MP takes up cudgels for flat-owners

Home battles: After two landlords were convicted of failing to provide full information on service charges to a leaseholder, Karen Woolfson examines how the legal tide is turning against those who flout the rules and abuse their positions of power

Barry Gardiner, MP for Brent North, is setting up a parliamentary group that will examine the issue of leasehold reform. The group will meet for the first time in March to explore the abolition of the existing system in favour of commonholds, giving flat-owners the freehold of the property on which their flat stands. Their ideas will help to shape the Government's consultative document on leasehold reform, due to be sent out before the end of June.

Meanwhile, Mr Gardiner is drafting a 10-minute rule Bill to present to Parliament on 11 March. He will request that the Housing Act 1996 is changed to allow all leaseholders with cases in the county courts to transfer them to a leasehold valuation tribunal (LVT), where costs cannot be awarded against tenants. At the moment, service charge proceedings that were underway before 1 September 1997, when LVT's came into existence, cannot be transferred. This means many tenants are not benefiting from the new regulations.

Mr Gardiner says: "It's disgraceful that a landlord who loses a court case and is ordered to pay his own costs can end up putting that on the service charge bill." He plans to scrutinise this area carefully.

Mr Gardiner has also set up a working group which includes leading members of housing organisations, leaseholders who have been abused by landlords and representatives from the police. They have just had their first meeting and will help to formulate ideas for the Government's consultative document.

Peter Haler, chief executive of the Leasehold Advisory Service, was at the first meeting, which put legal costs high on the agenda. He stresses: "A number of landlords are profiteering from misuse of legal costs and using them as a means of extorting money from tenants."

He says tenants should take out a Section 20c order under the Landlord & Tenant Act 1985 before they go to court or a tribunal, ensuring that the landlord is prevented from putting his legal costs through the service charges. Meanwhile, he wants strict laws introduced to enable tenants to challenge legal costs before they get to court or a tribunal.

Mr Gardiner says the whole system must be changed. He says: "It's iniquitous. The whole structure is corrupt. We call it an end to feudalism, we want to end that corrupt structure where unscrupulous landlords exploit the inequity of power over tenants."

He says the concept of commonholds is the only real way forward and it appears to be only a matter of time before the Government turns this idea into a reality.