Leasehold and Freehold Reform Bill
Leasehold and Freehold Reform Bill
Capping of ground rent dropped
The long-awaited Leasehold and Freehold Reform Bill may have been rushed through Parliament last week to become law but plans to remove ground rent for existing leaseholders or cap it at £250 have been dropped and there is no time set for when the Act actually comes into force. Many of the provisions promised by the Government have been left out and additional legislation is needed to bring the Act into force .This will now need to wait for a new government to deal with.
The new law aims to make it cheaper and easier for more people to extend their lease, buy their freehold and take over management of their building. A ground rent is paid by owners of leasehold properties and in some cases are high and make it difficult to sell their homes
The Renters (Reform) Bill, which aimed to prevent landlords from evicting tenants without a valid reason, was part of the 2019 Conservative manifesto commitment to abolish Section 21 evictions but has now been dropped.
What will change (once the Act comes into effect):
- You will no longer have to own a property for 2 years before you can extend the lease or buy the freehold
- You will no longer have to pay the freeholders costs when making a claim to extend the lease or buy the freehold
- When extending a lease, you can extend it to 990 years rather than the current 90 years
- Freeholders, who manage their building directly, will be required to belong to a redress scheme so leaseholders can challenge them if needed – managing agents are already required to belong to a scheme.
- Make buying or selling a leasehold property quicker and easier by setting a maximum time and fee that can be charged for sale information from the freeholder or managing agent.
- Give freehold homeowners the right to receive more information about what the freehold management charges they pay, and the ability to challenge how reasonable they are.
If you are looking to purchase a property and wish to discuss your options our Property team are here to help you at Kerseys Solicitors in Ipswich at [email protected] or telephone 01473 213311, Kerseys Solicitors in Felixstowe at [email protected] on 01394 834557 or Kerseys Solicitors in Colchester at [email protected] on 01206 584584.
