On the 24th May 2024, the Leasehold and Freehold Reform Act officially became law, bringing significant changes to the way homeowners interact with their properties. The Act aims to provide more rights, power, and protections to homeowners, making it easier and more affordable for them to buy their freehold, extend their lease, and take control of their property.
The new legislation also grants freehold homeowners on private and mixed tenure estates the same rights as leaseholders, including transparency over estate charges and the ability to take over the management of their property if they wish. The Act will also increase the threshold for commercial floor space in a building from 25% to 50%, allowing more leaseholders to access the Right to Manage or collective enfranchisement options.
The Leasehold and Freehold Reform Act has received Royal Assent and strengthens new consumer rights for homeowners.
Key changes include:
• Simplified lease extensions: Leaseholders can now enjoy longer lease terms, with the standard extension period increasing to 990 years for houses and flats, reducing the need for frequent and costly lease extensions.
• Transparency in service charges: Freeholders or managing agents must issue standardised bills, making it easier for leaseholders to review and challenge charges.
• Easier building management: Leaseholders can now take control of their building’s management, appointing their preferred managing agent.
• Reduced costs for enfranchisement: Leaseholders will no longer have to pay their freeholder’s costs when making a claim, making it more affordable to exercise their enfranchisement rights.
• Expanded redress schemes: The government will require freeholders who manage their building directly to join a redress scheme, allowing leaseholders to challenge poor practices and seek fair resolutions.
• Streamlined property transactions: The Act sets a maximum time and fee for home buying and selling information, making it quicker and easier to complete property transactions.
• Comprehensive rights for homeowners: Homeowners on private and mixed-tenure estates will now have more information about what charges they pay and the ability to challenge how reasonable they are.
The Act will further benefit leaseholders by:
• Leaseholders won’t have to pay their freeholders’ legal costs when challenging unfair service charges.
• Buildings insurance commissions will be transparent and fair, rather than opaque and excessive.
• New houses will be sold as freeholds, not leaseholds, unless there’s a good reason not to.
• Leaseholders won’t have to wait two years before extending their lease or buying their freehold.
For more information about the new Leasehold and Freehold Reform Act, please visit the official government website: Leasehold reforms become law – GOV.UK (www.gov.uk).
If you require further guidance or support, please don’t hesitate to contact Louise Jones, Residential Property Director, on 07568430834 or email on ljones@thursfields.co.uk.
For more information, please contact:
Dani James
Business Development & Marketing Partner
01905 677066
djames@thursfields.co.uk