Following Matthew Pennycook's November statement outlining the Government's plans to begin implementing the reforms from the Leasehold and Freehold Reform Act 2024 (the Act), The Leasehold and Freehold Reform Act 2024 (Commencement No. 2 and Transitional Provision) Regulations 2025 have been enacted to implement Section 27 of the Act.
For more information on the proposed timeline of changes under the Act, please see Devonshires' previous insight on the topic here: Leasehold and Commonhold Reform - An update
The Changes
Section 27 of the Act removes the ownership time limits on leasehold applications under the following two pieces of legislation:
- Leasehold Reform Act 1967 (the 1967 Act) – A leasehold owner of a house no longer has to wait two years from the date of their registration as owner before they can apply to acquire the freehold or extend the lease.
- Leasehold Reform, Housing and Urban Development Act 1993 – A leaseholder no longer has to wait two years from the date of their registration as owner before they can make an application for a lease extension.
Section 27 of the Act also removes the provision in the Leasehold Reform, Housing and Urban Development Act 1993 for personal representatives to make an application, however, this change is unlikely to be impactful as personal representatives can still make an application as registered leaseholders without the time limit.
In addition to implementing Section 27 of the Act, the regulations also make changes to the prescribed form of notices under the 1967 Act to accommodate the removed requirements.
The Impact
The effect of these changes is that new owners of leasehold properties will have a right on purchase to acquire the freehold of a long lease (under the 1967 Act), or extend their lease terms. This should also lessen the practice of sellers serving notices under the Acts ahead of a sale (and then assigning the benefit of the right).
The Government's intention behind this change is to make it easier and simpler for leaseholders to exercise their rights under these Acts so there is potential for the reduced requirements to result in applications being more common.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
