The Leasehold & Freehold Reform Act 2024 – What now?

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We last updated shared ownership leaseholders on 7 March 2024 with a look at the proposed reforms, and specifically, the then Leasehold and Freehold Reform Bill.

Following an unexpected turn of events last week (the announcement of a general election on 4 July 2024) the Bill became law very quickly and is now the Leasehold and Freehold Reform Act 2024, as of 24 May 2024.

Whilst this is welcome news for leaseholders, there is still a little way to go.

So, what happens now?

The final content of the Act sets out what changes are coming, but the Act now needs to be formally commenced before the law itself changes. Until then, the existing law remains fully in effect.

On commencement, in respect of the Act, it should be noted that there are three tranches of clauses:

1. Clauses to commence on 23 July 2024 – there is a very small number of clauses which will automatically commence on 23 July 2024. These relate to building safety and estate rentcharges.
2. Clauses to commence without further detail – some of the clauses can be implemented without the need for further detail, such as the qualifying criteria for enfranchisement claims, including lease extensions, and legal costs clauses.
3. Clauses to commence with further detail needed first – some of the clauses will not be able to be implemented without secondary legislation first. This includes, for example, prescribing the rates for a lease extension or details of the new year end service charge report. It may be necessary for the Government to consult on these areas before secondary legislation is implemented with the detail.

The latter two types of clauses will require secondary legislation to formally commence the clauses. There are no timeframes currently in respect of when these clauses might commence, and given the impending election, it is possible that this process will take time. The election is very likely to slow the process down.

What does the Act mean for shared owners?

On the content of the Act itself, we will be bringing you – in the next month or two – a final summary of what is in the Act for shared ownership leaseholders, if and when it commences.

The Team at Commonhold and Leasehold Experts Limited

28 May 2024

THESE NOTES ARE INTENDED FOR GENERAL GUIDANCE ONLY – YOU MUST OBTAIN SPECIFIC LEGAL ADVICE and not rely upon these notes solely. Commonhold and Leasehold Experts Limited accepts no liability in the event that these notes are relied upon for a specific set of circumstances.