Leasehold Reform
The Leasehold Reform Act will bring in changes to the management of long leases. The Act received Royal Ascent in May 2024 however, most of the changes it contains are not expected to come into effect until 2025/26, as secondary legislation needs to be drafted first. The government also intends to consult further on some of the Act’s provisions to ensure that changes implemented do not have a detrimental impact on leaseholders.
The new Act includes some significant changes which will benefit leaseholders and below are some of the key changes:
- Increasing the standard lease extension from 90 to 990 years
- Abolishing ‘marriage value’, which is the premium that is payable by a leaseholder who wants to extend their lease when it has less than an 80-year term.
- Removing the requirement for a new leaseholder to have owned their flat for two years before they can extend their lease. The government announced on 21 November that they will bring forward this provision from January 2025 however, the exact date is yet to be confirmed.
- Setting time limits for landlords to provide information when a leaseholder buys or sells their home and limiting the fee that landlords can charge leaseholders for sales packs when selling their flat.
- Introduction of a standardised format for service charge demands that can be more easily scrutinised and challenged and annual service charge reports to accompany a service charge account statement.
- Removing the presumption that leaseholder’s pay their landlord’s legal costs when challenging service charges.
Further reform of the leasehold system the government is committed to bring to an end the leasehold system in this parliament and intends to publish a White Paper on reforms early next year with a view to publish a new Draft Leasehold and Commonhold Reform Bill in the second half of 2025.
There are some useful sources of information that can be found online including: