The Leasehold and Freehold Reform Act, which received Royal Assent in May 2024, aims to improve the rights and protections of leaseholders in the UK.
Aims of the Act
- Ban the grant of long residential leases of houses unless permitted.
- Amend the law relating to leasehold enfranchisement and lease extensions of houses and flats.
- Increase the rights of residential leaseholders regarding service charges, insurance and so on.
- Regulate demands of historic rent charges.
- Increase the period of a lease extension from 90 years to 990 years.
- Reduce the price payable for a lease extension by removing marriage value.
A summary of the changes
The removal of the marriage value
This refers to the increase in property value that occurs when the freehold and leasehold interests of a property are combined into a single ownership. This makes it more expensive to extend leases when they’re close to expiry.
Removal of the requirement to own a property for 2 years before making a claim
Previously, a lease would need to be owned for two years before a claim to be made to claim a lease extension or to buy the freehold immediately upon acquiring a lease.
- Under the act, qualifying tenants of houses will be eligible to claim a lease extension or to buy the freehold of their house as soon as they have acquired their lease.
- This is also applicable to qualifying tenants of flats.
Making it easier and quicker to buy and sell leasehold property
A maximum time and fee for the provision of information required to make a sale to a leaseholder by their freeholder will be set.
Service Charges
- All leaseholders will receive better transparency over the costs they are being charged by their freeholder or managing agent and can raise a challenge if they are unreasonable.
- The process of challenging their claims will be simplified for tenants.
- Leaseholders are no longer presumed to bear the legal costs.
Replacement of building insurance with transparent admin fees
This will stop leaseholders from being charged excessively in addition to their premiums.
Redress Schemes
A redress scheme is a scheme which allows for a complaint to be resolved without the need for legal action.
The act will require a freeholder who manages their property to belong to a redress scheme so leaseholders can challenge poor practice.
Freeholder redress rights
Freeholders will be given the same rights of redress as leaseholders.
For further information on the Leasehold and Reform Act, please email us at lawyers@bondadams.com or call 0116 285 8080 and one of our team will be happy to assist you.
Contact us
Bond Adams Solicitors
Richmond House
94 London Road
LEICESTER
LE2 0QS
0116 285 8080
lawyers@bondadams.com
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