The Leasehold and Freehold Reform Act 2024

Please note that this News item is not maintained, and reflects the law as at the date of publication or update.

On 24 May 2024, as part of the parliamentary ‘wash up’, the Leasehold and Freehold Reform Bill received Royal Assent and was passed as law as the Leasehold and Freehold Reform Act 2024.

The Act seeks to improve the rights of residential long leaseholders, and in particular in connection with lease extensions it provides for the following changes:

  • A right to an extension of 990 years
  • Abolition of the 2 year ownership qualification
  • Removal of the concept of ‘marriage value’ for leases with remaining terms of less than 80 years
  • Removing the ability of a landlord to recover costs from their tenant where a statutory claim is used

In relation to enfranchisement, the Act has altered the prohibition on beginning the process if more than 25% of the floor space of the building is used for commercial purposes.  The new threshold is 50%. This will make enfranchisement more accessible in mixed use properties.

The legislation should see a shift in the balance of power between leaseholders and landlords and it is anticipated that the overall effect will be fairer and less contentious lease extension claims.

The Act is yet to be brought into force and it is expected that secondary legislation will need to be passed to bring all of the reforms into effect. The anticipated timeframe for implementation is 2025-2026.

At least until more is known, parties should seek specialist legal and valuation advice to ensure that their position is protected in the transition period.

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