In 2018 the Government issued a Consultation Paper – “Implementing reforms to the leasehold system in England”. The aim of the proposed reforms is to make the area of leasehold extension and enfranchisement more “user friendly”, particularly for the owners of leasehold properties, but also for the freeholders. Karen Muir explains more.
At present, the process of obtaining a statutory lease extension can prove to be a minefield, with rigid criteria for Notices and tight statutory limitations.
Some of the proposed leasehold extension reforms include the following:-
- One standard Notice for all enfranchisement matters
- Abolishing the 2-year ownership criteria for statutory lease extensions
- Simpler valuation process, ensuring fair premiums for both tenants and landlords
- Tenants to no longer pay landlords’ “reasonable costs” of the lease extension process, maybe introducing a fixed fee
- Easier process for lease extensions where the landlord is “missing”, i.e. tenant can apply directly to the First-Tier Tribunal, eliminating the need for a Court application first
- Where the landlord fails to serve a Counter Notice, First-Tier Tribunal to determine the premium, rather than the tenant being able to obtain the lease extension at the premium they proposed in the Notice of Claim
- Low value claims to be determined by one member of the Tribunal, rather than a full Tribunal hearing, resulting in reduced costs
- Reducing future leasehold ground rents to a “peppercorn” and abolishing doubling/tiered ground rents
These proposed changes will be a welcome breath of fresh air to the lease extension process, however, with the current economic climate, it is uncertain when these reforms will be put in place.
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