The Leasehold and Freehold Reform Act 2024

On 24 May 2024, just before Parliament came to an end following the general election announcement, the Leasehold and Freehold Reform Bill 2023-24 (LFRB 2023) became law and is now called the Leasehold and Freehold Reform Act 2024 (LFRA 2024).

Many expected the Bill to be shelved given the imminent election and the various battlegrounds still to be resolved i.e. abolition of marriage value, capping ground rents, removing landlords costs of lease extensions.

The LFRA 2024 aims to greatly improve the rights of people who have long leases on houses and flats in England and Wales by:

• Banning new long residential leases for houses unless there is an exception.
• Giving more rights to leaseholders about service charges, insurance commissions, administration charges, and sales information, and reducing the costs they pay in legal disputes.
• Changing the laws for leasehold enfranchisement and lease extensions for both houses and flats, and expanding the right to manage (RTM).
• Extending standard lease terms to 990 years for both houses and flats, up from 50 years for houses and 90 years for flats.
• Allowing leaseholders to take over management or buy their freehold if up to 50% of the building is non-residential, up from the previous 25%.
• Removing the rule that leaseholders must own their house or flat for two years before they can extend their lease or buy the freehold.
• Capping ground rents within the lease extension valuation, in order to reduce the premium payable

Additionally, the LFRA 2024 sets rules for estate management charges to give freeholders similar protections to leaseholders. It also requires landlords and estate management companies to join a mandatory redress scheme.

These are some of the major changes, with many more to follow in secondary legislation. The  Landlord and Tenant Team at Bate and Albon Solicitors will be keeping a close eye on developments.