A new lease of life: - CentreForum

A New Lease of Lifebrinkmanship and exacerbates power asymmetries betweenlessors and lessees. For example, some managing agents writedirectly to mortgage providers as well as leaseholders to demandpayment of unpaid charges with large administration fees. Riskaverse mortgage lenders are likely to simply pay the charge, evenwhen it is unreasonable, and pass the cost onto the leaseholder.Forfeiture can also be used to exacerbate other weaknesses ofleasehold tenure. As discussed in ‘Freeholder Control’ above, forexample, the owner of a house with a 999 year lease could chooseto pay an exorbitant fee for retrospective consent for developmentfrom their freeholder in order to avoid the risk of forfeiture.Clearly, it is essential that the freeholder has powers to enforce thelease agreement and recover costs. But at the very least, the lesseeshould get the majority of the value of their property back minustheir debt, a fine and the freeholder’s costs, rather than losing the fullvalue. 84 A small claims court could be used to recover the costs andif this was unsuccessful then as a last resort the sale of a leaseholdproperty could be forced. The key element that any reform in thisarea must contain is that, as opposed to current arrangements, theleaseholder should receive the remaining value of their propertyafter outstanding debts and costs have been paid.84 A £350,000 leasehold property in Camden faced outstanding bills of £1,266.38,which was forfeited meaning that the owner made a loss of £348,733.62 .See www.publications.parliament.uk/pa/cm200102/cmhansrd/vo020108/debtext/20108-22.htm.48