Will I lose my assets if I divorce my spouse?
There is a misconception in divorce cases that you will lose half of your...- 20 November 2024
Posted: 07 June 2024
In one of the last acts of Parliament before it was closed ahead of the upcoming General Election, The Leasehold and Freehold Reform Act received Royal Assent and will be coming into effect over the next coming months.
The new legislation aims to address longstanding issues within the current property market. This will provide greater protection for leaseholders and simplifying the process acquiring freeholds.
One of the most significant changes is banning the sale of new houses as leasehold properties. From 2024 onwards, all new build houses must be sold on a freehold basis. This reform seeks to eliminate the controversial practice of some developers who sell houses with escalating ground rents. This has been a major concern and grievance for many homeowners and is a welcomed change.
The Act streamlines the process for leaseholders to acquire the freehold or to extend their lease. This includes reducing the cost and complexity of enfranchisement and lease extensions. In turn, making it more accessible and affordable for leaseholders to take control of their properties.
The Act increases the standard lease extension term to 990 years for houses and flats so that leaseholders have the right to more secure ownership of their property without the additional hassle and expense of future lease extensions.
The requirement that you own your property for two years before you are entitled to extend your lease has been abolished, giving leaseholders more security.
Leaseholders will have a clearer understanding of their service charges as freeholders and managing agents will be required to issue bills in a standardised format. There will also be a requirement to produce end of year reports detailing plans of major works. These changes will reduce the risk of large, unexpected costs for the leaseholder whilst also providing clarity on what they are paying for.
Leaseholders now have greater rights and are able to challenge unfair service charges and practices. The Act provides a stronger framework of guidance relating to resolving disputes between leaseholders and freeholders, ensuring better protection and fair treatment. Leaseholders can also now extend their lease or buy their freehold without having owned their house or flat for 2 years.
If you are a freeholder or a developer, you will need to adapt to these new regulations. In particular the shift towards freehold sales for new houses being built. Currently, the new legislation does not cap ground rents. However, various consultations and proposals including a potential cap of £250 were discussed for the future. There is predicted to be a surge in leaseholders now wanting to purchase their freehold or extending their lease resulting in additional costs for both parties.
The Leasehold and Freehold Reforms Act represents a landmark shift in the area of property law. This is aimed at creating a fairer and more transparent system for property ownership in the UK. Whilst the changes bring substantial benefits to leaseholders, they also require adjustments from freeholders and developers. As the new regulations come into effect, it will be crucial for all parties to stay informed and seek expert legal advice to navigate the dynamics of this evolving property market.
For further information and personalised legal assistance regarding the Leasehold and Reforms Act 2024. Please contact our Landlord and Tenant Team at THB Legal. Our experienced specialists are here to guide you through these changes and ensure your best interests are protected. Call 01245 493959 or send an email.
- 20 November 2024
- 20 November 2024
- 20 November 2024
