| Chairman | Lord Richard PC QC |
| Directors | Ron Armstrong (until December 2004) |
| Jennifer Ellis | |
| Robert Levene | |
| Roger Malvern (from December 2004) | |
| David Marcus | |
| Trevor Moross | |
| Chief Executive | Peter Haler |
In my report last year I raised my concerns at both the increasing workloads and the underfunding of LEASE and it has been immensely gratifying to have received such a positive response from the Government. During the latter part of 2004 we were asked to prepare a draft for our first Corporate Plan which resulted in an invitation to submit a supplementary grant application.
The Office of the Deputy Prime Minister, our principal funder, was able to approve a substantial top-up grant enabling recruitment of additional staff and an overall expansion of the service. The final approval and publication of the three-year Corporate Plan later in 2005 will place LEASE onto a much more secure business foundation, better equipped to deal with the high levels of demand for advice we continue to receive. With four more lawyers in place as advisers we have outgrown our City Road offices and will be moving to new premises during the coming year.
Perhaps the most significant expression of Governmental support of LEASE is the decision to award Non-Departmental Public Body status to LEASE, making us, as we used to say, a quango. This is likely to happen with effect from April 2006 and represents a major vote of confidence in LEASE, both in the quality of the service we provide and the efficiency of our business. I must record my thanks for LEASE's new status and secure funding to Keith Hill MP, the then Minister, and to his officials in the Department, with whom we continue our most productive relationship.
The major events of the legislative year were the very welcome commencement of the forfeiture and rent demand provisions of the 2002 Act, together with the much-anticipated introduction of commonhold in September. I remain disappointed at the Government's apparent lack of conviction of the merits of this important provision in the lack of any initiative to prompt or otherwise encourage take-up of commonhold. To date, no applications have yet been made to build commonhold units at a time when, as the National Housebuilders Federation tells us, flat building is at an all-time high. In the context of the Government's drive for a major expansion of accommodation, particularly in the south-east, this seems a lost opportunity.
The slowness of progress on commonhold will be felt particularly by my colleague on the Board, Ron Armstrong, who pioneered moves toward the new system with the publication in 1984 of his paper 'Leasehold - time for a change' for the Building Societies Association. Ron stepped down from the Board in December and will be greatly missed. As well as a tireless champion of commonhold, he was, with David Marcus, a co-founder of LEASE and provided the greatest support to his colleagues on the Board and to the staff during his ten-year membership. In his place we welcome Roger Malvern, a greatly experienced property lender, nominated by the Council of Mortgage Lenders.
In view of the change in status of LEASE and its relationship with the Government, I have decided to resign from the Chairmanship. The last few years have been exciting and heartening - exciting because of the way the work of LEASE has expanded, and heartening because of the recognition by the Government that LEASE plays an increasing and vital role in advising the public of the legalities of their position.
I have greatly enjoyed working with LEASE and wish it well in its new form. Peter Haler's enthusiasm and hard work augur well for the future. He and all the staff at LEASE who have contributed so much to its success deserve our congratulations.
3.1 LEASE is an independent service providing free legal advice on all aspects of residential leasehold and commonhold in England and Wales; it is a private company, wholly funded by grant aid from the Office of the Deputy Prime Minister, the Department of Constitutional Affairs and the National Assembly for Wales.
3.2 All LEASE advisers are legal professionals, either solicitors or non-practising barristers, able to offer high-quality advice from a position of specialisation in the subject. LEASE has gained public recognition as a fund of knowledge on residential leasehold and as a resource readily available not only to leaseholders and landlords but also to professionals such as solicitors, valuers and managers working in the field.
3.3 LEASE publishes a wide range of advisory material, both in print and on its comprehensive website; the website also provides unique access to all decisions and determinations of the Leasehold Valuation Tribunals relating to purchases and lease extensions under the Leasehold Reform Act 1993 and the Landlord and Tenant Acts 1985 and 1987, and applications concerning the right to manage under the Commonhold and Leasehold Reform Act 2002.
3.4 LEASE has a formal role in the provision of advice to Government on leasehold matters and the development of commonhold through our agreed work programmes.
4.1 In the past year LEASE responded to 24,166 enquiries, which is a little less than last year. However, demand for advice remains strong and there are several reasons for the shortfall. One area of lesser output is in enquiries dealt with by the reception staff, down by 1,078 or nearly 54 per cent. We are quite happy with this reduction in that it represents a better service provision. These clients were, predominantly, those unable to get through to an adviser on our old telephone system and who settled for receipt of one of our publications; virtually all of them would have subsequently rung back, or written in, for more detailed advice. Our new automated telephone system, installed in April, now provides a full queueing arrangement ensuring final connection to an adviser, and has much improved service delivery to clients.
4.2 There is also every indication that more clients are obtaining the published information from our website. This has a very high level of access, currently running at around 1,100 discrete visitors per day. Comparing the period October-March 2004-5 with the same period last year shows an increase of 32 per cent in visitors to the site. This represents a rather intimidating 400,000 visitors a year. Levels of enquiry to LEASE, by all media, are remarkably high in the context of the estimated total of around two million leasehold dwellings in England and Wales.
4.3 Certainly the enquiries are becoming more complex, in line with the developing legislation and the greater complications in leasehold management. Every attempt is made to deal quickly with enquiries but sufficient time must be given to respond properly to the client; telephone responses average 10.33 minutes but arranged interviews for more involved problems generally exceed one hour.
5. Commonhold and Leasehold Reform Act 2002
5.1 LEASE greatly welcomed the commencement of the provisions introducing commonhold in September, although we regret the lack of any publicity by Government to encourage take-up of commonhold. Interest by developers seems very limited: at the end of the financial year not a single application had been made to the Land Registry to set up a commonhold scheme.
The difficulties of conversion of existing leasehold buildings to a commonhold was accepted by Government but it is discouraging that none has yet occurred. We have published a guide to commonhold, both in hard copy and on the website.
In October, LEASE arranged a seminar on commonhold for developers, in conjunction with Trowers & Hamlins; this was well attended and generated lively discussion but, clearly, has yet to produce results. LEASE had expected to play an active role in the promotion of this important new provision and we are disappointed by the prohibition of any activity for the promotion or encouragement of take-up of commonhold in our funding provision from the Department of Constitutional Affairs. While we fully accept the Government's expressed view that commonhold should remain a choice for the market to determine, there must be doubt that any significant progress will be made without some major incentive.
5.2 We were happy to see the commencement in February 2005 of the much-delayed provisions requiring prior demand for ground rent and the substantial improvement to the forfeiture procedures. Both provisions were included in the Act in response to wide concerns as to abuses of the original forfeiture provisions and, although we understand the administrative reasons for the delay, we have to acknowledge that the abuses continued during the three years we awaited commencement.
5.3 We reiterate our concerns, with those of others, in the impracticability of the uncommenced provisions relating to right-to-enfranchise companies. We are grateful that ODPM has accepted our representations and we are aware that the Department is exploring means to a satisfactory resolution.
6.1 During the latter part of 2004 we were asked by ODPM to draft our first-ever Corporate Plan, including proposals for the expansion and development of new roles for LEASE. In furtherance of this expansion, the Department was generous in provision of a supplementary grant allocation. This enabled the recruitment of an additional four legal advisers, three solicitors and a non-practising barrister, and an extra administrator who will also act as PA to the Chief Executive. With the larger establishment we have outgrown our City Road premises and will be moving to a larger office, with the capacity for more private interview space, during 2005. (The Department has agreed to the underspend from the supplementary grant being carried forward to 2005-6 and this is reflected in the audited accounts on pages 11 and 12.)
6.2 LEASE's expanding roles will include:
Publications
Assumption of responsibility from ODPM for the production and distribution of all advice materials relating to residential leasehold. The Department will discontinue publication of its omnibus leaflet Residential Long Leaseholders - a guide to your rights and responsibilities by the end of 2005-6 and LEASE will expand the current range of publications to cover all relevant issues. The LEASE publications will carry the logos and identities of both ODPM and the Welsh Assembly Government in addition to our own, but will retain the LEASE house style. As with existing publications, the new leaflets will go beyond the original ODPM simple guide to the legislation and include its practical application. LEASE will enter into a contract with ODPM's present distribution agency, maintaining existing procedures for public and other agencies' access to the publications. We are sensible of the trust shown by the Department in LEASE by this delegation.
Social Sector Working Party
LEASE will reconstitute the previous Public Sector group to provide a forum for discussion of the issues peculiar to the social sector leaseholder, where the landlord is a local housing authority or housing association.
Mediation
During 2005 LEASE will commence operation of a mediation scheme for all residential leasehold disputes. This will seek to resolve disputes at an early stage sufficient to avoid escalation to a point requiring application to the Leasehold Valuation Tribunal or court. Staff will be trained to full CEDR qualification standard and the scheme will operate entirely in-house. Clients of LEASE will be offered access to the scheme, at the discretion of the adviser dealing with the case, and it will open to outside applicants. This will be a significant addition to LEASE services.
Annual Conference
We followed up our 2003 Conference on the 2002 Act with a more general event in May 2004 and this proved a success with more than 250 delegates attending. The LEASE Conference is clearly valued as a forum for discussion of relevant issues by all the professionals operating in the leasehold and commonhold sector and the Third Annual Conference took place on 18th May 2005.
6.3 ENDPB status for LEASE
During the year the Government took the decision that LEASE should become an Executive Non-Departmental Public Body, although publication of the report formally confirming the status was delayed into the 2005-6 year by the General Election. In a letter to the Chairman announcing the decision, ODPM said: 'This comes about as a result of a Government-wide review by the Cabinet office of public bodies, acting on recommendations by the Public Administration Select Committee in 2003. The aims of the review have been to identify bodies which ought to be classified as public bodies for the sake of transparency, assess whether their existing governance structures need changing and consider additions to the remit of the Officer for the Commissioner for Public Appointments. LEASE is one of the bodies identified.'
It is anticipated that the full ENDPB status will be with effect from 1st April 2006 and there will be substantial administrative work necessitated during the coming year for both LEASE and ODPM staff in the reappointment of the Board and the establishment of the relevant governance procedures and protocols.
There is no doubt that the proposed ENDPB status represents a major vote of confidence in LEASE by the Government and a significant endorsement of our role and past work.
6.4 LEASE remains committed to the provision of a high-quality legal advice service, free to its users. We remain grateful to our three funding agencies, the ODPM, DCA and the Welsh Assembly Government for their continuing support.
7. Income and expenditure acount
| 31.3.05 | 31.3.04
| Income: | £ | £ | £ | £
| ODPM | 741,808 | 586,000
| National Assembly for Wales | 5,800 | 5,800
| Department of Constitutional Affairs | 33,554 | 18,000
| 781,162 | 609,800
| Expenditure:
| Staff costs | 436,154 | 415,230
| Rents, rates, heat, light | 108,102 | 92,712
| Post, telephone & stationery | 24,323 | 18,763
| Travel & subsistence | 1,127 | 1,945
| Printing | 13,197 | 32,499
| Other expenditure | 42,627 | 48,027
| Auditors' remuneration | 2,000 | 1,800
| Fixtures & fittings | - | 8,545
| Computer equipment | 4,727 | 3,150
| 632,257 | 622,671
| Excess of income over expenditure/
expenditure over income | 148,905 | (12,871)
| |
| 31.3.05 | 31.3.04
| £ | £
| Fixed assets:
| Tangible assets | 9,454 | -
| Investments | 1 | 1
| 9,455 | 1
| Current assets:
| Debtors | 21,367 | 21,443
| Cash at bank | 134,284 | 4,103
| 155,651 | 25,546
| Creditors:
| Amounts falling due
within one year | (5,835) | (15,181)
| Net current assets | 149,816 | 10,365
| 159,271 | 10,366
| Reserves: | 159,271 | 10,366
| Profit and loss account | 159,271 | 10,366
| |
This information is extracted from the full accounts audited by Hodgson Hickie, copies of which can be obtained from LEASE, 31 Worship Street, London EC2A 2DX.