The Latest Developments for Leasehold Reform

On Friday 24 May 2024, the eagerly awaited Leasehold and Freehold Reform Act 2024 received Royal Assent on the last day of the 'wash up' period before the UK's General Election. This is the period following a call for a general election during which Parliament will put some agreed bills through the legislative process to avoid losing progress made.

The Labour Government has committed to 'act quickly to provide homeowners with greater rights, powers and protections over their homes by implementing the provisions of the Leasehold and Freehold Reform Act 2024'. However, there have been no further announcements about the implementation timetable and due to the complexity of the legislation it may be implemented in stages.

When the Act comes into force it will introduce some beneficial changes for leaseholders, including but not limited to:

Removing the two-year ownership requirement for lease extension claims;
Increasing the standard lease extension to 990 years;
A new valuation method for lease extension and enfranchisement claims including the abolition of “marriage value”; and
Making lease extension and enfranchisement claims cheaper with each party paying their own costs in most cases.
Improve the transparency of:
- Service charges and give leaseholders a new right to request information about service charges and the management of their building.
- Administration charges and building insurance commissions.
Extend access to redress schemes for leaseholders where the freeholder manages the property directly.

Furthermore, the Government announced in the King's Speech 2024 that they are committed to publishing a draft Leasehold and Commonhold Reform Bill. The bill would:

Enact remaining Law Commission recommendations to strengthen leaseholder's rights to extend their leases.
Reinvigorate the commonhold tenure modernising the legal framework.
Regulate ground rents for existing leaseholders.
Strengthen the rights of freehold homeowners on private or mixed-tenure residential estates.
Remove the threat of forfeiture as a means of ensuring compliance with a lease agreement.

We will continue to monitor the changes, when they are expected to take effect and what this means for leaseholders wanting to make a lease extension or enfranchisement claim.

If you have any queries or would like to discuss the changes, please contact Laura.Poulloura@lbmw.com