I recently had the pleasure of speaking at the Negotiator Conference on the subject on the changes in the housing market which prompted an interesting reaction. Asking how many of the estate agents were aware of the Information for Leaseholders sheet which should be given to all prospective buyers there was not a hand in the room which went up. Not one of the attendees was distributing the document.
For the leasehold market to deliver fairness and evenness for all will require the buyers to know what they are buying into with a leasehold property. We have to make sure that through the NAEA we get the message out widely and ensure the information is made available for all. If purchasers understand what rights and responsibilities they are buying it will assist the improvements in the service delivery.
In any capitalist society profit is a driving force and property development is no different. As we speed through the 21st Century there is a growing requirement to deliver transparency and compassion in all business arenas. Complying with the law is not being enough, businesses have to deliver morals and compassion above and beyond the law – a good thing and it means that standards will be raised step by step. Of course the challenge sits with who provides the moral compass.
We are seeing a seed change in politics where the old guard is being disrupted by fed up voters wanting change. Business arenas are being disrupted by new entrants the most obvious examples being taxis versus Uber; record sales versus Spotify; letting versus Airbnb.
In a recent case (Nemcova v Fairfield Rents Ltd) a leaseholder has found themselves unable to use Airbnb to rent out the property because of breaching the terms of the lease. Some would see the lease being at fault in not allowing someone to use a flat as they wish and not to be able to make money as they wish. But it is something they could have checked in advance as the terms of the lease would dictate a property’s use.
Uber has relied on its driving staff being self-employed so they could deliver cheap fares. They had no assets and owned nothing, effectively just providing a virtual service. Well no longer, the British Courts have ruled the drivers are employees and entitled to employment rights. So is it the fact that people could get cheap fares that they didn’t mind about the treatment of the Uber drivers?
We are seeing shifts in estate agency to provide cheaper agency services by online platforms that let you become the agent. How will that allow for complex transactions or explaining leasehold? Coupled with cheap conveyancing outlets who do not charge enough to be able to explain lease terms in detail. These disruptors in the market place could actually compound the lack of leasehold understanding.
If someone buys a flat intending to use Airbnb would they tell the conveyancer to have it specifically checked? Would a cheap conveyancer look out and flag the issue? We are in for interesting times, but it behoves all property professionals to work to ensure all leaseholders know their rights and responsibilities.
Roger Southam is Chair of the Leasehold Advisory Service