CoStar quotes Lauren Fraser on the proposed leasehold reforms announced in the King's Speech
King Charles III has laid out the government's plans for the year ahead in his first King's Speech as monarch, with updates of interest for commercial property relating to Energy Performance Certificates (EPCs) and flat owners at mixed-use developments.
The legislation of interest to real estate includes the government's Leasehold and Freehold Bill and the Renters (Reform) Bill.
Lauren Fraser, Senior Associate, comments:
Reform of the leasehold system has been high on the agenda in the lead up to the King’s Speech. What has published doesn’t represent a holistic review of leasehold legislation or the lease extension procedure; some of the proposals, such as banning leasehold houses, were announced four years ago and cannot be said to be news.
However, the Government is obviously keen to progress its plans to make lease extensions cheaper and simpler. In terms of the costs, the Government has produced case studies setting out potential savings, but there is an information gap as to how these savings will be achieved. This means we are still in the dark about the potential impact of these proposals on landlord and tenants alike and how they will be implemented.
The Government is also proposing to increase the non-residential limit in collective enfranchisement claims to allow leaseholders in buildings with up to 50% non-residential floor space to buy their freehold or take over their management. Whilst this may initially be appealing to leaseholders, this could bring a much more complicated category of building into leaseholder control. This could also lead to an increasing fragmentation of the country’s high street which are in desperate need of strategic vision. Further, there is an ever increasing web of regulation particularly around building and fire safety, which means that responsibilities for those owning and managing leasehold properties are becoming greater. Leaseholders needs to be aware of these responsibilities before taking the plunge into management and ownership.
Related coverage:
BE News, PBC Today, CoStar, Landlord Knowledge, Property Industry Eye, EG
