Rayner and Gove attack ‘vested interests’ over leasehold reform
2 months ago | 3 comments
Leaseholders left out as bill excludes action on embedded managers
12:01 AM, 6th May 2026, 1 week ago
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The government has confirmed that its draft Commonhold and Leasehold Reform Bill does not currently include measures to tackle so-called “embedded” management companies.
In a written parliamentary question, Labour MP Neil Duncan-Jordan raised concerns about firms that are effectively built into developments by freeholders or developers, often at the point the building is constructed, meaning leaseholders can be automatically tied into their services with limited ability to switch provider or regain control.
The news comes as the government announced that ground rents in England and Wales will be capped at £250 a year for leaseholders.
No provisions relating to embedded management companies
In a written question, Mr Jordan asked: “Will the government ensure the Commonhold and Leasehold Reform Bill includes retrospective powers for leaseholders to remove ’embedded managers,’ without no-fault litigation where historic structural neglect is proven.”
In response, housing minister Matthew Pennycook said: “It is unacceptable for a managing agent to refuse to vacate a site when it loses a contract to another agent. Landlords may seek legal advice on possible courses of action when such circumstances arise.
“These may include making a formal complaint to the relevant redress scheme or seeking an injunction in the County Court. Leaseholders, including resident directors, can also seek guidance and free initial legal advice from the government-funded Leasehold Advisory Service (LEASE).
“The previous government’s Leasehold and Freehold Reform Act 2024 contains no provisions designed to prevent managing agents using subsidiary, sister, or associated organisations to deliver services.
“The draft Commonhold and Leasehold Reform Bill contains no provisions relating to embedded management companies.
“We await the conclusions of the pre-legislative scrutiny of the draft Bill being undertaken by the Housing, Communities and Local Government Select Committee and will review the feedback received before publishing a substantive Commonhold and Leasehold Reform Bill.”
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Member Since October 2022 - Comments: 415
9:56 AM, 6th May 2026, About 1 week ago
This article does not properly define “embedded “ management company.
I understand an embedded management company is a Residents Management company as Right to Manage (RTM) or (RMC ) or freehold owning (FRMC) incorporated companies registered at Companies House as share of freehold, owned and run by leaseholders and also registered in leaseholders Titles at HMLR and named party in leaseholders lease.
HMLR state that the company name can be changed but NOT company registered number (CRN) for tax purposes.
So as Directors hold fiduciary to work in best interest of Leaseholders the beneficiaries where the freehold is owned by the Man Co. the assets are owned by the Leaseholders in role of shareholders then a change of MA by a vote.
So if “embedded “ means something else then this should be clearly defined.
Member Since February 2025 - Comments: 74
10:48 PM, 7th May 2026, About 7 days ago
I think they mean where the managing agents are named in the unit leases as the management company with responsibility and powers for delivering the services and collecting the service charge. The managing agents are not a resident management company and the shareholders/members and directors are not the unit leaseholders. I would have thought, though haven’t checked, that the RTM regime would be an option for getting out of that situation, but that can of course be difficult to coordinate as well as requiring legal fees. So entrenched management companies are the same situation from the unit owners’ viewpoint as the landlord retaining control over services (whether or not the landlord appoints an agent of their choice)?