Leaseholder faces forfeit of flat over service charge row

‘Michael Gove, the Housing Secretary, will carefully consider ways to strengthen the Bill to protect leaseholders’

Flat owner Nicola Hawkins, 36, was threatened with homelessness after contesting a service charge bill nine times what she was quoted.

She bought her £215,000 one-bedroom flat in Essex in March 2022 after an estate agent’s brochure said the service charge was £600 a year. But upon moving in, she found out it was in fact £1,400 that year. Then in 2023 it was £2,800. And this year it will be £5,500.

After refusing to pay the latest bill and preparing to take her case to a tribunal, she received a letter from her managing agent, Eagerstates, telling her it had “no choice” but to apply for a possession judgment.

Leaseholders can “forfeit” leases if they do not pay their service charge – even if that is as small as £ 350 or is being disputed, according to MPs.

Matthew Pennycook, the shadow housing minister, called the practice “wholly disproportionate and horrifically draconian” in a debate over amendments to the Leasehold and Freehold Reform Bill. Rachel Maclean, the former housing minister, said forfeiture was “feudal and abusive”, and a freeholder could seize a flat worth half a million pounds and “make a windfall irrespective of the size of the contested charge”.

An amendment to get rid of forfeiture was tabled at committee stage of the Leasehold and Freehold Bill on Jan 30, but not voted into the Bill. Lee Rowley, the housing minister, said that it would be considered again in the Commons.

A government source said Ms Hawkins’ treatment is “disgraceful” and was “another powerful indictment” of the leasehold system. They added: “As the Bill progresses through Parliament, the Secretary of State [ Michael Gove] will carefully consider ways to strengthen it to protect leaseholders.

“He has been clear that we must reform the unfair and antiquated leasehold system out of existence.”

This is the second time Ms Hawkins has taken her landlord, Assethold, to the tribunal. The company is run by the Gurvits family, which also runs Eagerstates. In July 2023, Ms Hawkins won back £9,500 in service charges for her and her five neighbours who live above a shop in Romford.

Most of the refund related to building insurance fees, which the judge capped at £3,500. Documents show a £5,800 charge has been estimated for building insurance and broker fees this year. Eagerstates says it has changed brokers and cut its premiums by £1,000. When Ms Hawkins bought the property, she claims her conveyancer did not send her a management pack, which would have given her more accurate estimates on future service charges.

It was not until after her purchase, in July 2022, that National Trading Standards required estate agents to provide material information – which includes service-charge review periods.

In the past three years, 111 decisions have gone through the first-tier tribunal involving Assethold. The majority were leaseholders against the landlord, but 20 were cases filed by Assethold to recoup fees from leaseholders.

Barry Gardiner, Labour MP for Brent North, said: “The Government has the opportunity to legislate on this now. They refused the amendment at the committee stage. Perhaps their lordships will make them see sense.”

Harry Scoffin, founder of Free Leaseholders, said: “Legitimate debts can be pursued in the usual way of a money claim in the county courts.”

Eagerstates did not comment.

Nicola Hawkins’ service charges are almost as much as her mortgage