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Law is changing - A better deal for leaseholders
The Commonhold and
Leasehold Reform Act 2002 reached the statute book on the 1st May 2002.
The changes introduced
by the Act will be brought into effect in stages. It is expected that
the whole Act will be effective by December 2003. Our information pack
includes details of which provisions are currently effective.
1 Leasehold Reform
- The eligibility
test for groups of leaseholders wishing to buy their freeholds ("to
enfranchise") is simplified. The residence test is abolished
and the requirement that at least two thirds of the leaseholders in
a block should participate is replaced with a requirement that participating
leaseholders must hold long leases on at least half of the flats in
- Comparable changes
are made to the rights for a flat leaseholder to buy a new, longer,
lease, provided he or she has held the lease for two years.
- A new right
enables leaseholders of flats to take over the management of their
building, without the need to prove shortcomings on the part of the
- Changes, favourable
to leaseholders, are made to the required payment of "marriage
value" on enfranchisement and lease extension.
- The Act provides
greater protection, for leaseholders, against unreasonable service
charges and other demands.
- The Act helps
those leaseholders who will not be able, or who may not wish, to convert
to Commonhold (see below).
- The requirement
for landlords to consult with leaseholders about major works is strengthened.
- The ability
of landlords to commence proceedings to bring a lease to an end early,
on breach of covenant, is restricted.
The Act introduces a new arrangement, for flat owners, called "Commonhold".
The Government intends that commonhold should combine the security of
freehold ownership with a regime which allows for the management of common
parts and facilities by commonhold associations of which flat owners would
3 The Future
The introduction of commonhold is likely to be increasingly felt over
the course of the years to come. However, the new law on enfranchisement
already provides opportunities for many leaseholders who have previously
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