Agenda item

To consider the Notice of Motion, referred to the Committee by Council on 22 February 2023.

Councillor M Goldsmith vacated his position as Chair for this item as the seconder of the Notice of Motion. Councillor N Mannion took the role of Chair.

The Committee considered the report in response to a Notice of Motion relating to Government’s Leasehold Reform. Council on 22 February 2023 referred the Notice of Motion to the Economy and Growth Committee for consideration.

The motion, proposed by Councillor L Crane and seconded by Councillor M Goldsmith proposed that Council resolved to:

1)    Write to the Secretary of State for Levelling Up, Housing and Communities to request that the Government:

a.    Delivers the Leasehold Reforms that were promised and that they include the online calculator for lease extensions and enfranchisement as soon as possible.

b.    Prevents the sector from fixing capitalisation rates at a low rate in the calculation to avoid pushing up the cost for the leaseholder.

c.    Speeds up progress on other reforms from the Law Commission – such as Right to Manage and commonhold to address the issues seen today with service changes and insurance commissions

2)    The Council to consider through the refresh of the Local Plan:

a.    Implementing planning policy changes to ensure developers are unable to create so called ‘fleecehold’ where fees are typically secured by a rent charged and;

b.    If and when Cheshire East Council sells any reversionary freehold or leasehold interests, then it will offer first refusal to the existing leaseholder at fair value.

It was noted that the Leasehold Reform Act 2022 which came into force on 30June 2022 restricted ground rents on newly created long leases for residential properties and that the second part of the legislation, which would deal with existing leasehold properties, was awaited.

It was confirmed that there was currently no requirement, as a matter of law or national planning policy, for new open space that was created as part of a development scheme to be conveyed to the Council by the developer. Given the absence of any legal requirements and that a key test of local plan policy at examination was consistency with national planning policy, it was not proposed that the next refresh of the Local Plan provided a route to address the issue. It was also reported that any request to sell any reversionary freehold or leasehold would be dealt with on a case-by-case basis, as the Council was compelled by statute to achieve best price for its land and property assets.  

Councillor O’Leary referred to stock sold by the Council to Registered Housing Providers for affordable housing schemes and asked how many individuals had a protected right to buy as a result of this transfer and if there were any leaseholders/freeholders that were transferred who were subject to charges. Officers committed to provide a written response.

Councillor C Naismith referred to the lack of legal requirement for open spaces to be conveyed to the Council on new estates and roads to be adopted by the Council and queried how the introduction of a local policy on this issue would be inconsistent with the national planning policy framework. Officers committed to provide a written response.

Amendments were proposed and seconded and subsequently carried which sought agreement to amend/add the following recommendations:

Recommendation 3.1 to include reference to concerns raised in relation to management companies encouraging the use of inhouse solicitors.

3.2 The Committee request that the Environment and Communities Committee further investigate any opportunities to deter developers from creating so called ‘fleecehold’ where this is within the remit of Cheshire East council.

3.3 Consideration of sale to the leaseholder be given due consideration during the development of the emerging Acquisitions and Disposals Policy for Cheshire East Council.

Councillor M Goldsmith left theroom whilst the vote took place.

RESOLVED (by majority) That the Committee

1. Agree that the Chair of the Economy and Growth Committee writes to the Secretary of State for Levelling Up, Housing and Communities raising the issues outlined in points 1a-c above, with the addition of the following issue:

1d) That the letter to the Secretary of State include concerns raised by the Committee in relation to the use of inhouse solicitors.

2. Request that the Environment and Communities Committee further investigate any opportunities to deter developers from creating so called ‘fleecehold’ where this is within the remit of Cheshire East council.

3. Note that consideration of sale to the leaseholder be given due consideration during the development of the emerging Acquisitions and Disposals Policy for Cheshire East Council.