Leasehold and Freehold Reform Act 2024: provisions removing two-year qualifying criteria for certain lease extensions and freehold purchases in force
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The Government has published the Leasehold and Freehold Reform Act 2024 (Commencement No. 2 and Transitional Provision) Regulations 2025, which came into force on 31 January 2025.
They bring into force Section 27 of the Leasehold and Freehold Reform Act 2024 ("LAFRA 2024"). This means that it is no longer necessary for:
- the tenant of a leasehold house looking to purchase the freehold or extend their lease under the Leasehold Reform Act 1967 ("LRA 1967") to have owned their house for the last two years; or
- the tenant of a leasehold flat seeking to extend their lease under the Leasehold Reform, Housing and Urban Development Act 1993 ("LRHUDA 1993") to have owned their flat for two years before making a claim.
Section 27 also abolishes some ancillary provisions regarding the service of notices by personal representatives where the tenant has died. The previous situation was that a personal representative could serve a notice of claim in the deceased tenant’s name within the first two years of the tenant’s death and then in their own name after two years. Under LAFRA 2024, personal representatives remain able to make claims in the deceased tenant’s name, provided the tenant is registered at the Land Registry as the owner of the property.
Some minor amendments are also made to the prescribed form notices of claim to acquire the freehold or an extended lease of a house under the LRA 1967.
Impact
The Regulations only bring into force Section 27 of LAFRA 2024. So, whilst the qualifying criteria is removed, all other mechanics of lease extensions and freehold purchases of houses and flats and acquisition of the right to manage remain the same. Other provisions of LAFRA 2024 concerning valuation, increasing the qualifying threshold for right to manage and enfranchisement to 50% non-residential parts, the ban on the creation of new leasehold houses and increasing regulation of service charges and estate management charges have not been brought into force and there is no fixed date set by the Government to implement the remainder of LAFRA 2024. This may depend on the outcome of judicial review proceedings being brought against the Government by various landlords in respect of some of the provisions of LAFRA 2024.
In order to make a claim, the tenant no longer needs to have owned the property for two years but will need to be the registered owner in order to commence a claim. There has been some debate since the Regulations were published about whether the delays at the Land Registry affect the removal of the two-year qualifying period of ownership. According to the latest Land Registry’s processing times published on 23 January 2025, 26.3% of changes to existing registered titles are processed in a period exceeding 3 months. For complex titles, 23.2% of changes are registered in 12 months, 51.3% within 18 months and 7% in over 18 months. This may mean that there remains a need for a seller to assign the benefit of a notice of claim to the buyer with registration of the transfer at the Land Registry in order that the claim can progress within the time it takes for the buyer to become the registered owner. Tenants may need to ensure that they discuss their particular situation with their professional advisers and consider whether there needs to be any assignment of the benefit of a notice of claim in their case.
Landlords will take note of the implementation of this aspect of LAFRA 2024 and will be waiting for further news from the Government on plans to bring into force other provisions of LAFRA 2024. They will also await the Government’s White Paper on Commonhold which is due later in 2025. These Regulations are the start of a series of changes intended to be brought into force by the Government which will radically alter the leasehold landscape.
We are tracking developments on our Essential Residential hub and timeline: Changing landscapes in residential leasehold. Please contact Lauren Fraser, Laura Bushaway or your usual Charles Russell Speechlys contact if you have any queries.
The two-year rule, introduced under the Leasehold Reform, Housing and Urban Development Act 1993, required leaseholders to own their property for at least two years before initiating enfranchisement or lease extension. Originally stemming from pre-1993 Act rules, the requirement persisted despite reforms like the Commonhold and Leasehold Reform Act 2002, which abolished residence tests for enfranchisement.
