'We had to pay £55,000 to buy back our homes'

Julian Clark, Stuart Martin and their neighbours paid £55,000 to buy back the freehold of their building

A group of flat owners have called for regulation of property agents to be brought in more quickly after what they said was poor practice led to them losing their freehold and cost them £55,000 to buy it back.

Freehold is a property owner's share of the land and building which their flat occupies.

The Brighton neighbours said they also discovered their building insurance and fire alarm contracts had lapsed.

The government says it is committed to holding managing agents to account with stronger regulation.

When Stuart Martin bought his flat in Brighton two and a half years ago he became concerned about the quality of repairs being done to the building.

He and nine other flat owners were directors of the private limited company established to manage the building and its freehold, with a managing agent hired to be the company secretary.

But Stuart discovered the company had in fact been dissolved in 2016, meaning they no longer owned the building, and they had no insurance or fire alarm contract.

He said: "I felt like I've been completely ripped off. Then having to tell everyone else in the building, it was a really not a nice situation for me."

If a company repeatedly fails to file accounts to Companies House three times in a row it is dissolved and any assets, such as a freehold, are returned to the Crown.

They had to pay £5,000 each, plus solicitor costs and legal fees, to buy back the freehold between them.

He said: "People didn't have that money, they were really distraught. Some of them had to borrow money from family, some of them had to take out personal loans."

'Stressful and expensive'

Julian Clark has owned his flat for 18 years and said he did not know that the company, of which he was a director, had been dissolved.

He said: "It's been stressful, it's been very expensive. We are all trying to claim some money back from the old managing agent but we haven't got very far."

Daniel Stern, head of property litigation at Slater Heelis solicitors, said without regulation property owners were vulnerable to being exploited.

He said: "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."

A Managing Agents Regulation Bill was introduced in Parliament in July.

The new law would include mandatory professional qualifications for managing agents, a code of conduct and a new requirement to be registered with a government approved redress scheme to handle complaints independently.

In a statement the Ministry for Housing, Communities and Local Government said: "We're also giving people greater protections over their homes by bringing in stronger powers from the Leasehold and Freehold Reform Act."

The Leasehold and Freehold Reform Act 2024 became law last year but has yet to be brought into force.

The act aims to strengthen leaseholders' rights by making it easier and cheaper to extend leases or buy freeholds and banning new leasehold properties.