11th January 2022
The government has launched a public consultation on reforming the leasehold and commonhold system in England and Wales.
The consultation follows the recommendations made by the Law Commission in three reports with proposed legislative changes for leasehold enfranchisement, the right to manage, and commonhold.
In response, the Government has already announced changes to make the enfranchisement process simpler and cheaper, including 990-year lease extensions, and the creation of a Commonhold Council.
The consultation includes proposed reforms that would give significant numbers of leaseholders the power to buy the freehold of their property or take over the management of their buildings.
The consultation seeks views on a number of proposals, including:
Reforms to leasehold enfranchisement and the right to manage
- Raising the non-residential limit from 25% to 50% for collective freehold acquisitions, to ensure more leaseholders qualify for enfranchisement rights
- Raising the non-residential limit from 25% to 50% for right to manage claims, to ensure more leaseholders are able to take over the management of their buildings
- Understanding the impact of a non-residential limit at 50% for individual freehold acquisitions (which relate to a single building, such as a where a house is converted into flat and a shop)
- Introducing mandatory leasebacks to landlords of non-participating units, as part of the collective enfranchisement process, in order to reduce the cost of enfranchisement
- Consequential amendments to voting rights in Right to Manage companies, ensuring that leaseholders continue to have effective control of decisions made under the right to manage, while maintaining involvement from the landlord
Reforms to Shared Ownership voting rights in England, in commonhold developments
- Where Shared Ownership providers are responsible for paying for repair and maintenance during the ‘Initial Repair Period’, they should have the right to vote on matters relating to these works and their costs
- Where Shared Ownership providers wish to delegate this right over decision making to the shared owner, they should be able to do so
Reforms to the provision of information for the sale of a commonhold property
- What the maximum fee for issuing a Commonhold Unit Information Certificate should be
- If the deadline for issuing the Commonhold Unit Information Certificate is missed, whether the sanction should be that no fee is payable
This consultation will run for six weeks until 22nd February 2022, and views can be sent online or via email to leasehold.reform@communities.gov.uk
