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Leasehold and Freehold Reform Act 2024 timeline for implementation

Leasehold and Freehold Reform Act

The Leasehold and Freehold Reform Bill received Royal Assent on 24 May as part of the “wash-up” before the election, becoming the Leasehold and Freehold Act 2024t.

However, the provisions needed to cap ground rent were not added to the Bill before the election was called, despite it being a 2019 eleciton manifesto commitment from the Conservatives.

In the briefing notes to the 2024 King’s Speech, the Labour government said that it would “act quickly to provide homeowners with greater rights, powers and protections over their homes by implementing the provisions of the Leasehold and Freehold Reform Act 2024”. This would suggest that the new government will implement the Act fairly soon. They also committed to “tackling existing ground rents”, without giving any specifics, in a new Leasehold and Commonhold Reform Bill.

This post sets out where we are on the road to the implementation of the Leasehold and Freehold Reform Act 2024, and answers key questions about the status of leasehold and commonhold reform.

>> Related Post: Practical guide to the Leasehold and Freehold Reform Act

>> Related Post: What will be in the new Leasehold and Commonhold Reform Bill?

Last updated: 18 July 2024

What happened with the Leasehold and Freehold Reform Bill?

The Leasehold and Freehold Reform Bill received Royal Assent, becoming Leasehold and Freehold Reform Act 2024.

Will leasehold reform happen in 2024?

The Leasehold and Freehold Reform Bill is now the Leasehold and Freehold Reform Act 2024. However, the actual reforms will not happen until the Act is implemented, and that will be the decision of the whichever party is elected on 4 July.

Government Minister Baroness Scott confirmed in a letter dated 15 April 2024 that they “anticipate that the majority of reforms will come into effect in 2025 or 2026”.

The new Labour government said in the King’s Speech briefing it would “act quickly” to implement the provisions of the Leasehold and Freehold Reform Act 2024.

The briefing notes to the King’s Speech also state they will “further reform the leasehold system, enacting remaining Law Commission recommendations relating to leasehold enfranchisement and the Right to Manage, tackling unregulated and unaffordable ground rents, and removing the disproportionate and draconian threat of forfeiture as a means of ensuring compliance with a lease agreement”.

What happened to the replacement of leasehold with commonhold?

The Leasehold and Freehold Reform Act doesn’t include provisions to replace leasehold with commonhold for flats, even though Michael Gove had referred to leasehold as “unfair” in an interview with the Sunday Times in January 2023, and “an outdated feudal system that needs to go”.

The replacement of leasehold with commonhold was not in the Conservative Party 2019 manifesto and was seen as too complex to include in the Leasehold and Freehold Reform Bill.

The Labour government listed a “Draft Leasehold and Freehold Reform Bill” in the 2024 King’s Speech, which will include provisions to “reinvigorate” commonhold by “modernising the legal framework”, making commonhold the default tenure.

>> Related Post: What will be in the new Leasehold and Commonhold Reform Bill?

Does the new Leasehold and Freehold Reform Act affect existing leases?

Yes, the Act affects both new and existing leases as it amends the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993.

Section 70 of the Act specifically states that each section of Part 3 of the Bill, which regulates leasehold, has effect in relation to a lease “whether the lease was entered into before or after the section comes into force”.

What’s the situation with the restriction of ground rent?

The Conservative government launched a consultation into the restriction of ground rent at the end of 2023, which closed on 17 January 2024. After much lobbying on both sides, the Conservative government never published the outcome of the consultation on ground rent. No amendments to restrict ground rent were added to the Bill before it received Royal Assent.

In the 2024 King’s Speech briefing notes, the Labour government said they would “tackle” existing ground rents by “regulating ground rents for existing leaseholders so they no longer face unregulated and unaffordable costs”. Unlike the 2024 Conservative manifesto, which referred to capping ground rents at £250, Labour have not given any specifics on exactly how they plan to “tackle” ground rents.

>> Related Post: Guide to ground rent reform

When are the new leasehold reform rules likely to come into effect?

Although the Leasehold and Freehold Reform Act 2024 has received Royal Assent, it still needs to come into force. Section 132 of the Act states that most of the provisions of the Act will come into force “on such day or days as the Secretary of State may by regulations appoint”. The Secretary of State may also make transitional provisions.

As parliament was dissolved ahead of the general election, it will be for the Secretary of State of the new government to draft and lay the secondary legislation (ie the regulations) necessary to bring the reforms into force. these regulations, which will take take time.

The Labour government have committed to “acting quickly” when it comes to the implementation of the Leasehold and Freehold Reform Act, which suggests that it may come into effect by the end of 2024 or early 2025.

Timeline for the Leasehold and Freehold Reform Act towards implementation

In the timeline below, I show the key milestones for the Leasehold and Freehold Reform Bill to becoming law and being implemented:

27 November 2023

The name of the Leasehold and Freedhold Reform Bill was read out in the House of Commons.

11 December 2023

Michael Gove speaking during the Second Reading debate of the Leasehold and Freehold Reform Bill

This was the first big step in the Bill’s journey through parliament when MPs debated the Leasehold and Freehold Reform Bill for the first time. It took place on 11 December 2023.

16 January to 30 January 2024

The Committee Stage started by hearing oral evidence from a wide selection of witnesses before moving through a line-by-line analysis of the original text and amendments tabled by the government and opposition parties.

It concluded on 30 January 2024.

27 February 2024

Leasehold and Freehold Reform Bill Report Stage in House of Commons

At the Report Stage, MPs debated and voted on amendments and new clauses to the Leasehold and Freehold Reform Bill from both the Government and the Opposition. The Third Reading followed shortly afterwards, and these remaining stages in the House of Commons were both completed on 27 February.

28 February to 24 May 2024

Lord Gascoigne - Leasehold and Freehold Reform Bill wash-up

The whole process started in the House of Lords, with the First Reading taking place on 28 February, the Second Reading on 27 March and the Committee Stage ending on 1 May.

The Bill finished the remaining stages in the Lords as part of the “wash-up” on 24 May, before parliament was prorogued ahead of the General Election.

24 May 2024

Royal Assent shown by the Royal Insignia

The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024.

2025 / early 2026?

The Leasehold and Freehold Reform Act 2024 comes into force

The Act will come into force “on such day or days as the
Secretary of State may by regulations appoint”.

This is likely to be in 2025 or early 2026.

Last updated: 18 July 2024

hourglass with Leasehold and freehold reform bill timetable what happens when
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