We have established a reputation for our outstanding level of service, going that extra mile for all our clients, with a firm foundation rooted in our conveyancing knowledge and the laser like focus of our expert conveyancing team, headed up by Anne-Marie Fowler, Managing Director.
Our industry leading expertise is highlighted in our detailed understanding of legislation, Anne-Marie’s attention has recently been focused on an issue associated with the s121 Law of Property Act 1925 which was having a significant impact on one particular client which was causing a lot of anxiety, stress and has in fact ended with the chain collapsing with this issue at the bottom of the chain unable to be resolved. Leaving all the home movers in the chain out of pocket, very stressed and lost as to what to do next. A situation that a legislation change can prevent in the future!
When required the Government have been very quick to act on urgent passing of legislation, and when driving in to work, pondering how the chain I referred to above would pan out, I heard the report of a pass in urgent legislation preventing a prisoner from entering into a civil partnership, which made me think… it is seemingly possible to get things changed when the Government consider something as an “urgent” need.
This fuelled me to want to reach out to make the point that (although lots of things do need to change in this country) a straightforward change to disapply clauses in a 100 year old piece of legislation would genuinely change the way that conveyancing chains and transactions flow – and that it is possible that we could, in the future, be reflecting anecdotally on why this wasn’t done sooner!
When I got to the office that day, I decided it was time to put pen to paper and to use my position as a leading law firm owner to grab the attention of the person capable of making some change – the Housing Minister.
S121 Law of Property Act 1925 Overview
Within this piece of landmark legislation lie provisions enabling the person or body corporate with the benefit of an estate rent charge on a freehold house to potentially take a lease of property when the estate rent charges are unpaid for more than 40 days (whether or not a demand has been made for this amount) and they can do so within giving notice of this to anyone (including a mortgage lender).
You will undoubtedly agree that this is not a proportionate remedy for the collection of any debt, but what is worse is that even when the debt is repaid, there is no obligation for the lease to be automatically terminated. Many estate charges are typically in the region of £200-300 per annum and so the proportionality of loss here is extremely imbalanced, inappropriate, and quite frankly wrong and flies in the face of the consumer protection focuses we have in place throughout our legal framework.
In practice the impact of this is that lenders are rightly insisting that this part of the legislation is disapplied, or that there is provision for them to be adequately and properly notify, ensuring that they are given the opportunity to settle such debt.
Practically, the problem is that to change the position to protect the home owner and/or the lender from the impact of the legislation, a deed needs to be drawn up to vary the original deed which involves additional legal fees, timescales and worst of all a whole heap of stress that the home mover doesn’t need.
In the case with my particular clients (the one that fuelled my mini crusade for change!) there was a misunderstanding by the lawyer at the bottom of the chain in respect of whether the legislation even applied, and the estate management company refused to vary the lease. The misapplication of this legislation means that often deeds are misinterpreted, and conveyancers and often lenders disagree on the required remedies to the problem and ultimately, it’s the home movers who lose out.
Therefore, after putting pen to paper, explaining exactly the financial, physical, and practical impact this had on my clients and the others in their chain, my email was sent to the Housing Minister and I wanted to share their response which focuses actually on their leasehold reform plans but doesn’t touch on their plan to tackle the issues surrounding estate charges.
Anne-Marie Fowler, Managing Director
The Ministry replied to Anne-Marie’s letter clearly highlighting the issue and the requirement for urgent change. They have shared with Priory Law the intent to make a change, recognising the issue highlighted by Anne-Marie
The Government is committed to ensuring homeowners are provided with greater rights, powers, and protections over their homes by implementing the provisions of the Leasehold and Freehold Reform Act 2024. The Government also confirmed in the King’s Speech on 17 July 2024 that it intends to publish draft legislation on leasehold and commonhold reform.
The Government is determined to further reform the leasehold system, enacting remaining Law Commission recommendations relating to leasehold enfranchisement and the Right to Manage. In addition, the Government has said it will tackle unregulated and unaffordable ground rents and remove the draconian threat of forfeiture as a means of ensuring compliance with a lease agreement.
The Government will take further steps to bring the leasehold system to an end, by reinvigorating commonhold through a new comprehensive legal framework, and consulting on restricting the sale of new leasehold flats so commonhold becomes the default tenure. And finally, the Government will also consult on the best way to address the injustices of ‘fleecehold?’ private housing estates and unfair maintenance costs.
Some other exciting news has followed since this and Anne-Marie has been invited to present at the Westminster Forum Policy Group on this point highlighting the need for urgent attention here, the link for the forum is here if you would like to attend.
Priory Law is an outstanding conveyancing firm practising throughout England and Wales. The team, headed up by Anne-Marie Fowler, are not only known for their expertise, but also their exceptional customer service. This focus on service and genuinely caring about supporting their clients shines through all the team at Priory Law and is evident in the ever-increasing list of five-star reviews (available to see via Google and Review Solicitors)