UK GVT Leasehold Commonhold Reform


On Nov. 27, UK GVT issued outcome of consultation, published bill.


  • UK GVT Department for Levelling Up, Housing and Communities issued summary of responses, UK GVT response to proposals to reform leasehold/commonhold systems.
  • Also issued letter to Law Commission with thanks for its work on the subject and confirmed the introduction of the Leasehold and Freehold Reform Bill to parliament.
  • Follows UK GVT Nov. 2023 issued 2023 King's speech and briefing note, see #190421.
  • Background
  • In Jan. 2022 UK GVT consultation sought views on a number of reforms to the leasehold and commonhold system following recommendations from Law Commission.
  • These would broaden access to enfranchisement (buying the freehold) and the right to manage a building, UK and Welsh governments agreed the proposals in principle.
  • Consultation aimed to ensure those affected by proposals had opportunity to comment on impact of the changes before final decisions made, consultation closed Feb. 2022.
  • UK GVT Response
  • Consultation received over 2,000 responses, showing strength of interest in reforms.
  • Government will legislate in Leasehold and Freehold Reform Bill to increase the non-residential limit for collective enfranchisement and the right to manage to 50%.
  • And legislate to introduce a new right for leaseholders to require freeholders to take leasebacks of non-participating units as part of a collective enfranchisement claim.
  • UK GVT also wishes to cap the total votes allocated to landlords in right to manage companies to one-third of the total votes of qualifying tenants (leaseholders).
  • Also responds to Law Commission recommendation for a 50% non-residential limit for individual freehold acquisitions and a number of their proposals to help reinvigorate commonhold, but these will not be included in the Leasehold and Freehold Reform Bill.
  • In May 2024, UK GVT issued policy paper, shared ownership response, see #213338.
  • May 2024 Royal Assent
  • On May 24, 2024, UKP, UK GVT confirmed the Leasehold and freehold reform act 2024 (LFRA 2024 (UK)) received royal assent, following agreement by both houses on bill.
  • Easier and cheaper for leaseholders to buy freehold, increase standard lease extension to 990 years for houses/flats, provide greater transparency re service charges.
  • Remove barriers for leaseholders to challenge landlords' unjustified charges at tribunal.
  • Also grant freehold homeowners on private and mixed tenure estates the same rights of redress as leaseholders, and equivalent rights to transparency over estate charges.
  • Help more leaseholders take over the management of their property if they want to.
  • Oct. 2024 Commencement Order
  • On Oct. 9, 2024, UK GVT published The leasehold and freehold reform act 2024 (commencement no. 1) regulations 2024 (StIn 2024/1018) which brings into force some provisions of the Leasehold and freehold reform act 2024 (c. 22).
  • Sections 114 (steps relating to remediation of defects); 115 (remediation orders); 116 (remediation contribution orders); 120 (interpretation of references to other acts), in relation to the definition of Building safety act 2022, come into force on Oct. 31, 2024.

Regulators UK GVT; UKP
Entity Types Corp; MG Orig
Reference StIn 2024/1018, 10/9/2024; Act LFRA 2024 (UK), PR, 5/24/2024; Bill, PS, PR, 11/27/2023; BSA 2022 (UK); Citation: LFRA 2024 (UK); StIn 2024/1018;
Functions Financial; Legal; Reporting; Risk; Treasury
Countries United Kingdom
Category
State
Products Corporate; Mortgage
Regions EMEA
Rule Type Final
Rule Date 11/27/2023
Effective Date 10/31/2024
Rule Id 192773
Linked to Rule :190421
Reg. Last Update 10/9/2024
Report Section UK

Last substantive update on 10/14/2024