Property Week quotes Lauren Fraser on a leasehold ruling that potentially leaves the reform agenda in limbo
This month, the UK government succeeded in the High Court against a group of freeholders, in a case relating to the Leasehold and Freehold Reform Act 2024 (LFRA).
The landlords who brought the Arc Time Freehold case argued that the LFRA infringed on their human rights under Article 1 of the first protocol of the European Convention on Human Rights. This states that every person “is entitled to the peaceful enjoyment of his possessions; no one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law”.
The claimants also set out to challenge three key points of the LFRA: the ground rent cap, marriage value reform and costs recovery reform. However, the High Court found in favour of the government in all three areas.
The High Court however ruled that “the ground rent cap cannot be criticised on the basis that a less intrusive measure ought to have been adopted, nor that there was no sufficient evidential basis for the selection of a cap of 0.1%”. The court concluded that a ‘fair balance’ had been taken on the objectives in the new law.
Lauren Fraser, Senior Associate in our Real Estate Disputes team, comments for Property Week. She explains that the decision is 'dramatic' for landlords, but at the same time not a massive surprise to the sector:
Given what is at stake, it seems highly likely that this challenge will be renewed by way of an appeal and it wouldn’t be surprising to see a leapfrog to the Supreme Court in a matter of such importance.”
"When dismissing the landlords’ challenges, the court repeatedly pointed to parliament’s wide margin of discretion in bringing in the legislation.
"The next question is what impact this will have on the timing for the government’s programme of leasehold reform, both in terms of implementing the LFRA and bringing forward the promised draft Leasehold and Commonhold Reform Bill.
Read the full article in Property Week here.
