The threat of forfeiture – ‘confiscation without compensation’ is inherent to leasehold, because the leaseholder is not the owner. A freeholder under the terms of the lease has a right to threaten leaseholders with confiscation (‘forfeiture’) of their flats for breaking the undertakings in the lease (‘covenants’).
A freeholder also has the right under the terms of the lease to threaten leaseholders with confiscation for money owed as ‘rent’.
‘Forfeiture is state sanctioned theft. I have no problem with someone being required to pay a debt that they owe under an agreement into which they have freely entered. However I have enormous problems with the fact that the law allows landlords to take vastly greater sums than are owed them and turn people out of their homes’. Andrew Selous MP HL Deb. 24/1/02, Standing Com. D c.175
Repossession by a mortgage company repays the leaseholder after taking the amount owed, but a freeholder can confiscate a whole home with no compensation – an unavoidable result of the leasehold system.
In the Commons debate on the Leasehold Reform Act in March 2002 an amendment which would have banned forfeiture, was lost. Only forty-eight MP’s from all parties voted to abolish forfeiture. Two hundred and seventy-eight MP’s voted to keep it. Why? Hansard HC Deb. 13/3/02, Vol. 381 c.971
‘Reform of the Leasehold laws has been discussed for many years. I therefore find it hard to understand why, with only 10 minutes or so to go before the last stage of voting on the Bill, insufficient thought has been given to including in it provisions for the abolition of forfeiture, and for compensation’ David Lepper MP Hansard HC Deb. 13/3/02, Vol.381 c.968
The Leasehold System keeps the Great Landowners’ Estates intact. It is very rewarding for property developers, as well as lawyers, barristers and surveyors, and other professional advisors. Those for whom leasehold is most rewarding, also have the power to ensure it continues through professional associations and pressure groups.
The United Nations Commentary on Forced Evictions and Human Rights begins with this:
‘On the first day they came, they spoke to us of progress… they measured our lands, and we said nothing… On the second day they came, they invaded our houses… and we said nothing… And because we said nothing, we will never be able to do anything. Are we going to let this happen again?’
‘ Forced Evictions and Human Rights’ The centre for Human Rights (UN publication, ISSN 1014-5567, Geneva 1991)
Security of Tenure – A Legal Entitlement
‘General Comment No. 4, 1991 of the Committee on Economic Social and Cultural Rights on the Right to Adequate Housing clearly places Security of Tenure in the category of Legal Entitlements, arising under the International Covenant on Economic Social and Cultural Rights.’ (UN publication, as above, p.20)
Requirement for Compensation
‘Few Governments will openly defend the legitimacy of an eviction without any form of compensation’ (UN publication, as above, p.29)
Legal protection against harassment and other threats
‘Notwithstanding the type of tenure, all persons should possess a degree of security of tenure which guarantees legal protection against forced eviction, harassment and other threats. States parties should consequently take immediate measures aimed at conferring legal security of tenure upon those persons and households currently lacking such protection, in genuine consultation with affected persons and groups’ (UN publication, as above, p.36)