Along with the introduction of the new seller's packs, the government is proposing further changes to the way the housing market works, with the introduction of the 'commonhold lease'. If passed, the legislation should replace the antiquated laws which are the bane of many a flat owner across the country. But will the new measures really go far enough to solve the problems of the existing system?

Under current conditions, flat owners fall into one of two categories: Freehold, which is as close to absolute ownership of the property as you can get, or leasehold, whereby you have purchased the right to occupy the property for a given period of time, with a set of conditions attached. With a leasehold property, communal areas and the actual building both belong to the landlord. (For further information on freehold and leasehold tenure, click here)

Leasehold tenure (or ownership) brings with it a unique set of problems. It is the landlord (or freeholder) that holds all the trump cards and who can wield an often unfair level of power over the leaseholders. They get to decide expenditure on things such as maintenance and repairs, insurance, and upkeep or cleaning of the communal areas. They set the terms of the lease by which a leaseholder is afforded the right to live in the property, and they also set the ground rent which must be paid annually by all the leaseholders.

Numerous unscrupulous landlords and property management companies have made excessive demands on tenants, while others do little to fulfil their responsibilities in terms of maintenance and upkeep of the building. In some extreme cases, tenants have lost the right to live in a property they own, whilst still being required to repay the mortgage debt that they owe.

At present, it is pretty difficult - and therefore costly due to the professional expertise required - for both tenants and landlords to navigate the provisions that are required for leaseholders to obtain the freehold, with particular difficulty posed by eligibility rules and a mass of red tape. Although leaseholders have a right to purchase the freehold to a property, it is extremely easy for a freeholder to block or obstruct the acquisition. The only way to forcibly assume management of the property is to prove that the landlord is negligent of their duties.

We can certainly expect changes to arise out of the draft commonhold bill that Labour has introduced. There are three basic strands to the bill.

• There is to be a new form of ownership called commonhold, which gives groups of private owners the right to jointly take ownership of the freehold on their building and create a company to manage the maintenance of communal parts of the building.
• Improvements will be made to the process of buying the freehold, so that it becomes simpler and cheaper.
• Tenants will also be given the option to manage their building without the requirement to own the freehold.

These changes are not altogether drastic and the draft bill does not contain any major surprises. Commonhold ownership is the norm in most of Europe, the US and Australia, so the concept is certainly nothing new. The new type of tenure could potentially cover flats, houses, shops, industrial units, or any properties which are interdependent. However, it will neither be compulsory for new developments to start with commonhold status, nor will their be a requirement of existing landlords to convert to the new form of tenure.

In order to convert a property to commonhold tenure, it will still require 100% of the leaseholders, plus the agreement of the existing freeholder. The government has stopped well short of redistributing property ownership, for fear of incurring the wrath of landlords up and down the country. The government has instead proposed a number of measures to assist leaseholders in taking control of the management of their homes and to pressurise landlords into cleaning up their act:

• Leaseholders will be given the right to form a company which can take control of the management, repair and servicing of the building, without the need to own the freehold. This affords them the opportunity to independently get quotes to carry out the work, set maintenance charges and decide policy over collection of fees.
  
  
• There will be a wider eligibility for leaseholders to obtain the freehold from the landlords, with the abolition of the requirement for a leaseholder to be resident in order to vote on the matter. In other words, leaseholders who are renting their property rights will be given the same voting rights as leaseholder-occupants.
  
  
• There will be a reduction in the costs involved in obtaining the freehold, with proposals to simplify the valuation process.
  
  
• There will be greater scope to challenge the level of service charges, to justify the need for and cost of work to their building through a Leasehold Valuation Tribunal.
  
  
• Landlords will be forced to hold all monies relating to service charges in a separate, designated bank account. They will also be required to provide more information to clarify the financial management of such funds.
  
  
• There will be a provision to provide assured tenancies after a lease expires.

This legislation is due to take effect early next year, with the housing minister, Nick Raynsford assuring "good landlords have nothing to fear", if they are providing a cost effective service.

So, while the bill does not replace the existing rights of leaseholders to purchase the freehold, it does provide an alternative for a leaseholder who either doesn't want, or can't afford to purchase the freehold but who wishes to have a greater say in the management of their property. But what do the agents, landlords, tenants and those people who have been campaigning for change make of the proposals?

Supporters of the bill believe that the government has listened to both leaseholders and landlords to address the many anomalies and loopholes in the current system. Peter Haler of LEASE, the leasehold advisory service, said that the legislation is "pretty radical stuff". He continued, "they have listened to tenants and produced the goods. Criticism is borne of unrealistic expectations...Where a landlord owns a building, you can't simply wave a magic wand and transfer ownership". In a sensible statement, he concluded, "The government is not into confiscation, but what they have done is to create an alternative system." No doubt the market will choose if it is to be a successful alternative.

But this optimism is not shared by everyone. Opponents claim that the government has wasted time by simply remoulding the failures of the existing system. Ken Murray, spokesman for the campaign for the Abolition of Residential Leasehold retorted, "These measures, like its 80 predecessors in the last century, merely tinkers and fails to give leaseholders the means to win their homes". The shadow environment secretary, Archie Norman added in a scathing attack on labour that "despite the fact that the conservatories tabled a draft bill in 1996, all labour has done is produce yet another draft bill that will not make any headway". He went on to claim the proposals were nothing more than "another eye-catching initiative".

It as unrealistic for the government to introduce legislation ridding us of a complex leasehold system in one fell swoop. Landlords as owners of the buildings have rights. That's a simply immutable fact. But leaseholders also have rights - to take control of their property and rid themselves of landlords that are not fulfilling their responsibilities. With such a complex issue, that is so important ti so many interested and involved parties, the government is never going to be able to please everyone.

What they have provided is some alternative routes for people to follow in empowering themselves to control the management of their property. It may be that the requirements for landlords to provide more information about and access to their financial management records that provides the most noticeable change to the status quo. Many people still find the processes of obtaining the freehold and forming a management company to run their own affairs long winded and daunting. Freeholder and managing agent accountability is something which most leaseholders would probably settle for.

Only time will tell if people embrace the new powers available to them, or if further, more radical legislation is required to make any impact on the stress and frustration suffered by many leaseholders around the country.

For further information on this subject, please visit www.lease-advice.org