The case of a London leaseholder facing potential forfeiture of her flat due to unpaid service charges, despite her ongoing dispute over the legitimacy of those charges, has once again brought attention to the predatory tactics employed by some freeholders in the leasehold system.
This was reported in the Standard, and can be read here in full.
This viral case highlights the alarming reality that even when leaseholders challenge unjust service charges through legal means, they can still face severe consequences, including the loss of their homes. In this instance, the leaseholder’s refusal to pay disputed charges led to the threat of forfeiture, despite the fact that she had previously won a tribunal against the freeholders for similar charges.
The forfeiture process, often likened to mafia tactics, remains a significant loophole in leasehold law, allowing freeholders to exploit vulnerable leaseholders for financial gain. Despite promises from the government to reform the leasehold system, forfeiture has yet to be addressed in proposed legislation, leaving leaseholders vulnerable to abuse.
Part of the problem lies in the inefficiency of the First Tier Tribunal system, which is overwhelmed by high case levels and lengthy backlogs. Leaseholders who challenge unjust charges often face significant time and financial burdens, including filing fees and the need to provide extensive documentation. Even if they win their cases, freeholders frequently fail to repay owed money, leaving leaseholders in a perpetual cycle of legal battles.
The continued existence of forfeiture as a tool for freeholders to intimidate and exploit leaseholders underscores the urgent need for comprehensive leasehold reform. Eliminating forfeiture would significantly weaken the coercive power of freeholders and provide greater protection for leaseholders. However, the lack of action from the government on this issue calls into question the sincerity of their efforts to reform the leasehold system and protect leaseholders’ rights.