Stewardship Is the Missing Part of Leasehold Reform

After more than 25 years in the residential property management sector, I have become increasingly uncomfortable with the way we talk about leasehold reform. The debate has become dominated by ownership and control, yet a building can be transparent, democratically run and resident-controlled, and still be underinvested and poorly maintained. 

The question we should be asking is not simply who controls the building today, but who is taking responsibility for its long-term health.

Transparency Does Not Repair a Roof

Transparency is essential, but it is not enough. It does not keep you safe, replace a lift, repair a roof or fund essential communal redecorations. Better-informed owners do not automatically create better-maintained buildings if difficult investment decisions continue to be postponed at the expense of short-term affordability.

A building can have open books, annual reports and a capable managing agent, yet still fail to make the difficult investment decisions needed to protect it over the long term. Deferred maintenance rarely makes problems disappear; it simply transfers the cost to future owners or turns manageable repairs into far more significant liabilities. The challenge is not a lack of transparency, but ensuring that good governance is supported by the willingness to plan ahead and invest before problems become crises.

Residential buildings are long-term assets. The roof, safety systems and communal infrastructure all have predictable lifecycles that require planning, maintenance and eventual replacement. Yet those replacement cycles often extend beyond the time any one owner expects to remain in the building. It is therefore understandable that affordability today can sometimes take priority over investment for tomorrow. That is not a criticism of leaseholders; it is simply the reality of collective ownership and the drive for ‘affordable service charges’.

Stewardship is about making decisions today that safeguard the building for the people who will live there tomorrow.

Every Building Needs a Pension

Other countries have recognised this challenge. Apartment ownership systems in the Netherlands, Canada and Australia increasingly require mandated long-term maintenance planning and reserve funding because they recognise that good governance is needed to protect buildings over decades.

Perhaps the simplest way to explain reserve funds is this: every building needs a pension.

Nobody expects to retire comfortably without setting money aside throughout their working life. Yet many apartment buildings are expected to survive indefinitely with little meaningful provision for future works. When significant repair bills inevitably arrive, they are often viewed as unexpected, when in reality they were entirely foreseeable.

Managing agents also have an important role to play. They should be recognised not simply as administrators of other people’s short-term preferences, but as professional advisers, helping residents make informed long-term decisions that protect both their homes and the buildings they collectively own.

Stewardship Must Be Part of Leasehold Reform

The next phase of leasehold reform should therefore be about more than transferring control. It should also encourage long-term capital planning, adequate reserve funding and governance that rewards responsible stewardship.

Strong rights, transparency and accountability remain essential. But they must sit alongside responsibility. In twenty years' time, a building will not reflect how many consultations were held or how much control changed hands. It will reflect the quality of the decisions made to maintain, invest in and protect it.

David Goldberg, CEO, POD Management