19 April 2021

Residential Leasehold Reform Podcast

The two leading authorities on residential leasehold reform, and co-authors of Hague on Leasehold Enfranchisement, Damian Greenish, Senior Consultant at Forsters and Tony Radevsky, Barrister at Falcon Chambers, join podcast host Miri Stickland to provide a short history of enfranchisement rights and their views on the need for modernisation in light of the Government’s recent announcement proposing wide-sweeping residential leasehold reforms.

“Leasehold reform is a very political subject and always has been. It is noticeable that changes to the legislation have generally followed a pattern of political involvement.”

“The Law Commission was asked recently to look into the law of enfranchisement to make it easier and cheaper for lessees. A widespread view had formed that the process was too complicated, drawn out and expensive. Whilst there are a number of genuine difficulties with the current regime, my view is that these could be sorted out by making some amendments. The Law Commission take a different approach however and propose scrapping the current legislation completely and starting afresh. This could be problematic as, for example, the definitions of ‘house’ and ‘flat’ have generated a surprising amount of litigation. The proposal is to replace both these existing definitions with a new ‘residential unit’ but that itself is currently undefined and has the potential to cause litigation.”

“One area of great controversy is ground rents. Builders and developers selling houses and flats at a ground rent could effectively sell those properties twice, firstly by selling the leasehold interests to residential buyers, and then by selling on the ground rents to an investor. The trouble was when builders and developers became greedy, providing for dynamic ground rents which increased over time, some of which were at quite outrageous rates. Buyers were then surprised to find that the price of acquiring their freehold was very significant because you need to capitalise that ground rent in the valuation.”

“The options for reform proposed by the Law Commission are not accompanied by a draft Bill and there isn’t yet a timetable for legislation. By putting forward very ambitious and wide-ranging changes, this may have a delaying effect, whereas more modest proposals might have progressed through Parliament more quickly.”

In this episode we were joined by:

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