Major Leasehold and Freehold Reforms Now Law
On Friday, May 24, 2024, the Leasehold and Freehold Reform Bill received Royal Assent, officially becoming law. This legislation was part of the 'wash-up' period, where the House of Lords prioritised and expedited Bills with cross-party support following the General Election announcement on May 22, 2024.
Major Leasehold and Freehold Reforms Now Law: A Comprehensive Update for Homeowners
On Friday, May 24, 2024, the Leasehold and Freehold Reform Bill received Royal Assent, officially becoming law. This legislation was part of the 'wash-up' period, where the House of Lords prioritised and expedited Bills with cross-party support following the General Election announcement on May 22, 2024.
Key Reforms Introduced
Although not perfect, this new legislation marks the beginning of crucial reforms to outdated property laws. Notably, the sale of new leasehold houses will be banned, ensuring that every new home in England and Wales is freehold from the start.
Additionally, new leaseholders will no longer need to wait two years before extending their lease or purchasing the freehold.
These reforms aim to make extending leases more common and to increase transparency around leasehold properties, facilitating easier buying, selling, and renting processes.
Strengthened Consumer Rights
The new legislation brings several benefits to homeowners, making it easier and cheaper to extend leases or buy freeholds. Lease extensions now span 990 years for houses and flats, a significant increase from the previous terms of 50 and 90 years, respectively.
Additional protections include:
- Standardised billing formats for easier scrutiny of service charges
- Simplified processes for leaseholders to take over building management
- Abolition of the requirement for leaseholders to cover freeholders' legal costs when making claims
- Transparent handling fees replacing excessive building insurance commissions
Redress and Accountability
The Act mandates that freeholders who manage their buildings directly must join a redress scheme, aligning them with managing agents who are already required to belong to such schemes. This change allows leaseholders to challenge freeholders if necessary. Homeowners on private and mixed-tenure estates also gain new rights to redress, enabling them to access detailed information about charges and challenge them when needed.
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