Brighton Flat Owners Face £55,000 Bill After Freehold Loss Due to Agent Negligence
A group of flat owners in Brighton have been left facing a hefty £55,000 bill after losing the freehold to their building due to what they describe as poor practice by their property agents. The neighbours are now calling for stricter regulation of property agents to prevent similar situations from happening to others.
The Discovery and its Impact
Stuart Martin, a flat owner in the building, became concerned about the quality of repairs shortly after purchasing his flat two and a half years ago. He, along with nine other flat owners, were directors of the private limited company established to manage the building and its freehold. A managing agent was hired as the company secretary.
However, Mr. Martin discovered that the company had been dissolved in 2016 due to repeatedly failing to file accounts with Companies House. This meant they no longer owned the building and were without building insurance or a fire alarm contract. "I felt like I've been completely ripped off," he stated, describing the difficult situation of informing the other residents.
The Financial Burden
Following the discovery, the flat owners were required to collectively pay £55,000 – £5,000 each – plus solicitor costs and legal fees to buy back the freehold. This proved to be a significant burden for many. "People didn't have that money, they were really distraught," Mr. Martin explained. "Some of them had to borrow money from family, some of them had to take out personal loans."
Another flat owner, Julian Clark, who has owned his flat for 18 years, also stated he was unaware the company had been dissolved. He described the situation as "stressful" and "very expensive." The residents are currently attempting to recover some of the costs from the former managing agent, but have made little progress.
Calls for Stricter Regulation
The Brighton residents are now advocating for urgent implementation of stricter regulations for property agents. Daniel Stern, head of property litigation at Slater Heelis solicitors, emphasized the vulnerability of property owners to exploitation in the absence of robust regulation. He stated, "Anything which affects one's property which isn't regulated is at serious risk of being misused or abused by individuals in the marketplace who think this is an easy way to make money and they don't actually have to honour their duty of care to the residents."
Government Response and Future Legislation
The government has assured its commitment to introducing stronger legislation to hold managing agents accountable. The Managing Agents Regulation Bill, introduced in Parliament in July, proposes mandatory professional qualifications for managing agents, a code of conduct, and registration with a government-approved redress scheme for independent complaint handling. The Leasehold and Freehold Reform Act 2024, while already law, is yet to be enforced. It aims to strengthen leaseholders’ rights by making it easier and cheaper to extend leases or buy freeholds and banning new leasehold properties.
