High ground rent leases will no longer be at risk of being assured shorthold tenancies under Renters (Reform) Bill reforms

It has long been known that a ground rent of more than £250 under a long lease of a property outside of London leads to unintended consequences of that lease becoming an assured shorthold tenancy.

The implication is that forfeiture rules (and the plethora of protections for leaseholders) no longer apply, and the flat can in theory be repossessed using the much faster process of possession proceedings under the Housing Act 1988, which is designed to apply to short tenancies rather than long leases.

This issue has caused sales to fall through and has led to countless deeds of variation to insert an assurance that the freeholder will not seek to rely on the possession process under the Housing Act 1988 to take possession of the flat.

The Renters (Reform) Bill proposes to remove the issue altogether, by confirming that a lease of more than seven years cannot be an assured shorthold tenancy.

The Bill is subject to the usual process of legislation passing through Parliament and is likely to change. However, on the face of it, this is a welcome clarification for flat owners, leasehold advisers and conveyancers.

Ricky Coleman is a solicitor in the Landlord and Tenant team at Bate & Albon Solicitors.