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13th Law Commission shakes up leasehold

20 September 2018

The 13th Law Commission has published its Consultation Paper on leasehold enfranchisement reform: “Leasehold home ownership: buying your freehold or extending your lease”. The consultation closes on 20 November 2018. This document sets out significant changes to the way leasehold enfranchisement (the extending of a lease or the buying of the freehold) might work going forward. 

The Law Commission project on leasehold enfranchisement involves a review of leaseholders’ rights to:

  • purchase the freehold of their house
  • participate, with other leaseholders, in the collective purchase of the freehold of a group of flats
  • extend the lease of their house or flat

The Commission previously published a summary paper on proposed solutions for leasehold houses in July 2018. Responses to that consultation criticised the current legislation as being complex, inconsistent and costly. The current consultation sets out provisional proposals for reform designed to provide a new scheme of qualifying criteria for enfranchisement rights, enhance and improve the enfranchisement rights themselves, and provide a new unified procedure for all claims.

The provisional proposals would:

  • provide a better deal for leaseholders by making enfranchisement easier, quicker and more cost effective;
  • reform the existing rights of leaseholders, including removing the separate rules for houses and for flats; and
  • simplify, and reduce the legal and other costs of, the procedure for acquiring a freehold or an extended lease.

Government specifically tasked the Commission to set out options for reducing the price payable by leaseholders to exercise those rights, whilst ensuring sufficient compensation for landlords to reflect their legitimate property interests.

The Law Commission web site provides links to short summaries setting out what their proposals mean for leaseholders of houses and flats, and for landlords. Also a short explanation of why the Commission is discussing landlords’ human rights.

Andrew Bulmer, CEO of IRPM, commented “Reform of leasehold enfranchisement law is overdue and we welcome the Law Commission’s examination of this sometimes complex process. The Commission’s recommendations are thoughtful and progressive.  However, all change brings with it both upsides and downsides and it is important to ensure that reforms are properly thought through. As leading professionals, IRPM members should familiarise themselves with the Law Commission proposals. I would also ask our members to consider the proposed changes and send their responses both directly to the Law Commission and to IRPM via”

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