With several new laws were rushed through last Friday, including the Leasehold and Freehold Bill, after the decision last week to call a general election for 4 July.
This new law is expected to make it easier and cheaper for leaseholders to buy their freehold and increase standard lease extension terms to 990 years for houses and flats so leaseholders can enjoy secure ownership without the hassle and expense of future lease extensions. The Act will also remove barriers for leaseholders to challenge their landlords’ unreasonable charges at Tribunal.
However plans to remove ground rent or cap it at £250 have been dropped.
This new law will also ban the sale of new leasehold houses other than in exceptional circumstances, end excessive buildings insurance commissions for freeholders and managing agents, and eliminate the requirement for a new leaseholder to have owned their house or flat for two years before they can buy or extend their lease.
The new powers will also grant freehold homeowners on private and mixed tenure estates the same rights of redress as leaseholders, and equivalent rights to transparency over their estate charges, and give leaseholders more freedom to take over the management of their property if they choose to. Leaseholders in some buildings are barred from taking over the management of the site or buying its freehold if more than 25% of its floor space is commercial, such as shops, but this limit will now be increased to 50% to enable more homeowners to access Right to Manage or the right to a collective enfranchisement.
The Act also aims to make it easier and cheaper for leaseholders to take over management of their building, allowing them to appoint the managing agent of their choice and extends access to redress schemes for leaseholders to challenge poor practice. The government will require freeholders, who manage their building directly, to belong to a redress scheme so leaseholders can challenge them if needed – managing agents are already required to belong to a scheme. And by making buying or selling a leasehold property quicker and easier by setting a maximum time and fee that for home buying and selling information.
Homeowners on private and mixed tenure estates will also be granted comprehensive rights of redress, so they receive more information about what charges they pay, and the ability to challenge how reasonable they are.
The Act also aims to further benefit leaseholders by:
Scrapping the presumption that leaseholders pay their freeholders’ legal costs when challenging poor practice that currently acts as a deterrent when leaseholders want to challenge their service charges.
Banning opaque and excessive buildings insurance commissions for freeholders and managing agents, replacing these with transparent and fair handling fees.
Removing the requirement for a new leaseholder to have owned their house or flat for 2 years before they can extend their lease or buy their freehold.