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If implemented, the Government’s leasehold reform proposals will apply to England only, however, existing legislation applies to both and Wales and England.

This timeline contains details of the leasehold reform programme being undertaken by the Government and the Law Commission and proposed changes to residential tenancies in England only. Click on a topic below to view the relevant consultation information:

 

 Leasehold reform

  

 Assured shorthold tenancies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasehold reform

2017

January - March

7 February

The then Department for Communities and Local Government (“DCLG”) publishes Housing White Paper: Fixing our broken housing market commencing a consultation on changes to planning policy and legislation in relation to planning for housing, sustainable development and the environment.

Claire Fallows - The Housing White Paper: optimising the use of land


April - June

 


July - September

25 July

DCLG publishes consultation: Tackling unfair practices in the leasehold market.

The proposals include:

  • banning the sale of new leasehold houses;
  • limiting the starting value and increase of ground rents on all new residential leases over 21 years;
  • updating Ground 8 of the Housing Act 1988 so long leases over 21 years with an annual ground rent over £1,000 in London and £250 outside of London cannot be an assured tenancy to close a perceived loophole whereby a landlord may seek possession of a long lease under Section 8 (designed for short tenancies) without having to comply with the statutory requirements in order  to forfeit a lease for non-payment of ground rent.  Where a lease is forfeited, as opposed to where a possession order is made under Section 8, the tenant has a right to apply for relief from forfeiture; and 
  • providing freeholders on estates with equivalent rights to leaseholders to challenge the reasonableness of service charges via the First-Tier Tribunal (Property Chamber)

25 July

DCLG publishes consultation: Consultation on recognising residents’ associations, and their power to request information about tenants.

The Government proposes to make it easier for a secretary of a tenants’ association to obtain contact information of qualifying tenants from a landlord to increase the likelihood of the association being formally recognised under Section 29 of the Landlord and Tenant Act 1985.


19 September

Closure of consultation: Tackling unfair practices in the leasehold market


October to December

21 December 

DCLG publishes the Government’s response to Tackling unfair practices in the leasehold market

The proposals include:

  • introducing legislation to ban new residential long leases for existing or new build houses(except in specific circumstances, to be defined);
  • introducing legislation restricting ground rents in new leases to a peppercorn;
  • introducing a right of first refusal for lessees of houses, as exists for leaseholders of flats;
  • addressing the perceived loophole in respect of Ground 8;
  • introducing legislation so that freeholders who pay charges for the maintenance of communal areas and facilities have rights to challenge the reasonableness of service charges. 

2018

January - March

5 March

MHCLG publishes Government response to the housing White Paper consultation: Fixing our broken housing market


July - September

24 July

Housing, Communities and Local Government Select Committee launches inquiry into leasehold reform.


20 September 

The Law Commission publishes a consultation paper entitled: Leasehold home ownership: buying your freehold or extending your lease.

The consultation makes a number of proposals to overhaul the procedure for the leasehold enfranchisement of houses and flats including:

  • introducing a single scheme for “residential units” rather than separate schemes for houses and flats;

 Lease Extension

  • abolishing the requirement to own the property for two years in order to qualify;

Individual Acquisition of Freehold

  • the qualifications based on financial limits such as the. low rent test and rateable values to be removed;
  • new qualifying criteria that if there is more than 25% non-residential use then the building will not qualify (as already exists for collective enfranchisement claims);

Collective Enfranchisement

  • introducing a requirement for the freehold to be purchased by a company limited by guarantee on behalf of the participating leaseholders unless there are less than 4 units;
  • permit collective enfranchisement of an estate rather than single blocks
  •  no further claim can be made for 5 years once a collective enfranchisement has concluded;
  • new right for non-participating leaseholders to later purchase a share in the freehold company;

Procedure & Valuation

  • single procedure for lease extensions, individual freehold purchase and collective freehold purchase with standard forms;
  • the Law Commission’s stated aim is to provide a better deal for leaseholders as consumers and the consultation paper sets out alternative valuation options to seek to reduce premiums.

Lauren Fraser - The Law Commission launches consultation into the leasehold enfranchisement of houses and flats


October - December 

15 October

Publication of the Government’s response to Recognising residents' associations, and their power to request information about tenants; government response 


15 October 

MHCLG publishes the Government’s consultation paper: “Implementing reforms to the leasehold system in England: A consultation”.

The consultation provides more detail on the Government’s proposals to ban the sale of leasehold houses and to cap ground rents in new residential leases. 

The key points are:

  • a proposed ban on granting long leases of houses which will apply to any houses developed on freehold land at any time and on leasehold land acquired from 22 December 2017;
  • a proposed cap to ground rents on new residential long leases at £10 per annum;
  • a proposal to give freeholders the same rights as those currently held by leaseholders to challenge the reasonableness of service charges levied through a deed of covenant or an estate rent charge; and
  • landlords and managing agents to provide leasehold information in connection with a sale within a fixed period of time (to be determined) and with their fees to be capped at an amount to be determined.

Lauren Fraser - Government consultation to improve the leasehold sector


1 November

Tenants’ Associations (Provisions Relating to Recognition and Provision of Information) (England) Regulations 2018 came into force with the aim of making it easier for tenants’ associations of residential properties in England to become legally recognised and to obtain information from landlords about other tenants who have a legal right to join a tenants’ association.

Rob Highmore, Lauren Spark and Laura Bushaway - Legal Update: Tenants' Associations (Provisions Relating to Recognition and Provision of Information) (England) Regulations 2018


26 November 

Closure of consultation: Implementing reforms to the leasehold system in England: summary of consultation responses and government response.

10 December

The Law Commission publishes consultation paper:  Reinvigorating commonhold: the alternative to leasehold ownership.

The Commonhold and Leasehold Reform Act 2002 introduced Commonhold as an alternative structure to leasehold.  It allows for the ownership of a freehold flat within a larger residential development without leases or third party freeholders and there is no forfeiture because the unit holders own their freehold. 

The Law Commission’s proposals for commonhold include that it should be possible to convert to commonhold without the unanimous consent of leaseholders and that the threshold for conversion should be 50% or 80% of long leaseholders of the flats in the building.


 

 

Assured shorthold tenancies

2017

July - September

25 July

DCLG publishes consultation: Tackling unfair practices in the leasehold market.

The proposals include:

  • banning the sale of new leasehold houses;
  • limiting the starting value and increase of ground rents on all new residential leases over 21 years;
  • updating Ground 8 of the Housing Act 1988 so long leases over 21 years with an annual ground rent over £1,000 in London and £250 outside of London cannot be an assured tenancy to close a perceived loophole whereby a landlord may seek possession of a long lease under Section 8 (designed for short tenancies) without having to comply with the statutory requirements in order  to forfeit a lease for non-payment of ground rent.  Where a lease is forfeited, as opposed to where a possession order is made under Section 8, the tenant has a right to apply for relief from forfeiture; and 
  • providing freeholders on estates with equivalent rights to leaseholders to challenge the reasonableness of service charges via the First-Tier Tribunal (Property Chamber)

October - December

21 December

DCLG publishes the Government’s response to Tackling unfair practices in the leasehold market.

The proposals include:

  • introducing legislation to ban new residential long leases for existing or new build houses(except in specific circumstances, to be defined);
  • introducing legislation restricting ground rents in new leases to a peppercorn;
  • introducing a right of first refusal for lessees of houses, as exists for leaseholders of flats;
  • addressing the perceived loophole in respect of Ground 8;
  • introducing legislation so that freeholders who pay charges for the maintenance of communal areas and facilities have rights to challenge the reasonableness of service charges. 

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