The Leasehold and Freehold Reform Act 2024
As many will be aware, the announcement of the general election in July resulted in many parliamentary bills being included the legislative wash-up before parliamentary dissolution.
Notably, The Leasehold and Freehold Reform Bill received assent further to debate in the Lords late on Friday 24th May. Over time, the Act will introduce a host of changes across the leasehold sector including:
- Increasing the standard lease extension term to 990 years for houses and flats (up from 50 years in houses and 90 years in flats) and removing marriage value
- Ensuring transparency over service charges by making freeholders or managing agents issue bills in a standardised format
- Extending access to redress schemes
- Scrapping the presumption that leaseholders pay their freeholders’ legal costs
- Banning the sale of new leasehold houses except in exceptional circumstances
- Removing the requirement for a new leaseholder to have owned their house or flat for 2 years before they can extend their lease or buy their freehold
- Increasing the 25% limit for the right to manage in mixed use developments to 50%.
- Changing rules around Insurance fees
- Providing a new regime for rentcharges, their recoverability and management
Absent from the Act are provisions for abolishing the right of forfeiture and the introduction of the much-discussed ground rent cap that will be subject to future legislation.
Many of the provisions are subject to commencement under regulations / Statutory Instruments which will be issued by the secretary of state in due course, with indications this will be across 2025/2026 and beyond, although this may be subject to further parliamentary debate and clarification as regulations evolve. It should also be noted that section 124 of the Act, regarding commencement, suggests that provisions regarding rentcharges, tribunal matters on service charges and amendments to the Building Safety Act will be effective two months from Assent – the 24th July. We shall continue to monitor progress and report as further detail emerges.
Read the latest documents here: Leasehold and Freehold Reform Act 2024 - Parliamentary Bills - UK Parliament
