Leasehold Reform Bill

Official Summary

A Bill to make provision about the regulation of the purchase of freehold by leaseholders; to introduce a system for establishing the maximum charge for such freehold; to make provision about the award of legal costs in leasehold property tribunal cases; to establish a compensation scheme for cases where misleading particulars have led to certain leasehold agreements; and for connected purposes.

Summary powered by AnyModel

Overview

The Leasehold Reform Bill aims to make it fairer and more transparent for leaseholders to buy their freeholds. It introduces a cap on the price, protects leaseholders from unfair costs, creates a compensation scheme for misleading sales practices, and launches an inquiry into leasehold practices.

Description

Freehold Purchase Price

The bill sets a maximum price for buying a freehold, calculated as a multiple of the annual ground rent, capped at ten times the annual ground rent. The specific formula will be defined by the Secretary of State.

Enfranchisement Costs

Leaseholders will no longer be responsible for costs incurred by the freeholder during the freehold acquisition process. This includes costs related to notices, investigations, title verification, conveyancing, and tribunal proceedings.

Compensation Scheme

A compensation scheme will be established for leaseholders who were misled into believing the freehold would be available at a specific price after a set period, only to find the actual price higher.

Inquiry into Leasehold Practices

An independent inquiry will investigate various aspects of leasehold ownership, including the prevalence of leasehold sales, the freehold market, relationships between developers and other parties, and the potential impact of government housing policies.

Government Spending

The bill will lead to increased government spending due to the establishment and operation of the Enfranchisement Compensation Scheme. The exact figures are not specified in the bill but will depend on the number of successful compensation claims.

Groups Affected

Leaseholders: Potentially benefit from lower freehold purchase prices, protection from unfair costs, and compensation for misleading sales practices.
Freeholders: May experience reduced income from freehold sales and increased costs associated with the compensation scheme.
Developers: Subject to scrutiny by the inquiry and may face changes in practices due to the bill's provisions.
Solicitors and Conveyancers: Their practices will be examined by the inquiry.
Finance Companies: Their involvement in leasehold transactions will be investigated by the inquiry.

Full Text

DISCLAIMER: AI technology is not 100% accurate and summaries may contain errors, use at your own risk. Munro Research holds the copyright for all summaries found this website. Reproduction for non-commercial purposes is permitted but must be displayed alongside a link to this website. Contact info@munro-research to license commercially.