A new lease of life: - CentreForum

A New Lease of Life“the service charge payers have a right to expect thatthe brokers, St Giles, or the agents, Symon Smith,would have attempted to query what was happeningin order to ensure that the exercise was valid and theywere getting value for money”. 53The tribunal found that insurance charges in 2010 and 2011should not have exceeded £2,500. In effect, the leaseholderwas paying more than 300 per cent of a reasonable price.This case is not atypical. It highlights the problems of asystem where insurance is purchased by one party but paidfor by another, leaving the purchaser with less incentive tobe efficient.Access to rights: Leasehold Valuation TribunalsLeaseholders currently face a high barrier if they wish to raisecomplaints against a freeholder or managing agent. Service chargesare by far the most common area of contention, including issues overa lack of maintenance (see ‘Under-management’ above), seeminglyunnecessary work (‘Over-management’) and high insurance costs(‘Insurance’). LEASE reported that annual complaints rose by 46per cent between September 2009 and September 2011 to 7,600complaints, most of which were about service charges. 54Although lessees have a comprehensive set of rights, there iscurrently a lack of infrastructure to help them use these rights. Thelowest form of redress for leaseholders with a grievance againsttheir property manager is the LVT which has significant costs andimbalances. Many managers use an ombudsman service whichoffers leaseholders a free forum for appeal on service issues.But without a licensing system that compels subscription to anombudsman, LVTs remain the lowest point of redress available toall leaseholders.A tension exists between maintaining a high quality, reliablearbitration service and avoiding an unreasonably high barrierfor leaseholders. The tribunal system was designed to be moreaccessible to leaseholders or freeholders than a standard court, buthas experienced something of a legal arms race. Some stakeholders53 London Leasehold Valuation Tribunal: www.lease-advice.org/decisions/8587pdf/7001-8000/7622.pdf.54 B Milligan, ‘Service charge complaints ‘up 46%’ among leaseholders’, BBC News,24 September 2011.32