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The 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 the building.
  • 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 landlord.
  • 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.
2 Commonhold

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 be members.

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 not qualified.

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