Overview

The Leasehold Reform Bill aims to improve the rights and protections of leaseholders in England and Wales, particularly regarding major works, service charges, and the ability to buy back a share of their property. It increases tenant involvement in decisions about property maintenance and introduces regulations concerning sinking funds.

Description

This bill makes several key changes:

Tenant Involvement in Decisions on Works:

The bill significantly strengthens tenants' rights regarding major works. Landlords must now provide detailed cost estimates, consult on specifications and tenders, allow tenants to propose alternative contractors, and hold ballots on counter-proposals. Transparency is improved through public access to consultation details.

Service Charge Limits:

The bill limits individual tenant contributions to major works to £12,000 per year, payable in manageable monthly installments not exceeding £250.

Right to Buy Back a Share of Property:

The bill mandates that the Secretary of State create regulations allowing tenants to buy back a portion of their property from local authority landlords after a specified period of lease ownership. The exact proportion and timeframe are to be determined by the Secretary of State through regulations.

Sinking Funds:

The bill requires the establishment of sinking funds for all new residential leases granted by local authorities. These funds will be used to finance future property maintenance, ensuring a readily available source of funds for necessary works.

Government Spending

The bill's impact on government spending is not directly specified, but implementation may involve costs associated with establishing regulations, monitoring compliance, and potentially resolving disputes. There is a potential for increased government spending based on potential buy-back schemes, although the precise cost is unknown.

Groups Affected

• Leaseholders: Gain greater control over major works and service charges, potentially reducing financial burdens and improving transparency.
• Landlords (particularly local authorities): Face increased obligations regarding consultation, transparency, and financial management, potentially increasing administrative costs.
• Residential Property Tribunals: May see an increase in disputes and subsequent adjudications under the revised system.

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