Buying The Freehold: Planned Reform Of Leasehold Enfranchisement26th Jul 2018
Residential leasehold property has been in the news for some time primarily because of:
Last December the independent Law Commission announced a review of residential leasehold law. Now it has published its initial findings…
They include potentially radical reforms that could have significant implications for people who have bought leasehold houses in England and Wales.
And while the proposals would not affect leasehold flats, they give a clear indication of the government’s possible future thinking in respect of leasehold blocks.
Residential Leasehold Reforms Suggested By The Law Commission
The Law Commission suggests making it easier for leasehold homeowners to buy the freehold of their property by:
- changing the formula used to calculate the fair price payable to a freeholder for a freehold purchase by a leaseholder – it would simplify calculations and reduce the premium payable by the leaseholder (while still remaining sufficient to compensate freeholders)
- removing the condition that a leaseholder must have owned their property for a minimum of two years before being able to buy the freehold
- allowing leasehold house owners on an estate to buy the freehold of the estate as a whole
- giving leaseholders the option to buy unlimited longer lease extensions (without a ground rent) of 125 or 250 years
- making the enfranchisement procedure simpler to stop leaseholders from falling into ‘legal traps’
- scrapping the requirement for leaseholders to pay their landlord’s reasonable legal and valuation costs (or capping the contribution).
It is not yet known how many of these suggested reforms will make it into law. But we should have a clearer idea when full consultation occurs in September 2018.
In the meantime, this will be welcome news to leasehold house owners – of which there are an estimated 1.4 million in England alone.
Get Expert Legal Advice On Residential Leasehold Property
Extending your lease or buying the freehold? Want to change the management company at your block? Worried about service charges?
Contact residential leasehold solicitor Nick Leedham at the Bournemouth office for expert legal advice.