David Goldberg, CEO, POD Management, explains why leasehold reform must go further to improve the condition of residential buildings
Leasehold reform represents one of the most significant changes to residential property ownership in a generation. Much of the debate has understandably focused on strengthening leaseholder rights, increasing transparency and improving accountability across the sector.
These reforms are both necessary and welcome. Greater openness and stronger consumer protections should be fundamental principles of any modern housing system.
However, as the conversation continues to evolve, there is a risk that one equally important issue is being overlooked: the long-term stewardship of the buildings themselves.
After more than 25 years in the residential property management sector, I have become increasingly convinced that good governance alone is not enough. A residential building can be transparent, democratically run and well managed, yet still become underfunded and steadily deteriorate if there is nobody accountable for long-term planning.
The next phase of leasehold reform should therefore ask a different question. Not simply who controls a building today, but who is ensuring it remains safe, resilient and financially sustainable for the decades ahead.
Residential buildings need stewardship
A residential building is not a short-term consumer product. It is a complex asset with a lifespan measured in decades. Roofs, lifts, façades, fire safety systems, mechanical and electrical services, drainage and communal infrastructure all require regular inspection, maintenance and eventual replacement. These are predictable lifecycle costs, yet too often decisions are shaped by short-term affordability rather than long-term asset management.
This is not a criticism of leaseholders. It reflects the reality of collective ownership. Individual homeowners are understandably focused on the affordability of today’s service charge and the value of their own property. Stewardship, however, requires decisions that protect the building for decades, often beyond the ownership of any one resident.
The question we should therefore be asking is not simply who controls a building today, but who is taking responsibility for its condition ten, twenty or thirty years from now.
International experience offers valuable lessons
The challenge of long-term stewardship is not unique to the UK’s leasehold system. Countries with comparable apartment ownership models have encountered many of the same issues and increasingly recognised that transparency and voting rights alone do not guarantee good long-term outcomes.
In the Netherlands, owners’ associations are required to build reserve funds for major maintenance through long-term maintenance planning or minimum annual contributions linked to the building’s rebuild value.
Ontario, Canada requires condominium corporations to maintain reserve funds supported by independent reserve fund studies looking at future maintenance requirements over at least thirty years.
Similarly, New South Wales in Australia requires owners corporations to establish capital works funds alongside forward-looking maintenance plans to ensure major repairs and replacement costs are anticipated rather than deferred.
While each system differs, the direction of travel is remarkably consistent. Governments have recognised that protecting residential buildings requires structured capital planning alongside good governance.
Transparency does not repair a roof
Transparency remains fundamental to good management. Residents should receive clear information, understand how decisions are made and be able to hold those responsible to account. However, transparency alone does not replace a lift, repair a roof or fund essential fire safety works.
A building can have open accounts, regular meetings, engaged residents and a capable managing agent, yet still fail to make the difficult investment decisions needed to protect the asset over the long term.
Deferred maintenance rarely reduces costs. More often, it transfers them to future owners or allows manageable repairs to become significantly larger financial and safety challenges. Good governance must therefore be accompanied by long-term planning and the willingness to invest before problems become crises. That starts with developers and must continue regardless of whether under freehold, resident management company or commonhold ownership.
Every building needs a pension
Perhaps the simplest way to explain reserve funding is this: every building needs a pension. Nobody expects to retire comfortably without setting money aside throughout their working life. Yet many residential buildings are expected to last for decades with little meaningful provision for predictable future expenditure.
When substantial repair bills eventually arrive, they are often viewed as unexpected. In reality, most major maintenance requirements are entirely foreseeable. The issue is not whether those costs will arise, but whether sufficient provision has been made before they do.
Reserve funds should not be viewed as an optional extra, but a fundamental component of responsible asset stewardship.
Stewardship Is a shared responsibility
The government has an important role to play, but it cannot deliver better building stewardship alone. Lenders, insurers, managing agents, freeholders and resident management companies all have a role in encouraging long-term thinking.
Managing agents, in particular, should be recognised as professional advisers, helping clients make informed decisions that balance affordability with the long-term interests of the building. Equally, lenders and insurers have a vested interest in the quality, resilience and future condition of the assets that underpin their investments and policies.
The next phase of leasehold reform should therefore move beyond questions of ownership and control. It should also encourage lifecycle planning, accountability and governance that rewards responsible stewardship.
Strong rights, transparency and regulation remain essential. But they must sit alongside responsibility. Ultimately, a building will not reflect the number of consultations held or the amount of control transferred. It will reflect the quality of the decisions made to maintain, invest in and protect it over time.
The post The missing piece of leasehold reform: Why stewardship must shape the next phase of housing policy appeared first on Planning, Building & Construction Today.
