UK Government launches major shake-up of leasehold laws
The UK government has announced a consultation on its latest and wide-ranging proposals to shake up leasehold and commonhold ownership within England and Wales.
In a statement, the government indicated that they are consulting on a number of Law Commission recommendations that would broaden access to enfranchisement (buying the freehold) and the ‘right to manage’ a building.
It is believed the proposals would increase the ‘non-residential limit’ from 25% to 50%, allowing leaseholders in buildings with up to 50% non-residential floorspace to buy their freehold or claim a right to manage.
The news advisory by both the UK and Welsh governments state that they have considered the Law Commission recommendations.
The UK and Welsh governments have considered these Law Commission recommendations and agree in principle that these proposals would fulfil our stated aims to broaden access to enfranchisement and the right to manage and reinvigorate commonhold as a future tenure. We are consulting to ensure that those affected by these proposals have an appropriate opportunity to share their views on the impact of these changes before final decisions are made.
On Commonhold, the government indicated that they are considering how shared ownership products could work in commonhold settings; and the provision of information for buying and selling a commonhold property.
Both homeowners and the property industry are being invited to comment on the plans, which include key proposals to make it easier and cheaper for leaseholders to buy the freehold of their homes in mixed-use buildings, which are currently excluded from enfranchisement if non-residential takes up more than 25% of a building’s floor space.
The statement suggests that the governments are considering recommendations that allow leaseholders to require that a landlord take on leases for any non-participating units following a collective enfranchisement; the introduction of a non-residential limit for individual freehold acquisitions; and changes to voting rights in right to manage companies.
To summarise, the consultation specifically seeks views on :
The non-residential limit for collective enfranchisement;
The non-residential limit for right to manage claims;
A non-residential limit for individual freehold acquisitions;
The introduction of mandatory leasebacks as part of collective freehold acquisitions;
Commonhold voting rights in shared ownership properties; and
The provision of information during the sale of a commonhold property.
The full consultation can be found here.
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