As I stagger towards writing up some case law at the weekend, some notes on things that have happened.
The Solicitors Regulation Authority published a Guidance note – “Advising on leasehold provisions including ground rent clauses“.
This covers a lot of the issues that have frequently be raised by leasehold purchasers as complaints about their conveyancing solicitors – in particular, not pointing to ground rent increase clauses (and the infamous doubling ground rent clauses). There are also useful cautions and warnings for solicitors on a developer’s ‘recommended’ panel as to their duties. Such panels and some of the games developers have played around insisting on their use by purchasers are also being looked at by the CMA.
The Guidance also covers advising on the ‘assured shorthold tenancy’ issue (only some 4 years after we covered it). Unfortunately, we the Guidance says is this:
This includes the risk that a particular ground rent provision is likely over time to cause the lease to be treated as an assured shorthold tenancy under the Housing Act 1988, by virtue of exceeding 0.1% of the property value or otherwise. If this occurs, it will change the nature of the relationship between the client and the freeholder, which could be particularly significant if rent falls into arrears.
Well…. no, that is not right. Mortgage lenders often consider a ground rent of more than 0.1% of property value to be ‘onerous’ and refuse to lend, but it has nothing to do with the AST issue. That arises by operation of sections 1 and 19A Housing Act 1988 and Schedule 1 para 3A to the Act. A lease is an assured (shorthold) tenancy if the ground rent is over £250 pa outside London, or £1000 pa in London.
That aside, the Guidance is a good thing in reminding errant conveyancers of their professional obligations on leasehold purchases, and may help some purchasers with complaints.
While on leasehold, on 8 February 2022, the Leasehold Reform (Ground Rent) Act 2022 was given Royal Assent. This will remove ground rents for future leases (even including, after a further period of time, retirement flats). When it will come into force remains unknown, as it will be by regulation.
This is, by any measure, a considerable success for leasehold campaigners. Not so very long ago, the prevention of ground rents would have appeared something of a wish, or a pipe dream. Determined campaigning changed the landscape entirely (as did the doubling ground rent leasehold house scandal).
And lastly (quite possibly in several senses), we have a new housing minister. Chris Pincher MP, having bucked the trend by lasting a whole 2 years as housing minister, is replaced by Stuart Andrew MP.
It rapidly became clear that nobody knew anything much about him, and his housing record of interest – apart from a spot of NIMBYism in his constituency, was apparently limited to whipped votes (including for all the disastrous bits of the Housing and Planning Act 2016 that never actually made it into force). Some media did pick up that he was a) a landlord, and b) one of the Tory MPs who voted against the ‘fitness for human habitation’ amendment to the Housing and Planning Bill (as was) in 2016.
Yes, I know we got H(FFHH)A passed as an Act in 2018, and yes it was a whipped vote in 2016, but I’m still prepared to carry a grudge for that vote…