simply because the owners wouldn’t want to pay, because I don’t have a roof lol.
There would also be a minority who would never pay the management charges and higher costs for everyone else.
Some commonholds will become ghettos.
Buildings under commonhold still hire management companies, generally at a far lower cost than the freeholders management company because they're not trying to bleed the leaseholders dry.
My building has enough signatures for Right to Manage, we've found a management company that'll save us about a third of our service charge.
That’s great but the management costs are still enormous and the property is still a liability. insurance costs will still remain high.
It profoundly misunderstands the problem
If it costs £100k to repair the elevator it costs that.
If it costs £1mn to insure the building, it costs that
There doesn't seem to be a plan for when the residents council votes not to repair something, and someone dies.
>There doesn't seem to be a plan for when the residents council votes not to repair something
If I own a home and decide not to fix something it remains broken.
Now, If I own a commonhold flat and we vote not to fix something it remains broken.
The plan is, no greedy investment firms adding markup to costs, with no incentive to get best value, eager to increase unnecessary costs to raise invoices and collect ground rent for nothing. With little to no accountability to the owners.
“We”, agreed not to pay and the roof failed. The flat is not mortgageable. lol. Take a look at Scotland.
Do you believe that flat owners require babysitting by investment funds, but not those who own terrace homes? A failed, leaking roof would render their property, as well as their neighbours', unmortgageable in both examples.
Yes, if you want to put it that way.
It’s a type of principle/agent problem.
"Now, If I own a commonhold flat and we vote not to fix something it remains broken."
Thats probably going to get hammered by disability legislation
"The plan is, no greedy investment firms adding markup to costs, with no incentive to get best value, eager to increase unnecessary costs to raise invoices and collect ground rent for nothing."
Did you see the "profoundly misunderstands the problem" comment
There are no secret cabals of the rich getting fat on the poor downtrodden.
As an experienced leaseholder and a block manager, I dismissed the comment due to learned experience. Leasehold on new properties being banned in well overdue, we can only hope they fix enfranchisement so we can put leasehold in the history books.
Your proposition that homeowners need mothering because they own a flat was put forward by the freehold managers' associations and rightfully dismissed as nonsense.
The complexity scales exponentially depending on how big the development is. It's easy to talk in terms of repairing a leaking roof for a block of 4 or 8 flats, but what about when you are talking about problems with an industrial plant room providing hot water to hundreds of flats?
What about paying for FRA works or all the other countless regulatory considerations there are for a big block? How do you even set up the decision making apparatus when you have 100s of leaseholders and most don't even bother replying to emails let alone attending AGMs?
It's not really fair to compare managing a terraced house to shared management of a big block, at least for the people actually doing the managing. You need to hire lawyers and accountants, pay a managing agent to handle repairs and maintenance, commision surveys and reports to ensure you're compliant with regulations, and then if there are any major structural issues which in many cases can run into the millions, you have to potentially coordinate legal action and major construction work that will impact hundreds of people to get it fixed.
All this to say that managing a big, complex development as an RTM is no joke, and it is unrealistic to think that every development will have leaseholders who are up to the task or even have enough time to do it properly.
They can vote not to repair the elevator and use only the stairs.
Did you know that freeholders would get a share of the insurance broker commission? Do you think this incentives them to choose the best value for money? I choose, I get a kickback, but you pay...
Commonhold puts a stop to this.
Yet plenty of other countries manage to do this without buildings collapsing around them
Leasehold doesn’t not exist in mainland Europe, at least the part I'm from. Time to end this leeching practice.
About bloody time. Leasehold has been abused to fuckery, this is why we can't have nice things.
Anyone who owns even a portion of something should have a portion of control as well. Obviously.
Is this just for new builds or will it impact current leaseholds?
only for new builds. not existing
Must have been lucky to have bought a flat in 2017 in the UK as common hold. It’s been difficult sometimes as issues are collective responsibility and not everyone pulls their weight, however, not getting f’d over is obviously a big plus, and I’d do it again if I had the option between lease and common.
They should also either change existing leaseholds or give much heavier penalties for bad management companies.
Our block formed an RTM several years ago, and now instead of a crooked managing agents mismanaging the building and taking kickbacks we've got a crooked RTM director doing it. Of the 150 or so leaseholders about 30 ever play any part in the management of the building. We can't even get enough of them to commit to attending an AGM to remove our rogue director and appoint new directors. Managing a block yourself with 4 other flats is one thing, managing a block with 200 flats is completely different.
This is literally 'condominium' — the system used for apartments all over the USA. It's just been given a social democratic rebrand.