|
ALEP
2008 Spring Conference Report
The 2008
ALEP Spring Conference conference comprised 80 specialists
in the field of leasehold enfranchisement who came together
to lobby the government to streamline the creaking regulatory
framework.
Former
Chief Executive of LEASE and current Honorary President of
ALEP presided over the conference, which was held in on 29
April in London's East India Club and follows on from the
enormous success of the first conference in November 2007.
The conference
included presentations from Housing Ombudsman Dr Michael Biles,
leasehold specialist barrister Thomas Jeffries and industry
commentator and author Kat Callo of Rosetta Consulting.
Dr Biles
showed how his experiences with landlords showed that good
customer service from solicitors, surveyors and other leasehold
enfranchisement practitioners makes our lives easier and more
profitable. Unhappy customers are costly, he explained, and
improves consumer loyalty. Professionals should not resent
complaints, but welcome them as an early warning mechanism
of service problems.
Download Dr Biles'
slides
Callo
outlined some home truths about what clients think of us,
with terms such as 'arrogant' and 'expensive' being used.
She cited management models including Jack Welch's 10% theory
that delegates could apply to their businesses. She concluded
with a suggestion that strategic alliances could be considered
to improve service levels and gain new business.
Download Ms Callo's
slides
Tom Jefferies outlined some of the major cases and issues
that have arisen since the Sportelli appeal judgment. To a
captivated audience he showed that Prime Central London is
still not a clearly defined area and is the subject of debate
in valuations. Jefferies discussed the calculations of deferment
and assumptions with regard to property prices, explaining
that Professor Lizieri's trend graph has broadly been accepted
by the Lands Tribunal. Some time was spent exploring the surprisingly
thorny issue of what is defined as a house, with a detailed
consideration of Boss v Grosvenor.
Download Mr Jefferies'
slides
The conference broke up into the two very lively syndicate
sessions that sought to raise issues that ALEP should be raising
and lobbying government over.
Syndicate
1
1. There
were vocal calls for powers of attorney to be able to sign
Initial Notices. Many lessees are overseas or elderly and
this causes unnecessary complications for lessees. It was
noted that solicitors can sign counter Notices, in contrast.
2. Abandon
two-year ownership condition for serving Notice for lease
extensions. This seems unnecessary since it has not been applied
to freehold acquisition Notices.
3. Currently
a deposit is needed on serving Section 42 notices but not
on Section 13. This should be equalised with a deposit required
for both or neither.
4. Rateable
values very difficult to determine. A complete overhaul of
the valuation elements of the 1967 Act should be considered,
though delegates noted this might be impractical and counter-productive.
5. Increasingly
freeholders are dragging lessees to the Leasehold Valuation
Tribunal (LVT) with little clear reason. There is a case for
tightening up process to prevent frivolous and speculative
LVT appearances.
6. The
inflexibilities in the timescales for Notice serving mean
that often the enfranchisement process is sent back to square
one due to delays. There should be the ability for the parties
of both sides to agree informal deadline extensions without
missing their chance to apply to the LVT.
7. Section
60 (freeholder's) costs are excessive. Parties incur costs
arguing over costs. A more equitable system should be considered.
8. A procedure
should be implemented for any cases where a counter Notice
has not been served by the freeholder within the agreed time
limit with the price on the initial Notice being upheld and
conveyancing commencing (as opposed to having to go to the
County Court).
9. A procedure should be enabled whereby the written agreement
of both parties enables the voluntary extension of Section
48 deadlines, without the necessity to make an application
to the court.
10. The
Notice-serving procedure is riddled with 'bear traps'. Errors
in minor detail can derail an enfranchisement. The process
should be simplified to reduce the number of such trivial
issues.
11. The
1987 Act does not contain a clear definition of what constitutes
a 'building'. There is a need for the freeholder to split
the development into blocks to serve notice. However the position
is unclear. The case of Long Acre Securities v Karet expands
the definition of building to cover a development if it cannot
practically / easily be severed.
12. Participation
Agreements should be a legal requirement of collective enfranchisements,
with all signatories of Participation Agreements and Initial
Notices becoming legally obligated.
13. The
1993 Act regulations set out a time frame for the preparation
of a new lease once the premium has been agreed. The reality
is that the lease might well need to be exchanged before this
point. The lease should be exchanged earlier in the process
- i.e. the standard London LVT directions should be used as
a model to revise the 1993 Act regulations.
Syndicate 2
1. Considerable
discussion centred on the introduction of a standard relativity
graph to simplify the valuation process. Delegates agreed
that this might be inflexible and self-serving and agreed
to drop this issue.
2. More
guidance was requested with reference to 'no act world', an
issue that is often contentious in valuations.
3. The
concept of Market Value should be clarified. Buyers do not
understand the clear concept with relation to leasehold valuation.
4. Freeholders
would benefit from increased transparency in the initial stages
of Notice serving. Non-participants are effectively hidden
at present.
5. Non-specialists
such as estate agents have a poor awareness of leasehold enfranchisement
issues. There was a call for a body like ALEP to be more extensively
involved in publicity and awareness campaigns.
6. There
should be a legal obligation on signatories to Participation
Agreements and Initial Notices.
7. Freeholders
are regularly seen to use the threat of taking their cases
to LVT as leverage. Consideration should be made for reducing
this leverage.
8. Freeholders
abuse their duty of care about the premium, i.e. they can
quote an unreasonable figure, whereas the leaseholders have
to be reasonable. This inequity should be removed.
9. Freeholders
engage in a number of scare tactics to deter lessees from
enfranchisement. Consideration should be made to reduce the
incidence of misinformation.
10. The
quality of the constituency of LVT members should be considered.
In some cases there is conflict of interest with practising
surveyors sitting on LVTs. In other instances. either lay
people or non-local LVT members do not help the decision making
process of the LVT.
11. The LVT process could be simplified and the need for barristers
obviated to reduce costs.
12. Implement
Notice of Intent (NIP) from Commonhold and Leasehold Reform
Act 2002, but without having to divulge the proposed purchase
price to the freeholder.
13. Clarity
should be sought with regard to appurtenant land being on
the same valuation as the principal land. Specifically, the
Notice should not be invalidated if a global figure is proposed.
14. The
creation of an arbitration service in place of LVTs in simple
cases should be considered. In the case of valuation, only
written submissions should be necessary.
Upon reporting back to the conference several questions helped
catalyse the room into agreeing not to write a letter to the
Minister as originally planned. Instead, the membership would
examine the issues arising from the syndicates and working
parties would develop the themes in coming months.
To see
images from the day click here.
|
