Government Solutions to Leasehold Scandal

From the beginning of complaints that escalated to the leasehold scandal, movements have been demanding government intervention in the matter. This is particular in the United Kingdom where most property ownerships still lean towards leaseholds.

The government has started to realize the gaps and the limitations of laws that can be applied to leasehold. They also have been trying to propose solutions to alleviate the existing problems of lessees and owners.

Here are some of the proposed solutions by the British government: 1. Banning of property sales on leasehold terms.

Since the problem arises mostly years after a leasehold agreement is minted, the government has been proposing to ban all property sales, especially residential properties sold in these terms. Mostly, this may bode well for new buyers but it still does not address the existing issues with existing contracts.

2. Providing an assistance scheme.

Since the leasehold scandal mostly stemmed from increasing rates, the government has proposed compensation and assistance schemes to alleviate some of the pressing problems. This idea has lost favor since the method of qualifying which party receives assistance, presents more dilemmas.

3. Putting a cap on ground rent rates.

This is something that has been most promising. In terms of putting a limit to the rates at which the ground rent rates can increase to help calm the situation. There have also been proposals of making fixed rates all throughout for ground rates but this goes against the welfare of owners. Especially so the land value is how owners profit from business, the latter is not that feasible.

With different circumstances of lessees and owners caught in the leasehold scandal, the solution from the government may take some time. Mediating issues like this entail considering both parties and addressing issues equally. It can be very tedious. At the same time, laws take some time to take effect and as these happen, existing contracts still have the same issues they have.