12 Days of Christmas – Day 6

At the half-way point in our 12 Days of Christmas feature, we take a moment to look at the most significant reform in the in the living sector for decades: The Freehold and Leasehold Reform Act 2024. The Act received Royal Assent on 24 May 2024 and, when fully enacted, will herald significant changes for those living in, managing and investing in residential buildings. However, many of these changes require secondary legislation before they will come into force. Here's a recap of what is currently in force, and what is still to come.

Provisions already in force

1. A handful of changes have been made to the Building Safety Act 2022. These include:
• The ability for Right to Manage companies to apply for Remediation Contribution Orders to split costs of remediation amongst leaseholders (where their leases allow);
• The repeal of section 125 of the Building Safety Act; and
• The notification of regulators where an Accountable Person under the Building Safety Act enters into insolvency; and
• Clarification of the costs that can be included in a Remediation Order or Remediation Contribution Order.
2. An amendment to the Law of Property Act 1925 to:
• prevent regulated rentcharge owners from taking steps to require payment without first having given the landowner 30 days' notice and certain prescribed information; and
• remove the ability of the owners of regulated rentcharges from enforcing their rights through any of the statutory methods in section 121 of the Law of Property Act 1925.

Provisions not yet in force

Most of the significant changes are not yet in force. The main ones to look out for are:

1. Banning the creation of long residential leases of houses (save for a few permitted exceptions);
2. Increasing the extensions to leases of residential flats and houses to 990 years (the current periods are 50 years for houses and 90 years for flats);
3. Removing marriage value from the calculation of payments on leasehold enfranchisement;
4. Increasing the percentages of non-residential floorspace allowable in collective enfranchisement and Right to Manage claims for mixed-use buildings;
5. Removing the 2-year ownership requirement for enfranchisement claims (meaning that leaseholders will be able to apply to enfranchise as soon as they have acquired their lease);
6. Increasing the rights of leaseholders in connection with the calculation and recovery of service charges;
7. Increasing the regulation of estate management charges to put in place regimes comparable to service charge regulation for leaseholders; and
8. Allowing tenants to recover costs of certain proceedings relating to their leases from their landlords.

The Housing Secretary, Matthew Pennycook published a ministerial statement on 21 November 2024 which set out information about the current Government's intentions and timescales for bringing the outstanding elements of the Act into force, as well as proposals for fixing known defects in the current legislation.

If you have managed to read this far, here is your reward of a festive joke to get you in the Christmas spirit: What is Santa's favourite kind of pizza? One that is deep-pan, crisp and even!