In Monday's blog, Joanne Wicks QC wrote about reform of "lawyers' law". A current Law Commission project on the right of a residential long leaseholder to buy the property freehold or extend that lease, is a prime example. The law on lease extensions and enfranchisement for houses and flats is technical, practised by specialised lawyers and surveyors. The result of that law for long leaseholders is not, however, as remote in effect as that technicality might suggest. It has been reported to the Law Commission that the process required has caused "untold stress to homeowners". Similarly, media reports describe the trap experienced by leaseholders of houses, trying to buy their freehold, with a lease which has escalating ground rent. It is that, in great part, which has led to the topic becoming an issue for reform.
With such issues strongly highlighted in the media, might the Law Commission process be seen as too slow, too measured a process? The consultation paper doesn't set out an answer which would simply remove the stress. It sets out different options for reform. For example, in relation to the question of what price a leaseholder should pay for an extended lease, those options range from a simple ground rent multiplier approach, on the one hand, to a variation of the current more complicated valuation process, an aspect of the law as it stands which often leads to litigation. The Commission, too, recognises the competing interests of leaseholders and freeholders; it is meeting with stakeholders from both, as well as with property professionals.
An approach of enquiry into, and an attempt to balance, the interests of two parties in conflict is central to law. It is right in this case to consult with all. For the landlords and the leaseholders, who will be directly affected by any reform, or lack of it, their interests are political. The availability of ground rents as income has been part of our economy for a very long time. If we change it radically, what effect would that have? How should the possible answers to that question be balanced with the need for individuals to have relative financial security in their residential properties, in particular when those properties are homes? That, in the end, is not a question for lawyers. It is the Law Commission's role to propose reform. Whether and what reform is enacted is then, rightly, a question for Parliament.
Cecily Crampin, PBA Member and barrister