Key Facts

• Clause 1 removes the two-year qualifying period for enfranchisement rights.
• The current requirement results in higher costs as prices increase over time.
• Investors take advantage of a loophole to avoid the requirement.
• Clause 1 removes the two-year ownership requirement for leaseholders under the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993.
• The current two-year requirement was designed to prevent commercial investors from benefiting from enfranchisement rights intended for residential leaseholders but fails in this objective.
• Subsection (2)(c) and (3) of clause 1 are included by the Government, causing concern about the maintenance of personal representatives' rights after a tenant's death.
• Clause 2 aims to remove restrictions on repeated enfranchisement and extension claims.
• Leaseholders will no longer have to wait 12 months after a failed claim to submit another one.
• Courts' powers to prevent new enfranchisement or lease extension claims for five years are being removed.
• The clause removes restrictions under the 1967 Act on repeated enfranchisement or extension claims within five years if a tenant has acted in bad faith.
• The Law Commission recommended freeholders should be able to apply for an enfranchisement restraint order, but the Government believes existing legislation is sufficient.
• Schedule 7 of the Bill sets a requirement that leases must have at least 150 unexpired years to qualify for certain provisions.
• Amendment would enable changes in premises excluded from collective enfranchisement rights.
• Changes would be subject to the affirmative resolution procedure.
• Approval required by both Houses of Parliament for England and Senedd Cymru for Wales.
• Clause 3 proposes increasing the non-residential use percentage from 25% to 50%.
• The amendment would allow the Secretary of State to amend section 4 of the 1993 Act by regulations.
• Recommendation 38 of the Law Commission’s final report on leasehold enfranchisement supports increasing the limit to 50%.
• Concerns exist about whether structural detachment rules may frustrate leaseholders' access to enfranchisement.
• Clause 3 aims to increase access to collective enfranchisement for leaseholders.
• The limit will be raised from 25% to 50% of floor space.
• This change impacts freeholders who may lose ownership but will receive compensation.
• Clause 4 concerns eligibility for enfranchisement and extension in specific cases.
• It repeals limitations on rights under the 1967 and 1993 Acts, including landlord's right to defend lease extensions or collective enfranchisement claims based on redevelopment.
• The clause implements recommendation 98 of the Law Commission’s final report on leasehold enfranchisement.
• Clause 4 ordered to stand part of the Bill.
• The discussion centres around Schedule 1 - Eligibility for Enfranchisement and Extension: Specific Cases.
• The amendment would apply to certified community housing providers who manage land for local communities.
• Certification is issued by an appropriate tribunal based on specific criteria defined in regulations made by the Secretary of State.
• Regulations must be approved by both Houses of Parliament before being enacted.
• Schedule 1 repeals blockers that enable landlords to block claims for lease extensions and freehold acquisitions.
• Compensation is paid to leaseholders only where the blockers are used in houses, not flats.
• Amendments exempt community land trusts from freehold acquisition to maintain affordability.
• The Secretary of State can define further types of community-led housing through regulations.
• The government has recently strengthened the national planning policy framework.
• Community-led housing is popular and often commands local support.
• Amendment 57 was agreed to.
• The amendment would provide exceptions where existing tenancy is a protected National Trust tenancy.
• Case A covers properties accessible to the general public managed by various entities.
• Case B applies to leases granted to former owners, relatives, or trustees of trusts including former owners.
• National Trust leaseholders will benefit from new lease extension rights, including a narrow exception for visitor attraction properties.
• The amendment allows the National Trust to make bespoke lease agreements when notable properties are gifted or acquired.
• Qualifying leaseholders must acquire all intermediate leases superior to their leases in collective enfranchisement claims.
• Leaseholders can choose to leave part of an intermediate lease in place if not all leaseholders participate.
• Clause 5 concerns the treatment of intermediate leases during collective enfranchisement.
• Schedule A1 replaces section 2 of the 1993 Act and incorporates five recommendations from the Law Commission's 2020 report.
• Amendment 127 aims to ensure that sub-leases created by a freeholder under leaseback contain provisions for service charge contributions.
• Clause 6 inserts a new leaseback right into the 1993 Act.
• It implements recommendation 21 of the Law Commission’s final report on leasehold enfranchisement.
• The clause aims to reduce premiums payable by leaseholders and increase affordability in collective freehold acquisition.
• The statement covers Clause 7 of the Leasehold and Freehold Reform Bill.
• It discusses extending lease lengths for leaseholders.
• No specific amendments are proposed but support is given for discussing improvements.
• Leaseholders of houses can currently claim one 50-year lease extension.
• Leaseholders of flats can claim a 90-year lease extension.
• Clause 7 increases the lease extension term to 990 years for both houses and flats.
• Landlords will receive compensation through a premium when granting a 990-year lease extension at peppercorn rent.
• Clause 7 changes the lease extension rights given to tenants from 50 years (houses) and 90 years (flats) to 990 years.
• Clause 8 works in conjunction with clause 7 to set ground rents at a peppercorn rate.
• The Law Commission recommended maintaining redevelopment break rights during the last 12 months of the original lease or the last five years of each period of 90 years after commencement of the extended term.
• The government's ground rent consultation closed last week.
• Members of Parliament are seeking clarity on the interaction between the Bill and the consultation recommendations.
• An updated impact assessment is needed to incorporate the value of the proposed reforms.
• The quantum involved in potential policy changes could be up to £25 billion or £27 billion.
• Leaseholders have been paying unconscionable ground rents for a long time.
• Clauses 7 and 8 are intended to address issues related to ground rents and lease extensions.