Leasehold and Freehold Reform Act 2024
The question
To ask the Secretary of State for Housing, Communities and Local Government, with reference to the Written Statement of 21 November 2024 on Leasehold and Commonhold Reform, HCWS244, if she will list the flaws in the Leasehold and Freehold Reform Act 2024.
Answered by Matthew Pennycook
The Leasehold and Freehold Reform Act 2024 contains a small number of specific but serious flaws which would prevent certain provisions from operating as intended and that need to be rectified via primary legislation.
The Written Ministerial Statement made on 21 November 2024 (HCWS244) outlined two flaws regarding a loophole in the valuation scheme set out in the Act, and an omission on shared ownership lease extensions.
Primary legislation will also be needed to address the following flaws:
- Allow third parties to leases, such as resident-led management companies, to recover contributions toward their process costs in some instances. Without this change, these companies may be at risk of insolvency, which would be an unintended outcome of the reforms requiring landlords to pay their process costs;
- Correct an unintended constraint on landlords’ existing redevelopment break rights that applies in certain limited circumstances; and
- Correct technical cross references and make consequential amendments to ensure the smooth implementation of the Act.
The government will address these matters as soon as parliamentary time allows.
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