Leasehold and Freehold Reform Act: update on remaining provisions

The Leasehold and Freehold Reform Act 2024 (the “Act”) made it onto the statute books in the ‘wash up’ period prior to the dissolution of the last parliament, introducing a number of important changes for both leaseholders and landlords. However, several aspects of the Act did not come into force until much later and there are still some aspects which are yet to be determined.

On 24 July 2024, provisions relating to the remediation of unsafe buildings and the work of professional insolvency practitioners were applied. Further provisions relating to building safety measures came into force on 31 October 2024, allowing remediation orders to be made in respect of interim measures (e.g. waking watches or evacuation alarms etc.). This permitted the recovery of the costs of alternative accommodation through remediation contribution orders where leaseholders had been displaced from their homes on building safety grounds.

Remaining core provisions

There are still more measures to come before the Act has been fully implemented and the Government has now confirmed its intended sequencing of the remaining core provisions to be as follows.

• In January 2025, the Government intends to remove the ‘2-year rule’ whereby leaseholders must currently wait two years after purchase before exercising rights to extend their lease or buy their freehold.
• In Spring 2025, the Government intends to apply the Act’s ‘Right to Manage’ provisions as part of a coherent package to expand access and to reform its costs and voting rights. The aim is to allow more leaseholders in mixed use buildings to take over management from their landlords and to ensure that leaseholders making claims will, in most cases, no longer have to pay the freeholder's costs. The Government will also be looking to further consult on:
  1. The detail of the Act’s ban on building insurance remuneration.
  2. The Act’s provisions on service charges and on legal costs, with the aim to make it easier for leaseholders to challenge service charges they consider unreasonable. It will also require landlords to apply to the Court or Tribunal before legal costs can be passed back to leaseholders.
• In Summer 2025, the Government will consult on the valuation rates used to calculate the cost of enfranchisement premiums and to protect residential freeholders on private and mixed tenure housing estates from ‘unfair’ charges. The Government will also consult on implementing the Act’s new consumer protection provisions to ensure that homeowners who pay an estate management charge have better access to information to understand what it is they are paying for and the right to challenge the reasonableness of the costs at the first tier tribunal.

Secondary legislation

In addition to the steps outlined above, the Government will also be embarking on an “extensive programme of detailed secondary legislation” to support and supplement the primary provisions of the Act. The Government’s written statement to parliament stated:

“Whilst we appreciate that leaseholders will be frustrated at having to wait for secondary legislation, this government will not commence the Act in a half-baked or incoherent way that could risk detriment to leaseholders.”  

It is important to remember that the implementation of the new provisions are being adopted by a different Government to the previous Conservative administration which first proposed them, and therefore a different approach may be taken. The steps outlined above set out the new Government’s aims and ambitions for reform of the proposed provisions due to come into force. However, it may be subject to further change as consultation takes place and it is entirely possible that some of the proposals will be amended, watered down, or enhanced prior to those provisions being fully implemented.

The Hamlins Real Estate Disputes team has expertise in both commercial and residential matters and works with. We seek to obtain the best outcome possible for every client, no matter how big or small the issue may be. If you would like a conversation to find out how we might help you, please get in touch.