The Member of Parliament for Birmingham Edgbaston, Preet Kaur Gill, brought a ten minute rule motion to the House of Commons today which requires landlords to provide accounts of management charges payable under Section 19 of the Leasehold Reform Act 1967 to freehold property owners; and for connected purposes.
The Bill aims to extend responsibility to landlords as well as freeholders, legislating landlords or scheme managers to provide transparent accounts detailing the management charges, also known as ‘Estate Management Schemes’, received and the nature of expenditure.
As it stands, Section 19 contains obligations for freeholders, but not for landlords, and it is only enforceable by landlords. The ten minute rule bill, if passed, will therefore strengthen the legal position of freeholders.
Preet Kaur Gill has been working closely with the Calthorpe Residents Society in her constituency who have faced difficulties as a result of their Management Schemes, despite requesting accounts of the expenditure from their landlord to see how the management fee that they pay is being spent. These residents, like countless others, currently have no rights of redress, and no rights to enforce action when breaches of the scheme occur.
In her speech today, Preet Kaur Gill said:
“It is clear to me that in its current form, the balance of power is not fair nor is it appropriate. Management companies can, by law, use enforcement agents to collect the management charges but individual dwelling freeholders are unable to even obtain details of where the money they have been charged goes or has gone.
Residents who own their own homes as freeholders are left feeling helpless as they try to find out how much is left in the scheme and they are rightly aggrieved that, despite their payment into said fund, the opaqueness of it makes them powerless to try and enforce the responsibilities of the landlord or management scheme manager.”