Written Evidence to Parliament: The Enforcement Gap in Leasehold Reform

By David Wood · Submitted April 2026

Pre-legislative scrutiny of the draft Commonhold and Leasehold Reform Bill. Submitted by David Wood, Chair of a recognised residents' association ("the Association") within the meaning of section 29 of the Landlord and Tenant Act 1985.

Summary

This submission argues that the draft Bill, while welcome in principle, does not address the most acute problem facing existing shared ownership leaseholders in mixed-tenure social housing buildings: the complete absence of effective enforcement of existing statutory rights. Sections 21 and 22 of the Landlord and Tenant Act 1985 already give leaseholders the right to service charge information. Breach is already a criminal offence. In practice, the criminal remedy is inaccessible, the civil remedy has been judicially removed, and the only realistic recourse is the First-tier Tribunal: a slow, expensive, individual process with no systemic effect on landlord behaviour. The Bill must address enforcement, not merely create further rights that will fail in the same way.

Four recommendations are made: (1) create a meaningful civil remedy for breach of sections 21 and 22 with proportionate financial penalties; (2) place a duty on the Regulator of Social Housing to monitor and report on section 21/22 compliance across registered providers; (3) address the managing agent accountability gap by requiring clear statutory allocation of disclosure responsibility; and (4) establish a statutory task force to ensure the Bill's protections extend equally to shared ownership leaseholders in mixed-tenure buildings.

About the submitter

This submission is made by David Wood, Chair of a recognised residents' association within the meaning of section 29 of the Landlord and Tenant Act 1985. The Association represents leaseholders at a mixed-tenure development in Aldgate, East London, comprising 66 flats: 23 shared ownership leasehold properties and 43 social housing properties managed by Peabody Trust.

The Association is the lead applicant in live First-tier Tribunal proceedings against Peabody Trust (intermediate landlord) and FirstPort Limited (managing agent). FirstPort gave evidence to this Committee on 3 February 2026. This submission draws directly on the documented experience of that live case.

The case in brief: what existing rights look like in practice

The Association's first statutory request under section 21 of the Landlord and Tenant Act 1985 was made on 2 October 2023. The statutory deadline for compliance was 2 November 2023. Documents in purported compliance were not delivered until 16 January 2026, over 27 months later.

Peabody Trust's own consultant, commissioned by Peabody's Chief Operating Officer, formally concluded in November 2025 that Peabody had not fulfilled its obligations under sections 21 and 22 for three consecutive years, that the disclosure was out of time and uncertified, and that inaccurate statements had been made to the Housing Ombudsman, a Member of Parliament, and the Association. That finding was made on Peabody's own headed paper.

The documents eventually delivered are materially incomplete. The Association's reconciliation analysis demonstrates that over half of total campus expenditure for the 2022/23 year has no invoice corroboration in the material provided.

Analysis of the 2025/26 service charge demands reveals significant and unexplained anomalies across multiple flats, including demands on smaller properties that substantially exceed those on larger properties, and year-on-year changes that bear no consistent relationship to the overall block-level movement. The apportionment schedule that would explain these figures has been formally requested three times since November 2023 and has not been produced.

The Association has been compelled to fund and conduct its own Tribunal proceedings at significant personal cost. The case has consumed over two and a half years and remains unresolved. This is what existing statutory rights look like in practice.

The core problem: an enforcement gap that no amount of new rights will fix

The draft Bill proposes new rights for leaseholders. The Association supports the direction of travel. However, the Committee should be aware that the rights leaseholders already have, under sections 21 and 22 of the 1985 Act, have proved entirely unenforceable in practice. Unless the Bill addresses the enforcement gap, the new rights it creates will fail in the same way.

Section 25 of the 1985 Act makes non-compliance with sections 21 and 22 a criminal offence, carrying a maximum fine of £2,500. Housing associations are explicitly not exempt from prosecution. However, no publicly accessible record exists of a housing association being successfully prosecuted under this provision. The Leasehold Knowledge Partnership, which monitors this area closely, describes section 25 as "a little used and relatively ineffectual stick."

The reason section 25 is never used is structural. The local housing authority has only a discretionary power to bring proceedings and in practice rarely does so. The alternative is a private prosecution by the leaseholder, an expensive and technically demanding process with a six-month limitation period. In many cases, by the time a leaseholder has exhausted the landlord's complaints process and understood the full picture, the six-month window has closed. The law creates a criminal offence but designs the enforcement mechanism so that by the time the victim understands what has happened, prosecution is time-barred.

The absence of criminal enforcement would be manageable if a civil remedy existed. It does not. In Morshead Mansions Ltd v Di Marco [2014] EWCA Civ 96, the Court of Appeal held that courts cannot grant injunctions requiring landlords to comply with sections 21 and 22, because Parliament has already specified the consequences of breach, criminal prosecution. Courts and the criminal route each point to the other. The result is a complete enforcement vacuum.

The only realistic remedy for a leaseholder whose landlord refuses to comply with sections 21 and 22 is a First-tier Tribunal application under section 27A. Cases typically take 6 to 12 months from submission to final decision. The leaseholder must fund and conduct their own proceedings. The landlord, by contrast, may fund its defence through the service charge, meaning leaseholders collectively pay for the landlord to resist their own challenge. A section 20C application can address this but requires a separate application and a Tribunal willing to make the order. The FTT can deliver a determination on a single building. It cannot impose any wider obligation on the landlord, cannot sanction the landlord for sector-wide behaviour, and cannot order any remedy beyond the specific charges in dispute.

A landlord managing tens of thousands of homes who knows that the worst realistic outcome of breaching section 21 is a single FTT determination on a single building, with no criminal sanction, no regulatory consequence, and legal costs potentially recoverable through the service charge, has every rational incentive to breach. The system does not merely fail to deter non-compliance. It actively rewards it.

The mixed-tenure regulatory gap

The building illustrates a structural problem that the Bill does not address. Of its 66 flats, 23 are held on shared ownership leases and 43 are occupied by social tenants of Peabody Trust. The building operates under a single management structure with a single service charge cost pool.

In this structure, the Association's leaseholders fall between every regulatory framework simultaneously. The Regulator of Social Housing has jurisdiction over the social housing element but not the leasehold element. The Housing Ombudsman handles complaints but not service charge reasonableness. The First-tier Tribunal handles service charge reasonableness but not governance. Peabody sits across all three regulatory domains and is fully accountable to none of them for the failures that affect both tenure groups at building level.

The social tenants in the building pay service charges that are separately itemised in their rent increase letters and funded in whole or in part through Universal Credit and housing benefit. The Association's reconciliation analysis demonstrates that over half of the service charge expenditure for 2022/23 cannot be evidenced by invoice. Public funds are being used to pay service charges that the landlord cannot evidence. This is not merely a private dispute between leaseholders and their landlord. It is a public expenditure concern.

The managing agent accountability gap

FirstPort Limited gave evidence to this Committee on 3 February 2026 and has since corresponded with the Chair. FirstPort is a respondent in the Association's Tribunal proceedings. The Committee has therefore heard directly from one of the parties whose conduct is at issue.

Throughout the period covered by these proceedings, Peabody has attributed failures to FirstPort and FirstPort has redirected the Association back to Peabody. This circular accountability structure, where the landlord blames the managing agent and the managing agent redirects to the landlord, is a structural problem the Bill does not address. The statutory disclosure obligations under sections 21 and 22 are imposed on the landlord, but in practice the managing agent holds the documents and the landlord relies on the agent's systems. When those systems fail, neither party accepts responsibility. The Bill should require a clear statutory allocation of disclosure responsibility between landlord and managing agent, enforceable against both.

Recommendations

1. Create a meaningful civil remedy for breach of sections 21 and 22. The Bill should provide leaseholders with a direct right of action, with financial penalties set at a level that deters a large registered provider. A maximum fine of £2,500 is not a deterrent for a housing association with a multi-billion pound balance sheet. The penalty should be calculated by reference to the service charge income from the affected building, or set at a minimum of £25,000 per year of non-compliance.
2. Place a statutory duty on the Regulator of Social Housing to monitor and report annually on section 21/22 compliance. The RSH already collects performance data. Adding a disclosure compliance metric would cost the sector little and give the regulator, Parliament and leaseholders visibility of a problem that is currently invisible.
3. Address the managing agent accountability gap by imposing joint and several liability on managing agents for statutory disclosure failures, or by requiring a publicly accessible contractual allocation of disclosure responsibility that leaseholders can rely upon.
4. Establish a statutory task force to ensure the Bill's protections extend equally to existing shared ownership leaseholders in mixed-tenure buildings, convening shared ownership and leasehold legal expertise and lived experience to identify and close the gaps before the Bill is introduced.

Conclusion

The Association supports the Government's intention to reform leasehold tenure. The draft Bill is a welcome step. But reform of tenure is not the same as reform of enforcement, and it is enforcement that fails leaseholders in practice.

The Association has spent over two and a half years exercising rights that already exist in law, against a landlord that has admitted on its own headed paper that it failed to comply with those rights for three consecutive years, whose managing agent has appeared before this Committee, and against whom live Tribunal proceedings are ongoing. If the Bill is introduced without addressing the enforcement gap, the leaseholders who come after the Association will find themselves in the same position: well-protected on paper, and entirely without remedy in practice.

Annex: key facts