Description
Summary
The Leasehold and Freeholder Reform Act 2024 marks a major shift in property law in England and Wales, aiming to phase out leasehold ownership for new dwellings in favour of commonhold. While parts of the Act are in force, much depends on future regulation, creating uncertainty. Key areas include lease management reform, ground rent caps, lease extension changes, and the introduction of commonhold for flats and estates.
Key Bullet Points
- End of New Leasehold Houses: Transition to commonhold for new builds; existing leaseholds remain complex to reform.
- Ground Rent Reform: New ground rents banned; proposed 0.1% cap for existing leases under judicial review.
- Lease Extensions: Standardised terms (e.g., 990 years), simplified processes, but caution urged due to valuation risks.
- Estate Rent Charges: Freehold owners face risks of lease-like controls; legal reforms are underway to prevent abuse.
- Commonhold Reintroduction: Aims to replace long leases, but faces obstacles from lenders, developers, and legacy systems.
- Tenant Rights Expanded: Increased power for tenants in mixed-use buildings; limits on landlord voting rights.
- Tribunal Role: Broadened powers to assess service charge reasonableness and enforce compliance.
Learning Objectives
- Understand the implications of transitioning from leasehold to commonhold ownership, including potential legal and financial complexities.
- Identify the key reforms around lease extensions, ground rents, and estate rent charges, and how they affect homeowners and developers.
- Evaluate the risks and legal obligations for both leaseholders and freeholders under the new legislation and pending reforms.
