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Leasehold Reform (Ground Rent) Act 2022 to commence on 30 June 2022

The Leasehold Reform (Ground Rent) Act 2022 will come into force on 30 June 2022.

The Leasehold Reform (Ground Rent) Act 2022 will come into force on 30 June 2022 for residential leasehold properties in England and Wales, except for retirement properties where the Act will not apply before 1 April 2023.

 

It will restrict ground rents to a peppercorn (or zero) on brand new leases.

 

If an existing lease is extended voluntarily, the ground rent can continue for the rest of the existing term remaining on that lease but must be zero for the new term added to the lease.

 

Seddons Head of Enfranchisement, John Midgley says: ‘The countdown has begun. If new leases are entered into with ground rents from 30 June, landlords should be aware that they face fines ranging from £500 – £30,000 and orders to repay with interest any ground rent paid to them incorrectly. Developers will also need to be conscious of this as some parts of an estate may end up with zero rental income.’

 

Please note the above is only a summary of the position and not intended to be full legal advice. For further information please contact John – john.midgley@seddons.co.uk

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