25 July 2018

Government proposes radical changes to leasehold law

On 19th July the Government released details of their new proposal to provide a fairer deal for leasehold owners. An independent legal body is developing a range of measures to make the enfranchisement process easier and cheaper for leaseholders.

We will receive more news on the subject in September 2018 when the Government is due to publish its Consultation Paper on enfranchisement.  It will then be subject to a full public consultation. They will also be turning their minds to Commonhold and Right to Manage before the end of the year.

The headline changes are as follows:

  • Changing the valuation formula which will reduce the price a leaseholder has to pay for the freehold.  The could involve capping the amount of ground rent that is payable under the formula to 10 years.
  • Making it easier for leaseholders of houses to buy their freeholds to avoid leaseholders getting caught out by complex legal processes. It is felt that the current legislation which is different for leaseholders of flats and houses is difficult and complex to apply.  Rumour has that the Law Commission are going to abolish the current legislation and  introduce single new Act which will apply to both leasehold flats and houses with a more simple definition of a "residential unit".
  • Introducing longer terms for lease extensions of say 125 and 250 years.
  • Removing the requirement that leaseholders must have owned their house for two years before making a claim.
"Forsters had already hugely increased in size and turnover in the last ten years, and this move has really added to that"  on the arrival of the private client team from Gowling WLG.
Chambers HNW Guide 2017
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