Overview

The Leasehold Reform Bill aims to increase leaseholders' rights and control over decisions concerning their properties, particularly regarding major works and service charges. It introduces greater transparency and tenant involvement in decision-making processes related to property maintenance and improvements.

Description

This bill makes several key changes to existing legislation:

• Tenant Involvement in Decisions on Works: The bill significantly enhances tenant involvement in decisions about major works. Landlords must consult tenants on proposed works, providing cost estimates and inviting alternative proposals. A ballot of affected tenants is required for counter-proposals supported by at least 25% of tenants, with the counter-proposal adopted if a majority votes in favor. Landlords must also provide reasons for proposed works and make consultation details publicly available for 10 years.
• Consultation on Secretary of State Proposals: The bill requires landlords to consult on any proposed measures or policies from the Secretary of State relating to housing management.
• Right to Buy Back a Share of Property: Local authority landlords will be required to allow tenants to buy back a proportion of their property after a specified period following the tenant’s initial purchase of the lease. The exact period and proportion will be determined by regulations set by the Secretary of State.
• Sinking Funds: The bill mandates the creation of sinking funds for all new residential leases granted by local authorities. These funds will be used to finance future works on the properties.
• Service Charge Limits: The bill introduces a cap on annual service charges; if a tenant’s contribution exceeds £12,000 in a year, the landlord must allow payment in monthly installments not exceeding £250.

Government Spending

The bill doesn't directly specify government spending figures. The implementation of the bill may incur costs associated with new regulations, potential legal challenges, and increased administrative burden for both local authorities and tenants. However, any cost implications are not explicitly stated in the provided text.

Groups Affected

• Leaseholders: Leaseholders, particularly long leaseholders, will benefit from increased rights, greater control over major works affecting their properties, and enhanced transparency regarding costs. They will also have the potential for reduced service charge burdens and the possibility of buying back a share of their property.
• Landlords (Local Authorities and Social Landlords): Landlords will face increased administrative burdens due to enhanced consultation requirements and the need to establish sinking funds. They will also incur costs associated with implementing the new regulations.
• Residential Property Tribunals: These tribunals may experience an increase in cases related to disputes arising from the implementation of the bill's provisions.

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