Leasehold and Freehold Reform Act 2024: What has changed?

The Leasehold and Freehold Reform Act 2024 (the "Act") in England and Wales obtained Royal Assent on 24 May 2024. The Act makes significant amendments to existing leasehold enfranchisement legislation, with the aim of making it easier and cheaper for leaseholders to buy their freehold or extend their lease. While the Act received Royal assent on 24 May 2024 and is now law, most of its provisions are not yet in effect and so are not in force.

A. Changes to lease extensions

1. The Act introduces a new universal right for leaseholders to extend their lease by 990 years at zero ground rent (having previously been 50 years for houses and 90 years for flats). This applies to both houses and flats. 

2. It removes the previous qualifying criteria for lease extensions, meaning all leaseholders now have this right regardless of the length of their current lease .

3. As with collective enfranchisement, the Act prescribes a statutory formula for calculating the premium payable for lease extensions . This replaces the existing complex valuation process.

B. Changes to collective enfranchisement

4. The Act reduces the qualifying criteria for tenants to participate in collective enfranchisement claims. Leaseholders with leases of just 10 years or more can participate in such claims, which is down from 21 years previously . 

5. The minimum participation required for a collective enfranchisement claims have also been reduced under the Act claim from 50% of leaseholders to 33% . This makes it easier for leaseholders to join together to buy their freehold.

6. The Act has introduced a new prescribed formula for calculating the premium payable to the landlord. This is intended to make the valuation process simpler and reduce disputes. 

7. The act removes the presumption that leaseholders will pay their freeholders' legal costs. 

C. New dispute resolution process

8. The Act establishes a new First-tier Tribunal to deal with all leasehold enfranchisement disputes . This is designed to provide a quicker, more accessible and more affordable disputes process compared to the existing County Court procedure. 

The changes introduced by the Leasehold and Freehold Reform Act 2024 represent the most significant overhaul of leasehold enfranchisement legislation in over 30 years. There are a number of other additional changes not referenced in this article. The reforms make it simpler, easier and cheaper for leaseholders to buy their freehold or extend their lease. This is likely to lead to a significant increase in leaseholders exercising these rights.

If you have any queries, please do not hesitate to get in touch with our specialist team by telephone on 0207 052 3545 or by email info@kaurmaxwell.com

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice.

Please contact KaurMaxwell for advice before taking any action in reliance on it. 

By: Kenneth Anom