What are the key objectives of the Leasehold and Freehold Reform Bill?

The much-awaited Leasehold and Freehold Reform Bill was presented to the House of Commons on November 27, 2023, soon after the King's speech.

The objectives of The Leasehold and Freehold Reform Bill

Prohibit the creation of new leasehold houses in England and Wales, excluding new leaseholds on flats. Simplify and reduce the cost of extending lease terms or acquiring freeholds for existing leaseholders in homes and apartments. Extend the standard lease extension term from 90 to 990 years with a reduction in ground rent to 0 for homes and apartments. Eliminate the precondition that new leaseholders must have owned their property for two years before benefiting from these reforms.

Expedite and streamline the buying or selling of a leasehold property by establishing a maximum time frame and fee for freeholders to provide information to leaseholders. Enforce transparency concerning servicechargesorted.co.uk/blogs/service-charge-accounts-for-self-managed-small-blocks-of-flats'>service charges for leaseholders. Replace commissions for managing agents, landlords, and freeholders related to building insurance with transparent administrative fees. Broaden access to redress schemes, enabling leaseholders to challenge poor practices. Abolish the presumption that leaseholders cover their freeholders' legal costs when contesting poor practices.

After The Leasehold and Freehold Reform Bill, leasehold houses got similar rights to leaseholders, e.g., RTM and management of estate lands ...

The Bill also aims to extend equivalent redress rights to freehold homeowners on private and mixed-tenure estates. There is a recommendation for reinforcing the legislation outlined in the Building Safety Act of 2022 to ensure freeholders and developers cannot evade their responsibilities to fund building remediation work.

What percentage of floorspace cannot be commercial to claim the RTM, and will The Leasehold and Freehold Reform Bill change this?

A vital feature of the Bill is the decision to grant leaseholders in buildings with up to 50 percent non-residential floor space the option to purchase their freehold or assume management control. This is an increase from the previous 25 per cent. Before the Bill was introduced, the Housing Secretary, Michael Gove, expressed that considerable effort goes into achieving homeownership. Many aspirants have been deprived of the complete advantages of ownership because of the unbalanced and outmoded leasehold system. Gove emphasised that freeing leaseholders from these archaic laws is a crucial step in the Government's Long-Term Plan for Housing. He asserted that the day symbolises a vital moment for millions of leaseholders nationwide.

The unveiling of the new legislation is expected to grant substantial rights and protections to leaseholders, reduce unjust costs significantly, and combat exploitation within the leasehold system. This move is a landmark step towards ensuring fairness and safeguarding the interests of leaseholders across the country. The government has meticulously crafted these reforms in collaboration with the Law Commission since 2017. They received active support from Members of Parliament and valuable input from various stakeholders, including different campaign groups.

Throughout the Bill's legislative journey, these groups collaborated with the government, Members of Parliament, and the Select Committee while leveraging the expertise of top lawyers to contribute valuable insights. This legislation deals with one of the longstanding challenges faced by the nation, fairness in the housing market. The provisions outlined in the Bill are poised to set the country on a more equitable future by rectifying historical imbalances between leaseholders and freeholders. The ultimate goal is to provide homeowners with a more practical set-up, enhanced protections, and extended rights in the housing landscape.

What will The Leasehold and Freehold Reform Bill do for houses?

The government's effort to equalise residents' rights in freehold estates is commendable. Freehold homeowners on private and mixed-tenure estates will receive the same redress rights as leaseholders and equivalent transparency rights regarding their estate charges. This aims to create a fair and consistent framework for residents across different property types. These proposed reforms aim to bring about comprehensive changes, ensuring fairness and efficiency in the leasehold system while safeguarding the rights and interests of homeowners.