Law Commission issues blockbuster report27 Jul 2020 // Insights
Seddons Enfranchisement Partner John Midgley comments on Law Commission's blockbuster reports on leasehold enfranchisement.
The Law Commission has just launched three reports which recommend substantial reforms to the Government affecting the future of leasehold enfranchisement, right to manage and commonhold.
It will be up to the Government and ultimately Parliament to decide whether all or any of the recommendations get enacted.
The proposals include:
- abolishing the need to have owned a flat for at least 2 years before being able to pursue an individual lease extension claim
- creating consistency between house and flat enfranchisement claims - including, for example, increasing the new extended lease terms to 990 years for both houses and flats instead of the present approach where a house lease term can be extended by 50 years and a flat lease term by 90 years
- providing a right to buy out onerous or rising ground rents without the need to extend the lease term
- increasing the non-residential limit from 25% to 50% on both collective enfranchisement (i.e. buying the freehold of a block of flats) and right to manage claims
- allowing estate-wide claims on both collective enfranchisement and right to manage claims where there are “related” blocks on a housing estate with common services and grounds rather than having to pursue claims on a block by block basis as at present
- allowing live-work units to qualify to join in a collective enfranchisement claim
- allowing right to manage of an individual leasehold house
- streamlining various processes (including having a legal right to serve notices by email) and restricting the landlord's ability to recover costs
- seeking to reinvigorate the concept of commonhold, including through the enfranchisement process by way of an “acquire (the freehold) and convert (to commonhold)” mechanism
Commenting on the Law Commission’s proposals, Seddons Head of Leasehold Enfranchisement, John Midgley said:
“These long awaited proposals are a blockbuster piece of work from the Law Commission although there is a long way to go before we will know if and when any or all of them will come into practice. There will be some things which practitioners and both their freehold and leasehold clients will welcome, particularly in the streamlining of processes, but there is a huge raft of measures here which could make a difference to leaseholders and freeholders alike – even though it may take many years before any changes get off the ground.”
If you have any questions regarding this article or want to know how these proposals may affect you in the future, please call John Midgley on 020 7725 8068 or email email@example.com.
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