Ashley Nkemakolam, a trainee solicitor in our Residential Real Estate team, Secondment from Rayden Solicitors, explains the removal of the two-year ownership requirement.
As part of The Sherrards Training Academy, we have asked our Legal Assistants and Trainee Solicitors to write articles to support their learning, and also to ensure they start to build on their own personal brand. This article has been fact-checked and proofread by Head of the Residential Real Estate department, Caroline Vernon.
As of 31 January 2025, the Leasehold and Freehold Reform Act 2024 (LFRA 2024) introduces a significant change in leasehold law, offering considerable benefits to tenants seeking to extend their leases or purchase the freehold of their properties. One of the most impactful changes is the removal of the two-year ownership requirement, which has long been a barrier for leaseholders wishing to initiate claims for enfranchisement or lease extensions.
What Was the Two-Year Ownership Requirement?
Under previous legislation, tenants were required to have owned their leasehold property for at least two years before they could make a claim for:
- Enfranchisement (purchasing the freehold of the property).
- Lease extensions (extending the term of the lease).
This requirement often created unnecessary delays for tenants who had recently acquired their leasehold property but wanted to secure their long-term housing through enfranchisement or a lease extension. The time limit also meant tenants risked missing out on opportunities or face higher costs, as property values or lease extension premiums could increase during that time.
What Does the Removal of the Two-Year Ownership Requirement Mean?
From 31 January 2025, tenants will no longer need to wait for two years before they can make a claim for enfranchisement or a lease extension. This change simplifies the process and makes it quicker for leaseholders to secure long-term property rights.
For tenants who have recently acquired their properties, this is a significant benefit. They can now act immediately to secure their investments, without the delay and potential price increases tied to the previous two-year waiting period. By being able to act sooner, leaseholders could also potentially avoid higher enfranchisement premiums or increased lease extension costs that might have risen during the wait.
If you are a landlord or managing agent, this change will also impact how tenant claims are handled. Leaseholders can now initiate claims earlier than before, which may require updates to your processes.
The LFRA 2024 also introduces important changes for the personal representatives of deceased tenants. Under the previous rules, personal representatives were required to bring a lease extension claim on behalf of the deceased tenant within two years of the grant of probate. This two-year time limit for making claims has now been removed.
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.
