Leasehold Reform - A Summary

By now you will have seen all of our articles on the Law Commission's proposals for Leasehold Reform. There are some proposals concerning intermediate leases which we have not covered, but we hope the information we have provided is of use.

 

Ultimately, the Law Commission has recognised from their consultation paper that the area of enfranchisement is particularly complex. They have a requirement to ensure that leaseholders are not unnecessarily asked to pay excessive sums of money to retain the freehold of their property, whilst at the same time ensuring that freeholders are not stripped of their asset, without receiving adequate compensation for it.

 

In doing so they have noted that there may be a number of possible areas for reform, but they do have to be carefully constructed so that they do interlink, and form a proposal, that will result in there being a realistic and positive proposal moving forward, that would still meet the requirements of all those interested in their legislation.

 

Some of the proposals are positive. It makes little sense after all for there to be a differentiation between the enfranchisement of houses and the enfranchisement of a block of flats. It certainly is more conducive to a good freehold relationship for the majority if not all of flats to participate in a freehold acquisition and therefore for a right to participate process to be included. To however to restrict the right of a freeholder to adequate compensation would be quite incorrect, and therefore some of the proposals in relation to fixed rent cap based premiums, may well be considered to be unreasonable.

 

Ultimately however, this is a consultation process. How any new legislation is formed depends on the replies to the consultation. If only landlord's reply to this consultation, then the legislation could well be landlord focused. The same would also be the case if only leaseholders respond. Whether you are therefore a freeholder or a leaseholder you must consider this legislation and actively participate in the consultation. If you do not, again the legislation may be woefully inadequate.

 

We therefore hope that the articles and summaries we have provided have given you a brief indication as to the complex area, sufficient enough to provide you with a desire to participate in this process. If you have any uncertainties concerning the areas, then we are more than happy to discuss the areas with you.

 

Our intention is to follow the reforms closely. As specialists in the area of enfranchisement, we recognise the significant changes that will occur, and therefore it is imperative that not only you as leaseholders and freeholders, but us as legal professionals, ensure that as this legislation develops, we understand any new complexity that may arise.

 

If you have any questions concerning the consultation, or indeed leasehold generally, please contact this firm’s Real Estate Department on 01702 338338 or llancaster@paulrobinson.co.uk