Service charges and other issues
A guide to service charges, administration charges, ground rent, recognised tenants associations and forfeiture.
24 June 2022
Ahead of the new legislation coming into force, banning ground rent from 30 June 2022, the UK and Welsh Governments have issued statutory enforcement guidance and guidance for leaseholders, landlords and agents.
In April 2022, the UK Government’s Leasehold Minister, Lord Stephen Greenhalgh said, in announcing the date the law would come into force:
“This is an important milestone in our work to fix the leasehold system and to level up home ownership.
Abolishing these unreasonable costs will make the dream of home ownership a more affordable reality for the next generation of home buyers.
I welcome the move from many landlords who have already set ground rent on their new leases to zero and I urge others to follow suit ahead of this becoming law.
The move forms the first part of the government’s reform package that will make homeownership cheaper, fairer and more secure.”
On 23 June 2022, Julie James, Welsh Minister for Climate Change said:
“The Leasehold Reform (Ground Rent) Act 2022 will bring to an end for new leases the poor practices surrounding the charging of high and escalating ground rents by reducing the ground rents in new leases to a peppercorn.
The Act received Royal Assent earlier this year, following the approval of a legislative consent motion in the Senedd, and will be commenced on 30 June 2022.
….The commencement of this Act marks a milestone in the journey to a fairer and more equitable system for leaseholders. However, I recognise the impact of the Act is limited to new leases and work continues to bring about more ambitious changes for existing leaseholders, as exemplified by the recommendations of the Law Commission in this area. As I have stated previously, my intention is that joint England and Wales legislation is made to address the recommendations of the Law Commission on Enfranchisement and the Right to Manage, as well as reinvigorating Commonhold as a viable alternative to leasehold.
The UK Government remains committed to introduce further legislation during the current Parliament and I will continue to update Members as this work progresses.”
The Welsh guidance reflects the slightly different environment in Wales and is also made available in the Welsh language.