Doing so by prescribing the rates to calculate the premium, as well as by removing marriage value. Leasehold Reform in 2021: ... We at The Freehold Collective have been involved with the Law Commission’s process for leasehold reform from the start so the announcement was as ... or how the UK Courts would allow that to happen. This is big news in leasehold and in this is ‘Leasehold Reform News’ if ever there was…. For leaseholders of houses First, ground rents for new leases would be reduced to zero, which will effectively abolish the system. The merger is part of Bishop & Sewell’s continued planned expansion strategy and will strengthen its Private Client, Property, Family and Dispute Resolution practices, with a team of people perfectly aligned with its culture and values. 23/02/2021. At the time, the Government promised legislation by the summer of 2018. The combined firm will operate from Bishop & Sewell’s offices in Russell Square, London, WC1. 28th January 2021. Now the Law Commission has proposed a series of changes which will make it easier for people to buy the freehold or extend their lease. Share this page. Although we have had to close our office, our IT department has worked tirelessly to ensure that our staff are working remotely within a secure framework. As a full service law firm Glanvilles LLP provides legal services to both individuals and businesses. Registered office: Glanvilles LLP, First Floor, Langstone Gate, Solent Road, Havant, PO9 1TR. Some initial comments on these appear below: This is massive and will not be popular with freeholders to say the least. You have helped at all times...will always recommend you and your firm. Third-Party cookies are set by our partners and help us to improve your experience of the website. For those who have been following this story, this is the culmination of the journey that started with the commentary in the White Paper ‘Fixing our Broken Housing Market’ and then led to the paper ‘Tackling Unfair Practices in the Leasehold Market.’ After this we had the Law Commission’s extensive work on the proposed reforms in this areas which led to the publication of their output paper ‘Leasehold home ownership: buying your freehold or extending your lease’ published on 20th July of last year. There is also an indication that a calculator will be made available to determine claims, whether the ‘calculator’ is to apply to all claims, or just simpler or lower value claims remains to be seen. Millions of leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent, the Housing Secretary Robert Jenrick has announced. Legal advice should always be sought in relation to specific circumstances. An online calculator will be introduced to make it simpler for leaseholders to find out how much it will cost them to buy their freehold or extend their lease. Today’s announcement means that both house and flat leaseholders will now be able to extend their lease to 990 years with a ground rent at zero. Authorised and Regulated by the Solicitors Regulation Authority. Millions of leaseholders will be given a new right to extend their lease by 990 years Changes could save households from thousands to tens of thousands of pounds Elderly also protected by reducing ground rents to zero for all new retirement properties Millions of leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent, the Housing Secretary Robert Jenrick has announced today (7 January … To control which cookies are set, click Settings. I will come back to Glanvilles should I need legal advice for anything else and will recommend your company to friends and family. This is the first part of seminal two-part reforming legislation in this Parliament. Note that in valuation terms the premium for extending a lease by 90 years or by 990 years is not significant as your valuer can explain. Most of the consultations are still in the researching and consultation stage and there are many stages left before becoming law. It certainly will make it ‘cheaper’ to extend a lease or buy the freehold. All content was correct at the time of publishing. We’ve been here before – when the Commonhold and Leasehold Reform Act 2002 came into force, in 2003, but this time there does appear to be a willingness to recognise that unless it can be made fit for purpose and also the “industry standard” (and possibly also compulsory?) There is almost certain to be a challenge from the larger freeholders under Human Rights legislation or similar. We use cookies to optimise site functionality and give you the best possible experience. Comments Share. Many long leases specify an annual ground rent of a ‘peppercorn.’ A peppercorn rent is used in circumstances where it is deemed appropriate for there to be no substantive rent payable. The government are currently reviewing how to improve the leasehold system - but it is still not clear when these changes will be made. We simply cannot say. It was first thought that the bill would be coming into effect in the first quarter of 2021, with Junior Housing Minister Kelly Tolhurst (now no longer in her role) saying in mid-January that the government would introduce the bill “very soon”. Around 4.5 million leaseholders in England will be given a new right to extend their lease by 990 years at zero ground rent, under new reforms announced by the Government. The other more wider reforms might well take a lot longer – there is no draft bill for either of the proposals discussed in this note at the moment. Unfortunately, the current version of Commonhold is not sophisticated enough – and proper refinement for implementation may require other areas of law to be dealt with as part of this process. We will bring forward a response to the remaining Law Commission recommendations, including commonhold, in due course.’. Menu Leasehold reform legislation on the horizon Print publication. You have been invaluable in making the transaction of both properties as seamless as it could be. Leasehold Reform Today, the Housing Secretary Robert Jenrick has announced that in the next Parliamentary session, the laws relating to the extension [...] admin 2021-01-07T11:22:53+00:00 7 January 2021 | Litigation | Please let us know which of offices would most convenient for you? The Government intend to regulate the position between leasehold house owners and leasehold flat owners by allowing all leaseholders to extend their leases for 990 years with no ground rent payable. By Jeremy Greer. Government now plans to act and this announcement makes plain their desire to adopt a number of the Law Commission’s recommendations, although what is also clear is that they plan to do this in two stage, the first most likely to be to take steps to ban ground rents and the second to pave the way for more comprehensive leasehold reform. Since January 7 th, the Leasehold Sector has been recovering from an impromptu and knee jerk government press release, regarding their intention to reduce the costs of lease extensions and enfranchisements for leaseholders. Government’s proposals for leasehold reform; Government’s proposals for leasehold reform. None of this is law yet, nor is it certain when it will be. Leasehold Reform has been a topic discussed by lawyers for years, yet very little has happened in the last few years. Our client centred approach involves understanding clients' needs, delivering practical legal solutions, offering a high level of technical expertise and providing a friendly and personalised service. The relevance to houses is a particular response to the so called ‘Leasehold Scandal’ of leasehold houses being sold by developers with onerous rent terms which in part have sparked the governments interest into reforming the law in this area. Government Announces Big Leasehold changes – 7th January 2021 Home - News & Events This is big news in leasehold and in this is ‘Leasehold Reform News’ if ever there was… Retirement properties will be included under these changes, despite the … Without details of all the changes speculation on the level of future premiums and the associated costs of any claim would be fanciful, Authorised & Regulated by the Solicitors Regulation Authority. Today’s changes mean both house and flat leaseholders will now be able to extend their lease to a new standard 990 years with a ground rent at zero. Right in the middle of Brexit, we have an announcement from MHCLG that Robert Jenrick as Housing Secretary plans to get government to act on the proposed reforms to residential leasehold. However, it is unlikely that this will happen quickly even with the drive for reform, meaning that new changes would not become law for perhaps 2-6 years, if not longer. Under the current law freeholders can increase the amount of ground rent with little or no benefit seen to those faced with extra charges. I had no idea what to expect as I'd not been in this situation previously and Laura explained everything in detail and provided ample opportunity for questions and queries; Laura is obviously very experienced and knowledgeable in her field of expertise....Laura responded to my communications on every occasion and resolved the issue in a timely manner. On 3 March 2021, Chancellor Rishi Sunak announced a raft of plans and policies to support people and businesses through (what are hopefully) the final stages of the Covid-19 pandemic. It does not deal with the valuation or legal process. On the face of it, your rights remain as they are, and we are not clear what changes are to be made that will influence (if at all) the calculation of the premium payable to buy the freehold, A. We set out below some comments and observations on the current proposals in order to put them into context and which we hope will be useful. An industry-wide cross sector committee would be very welcome to iron out the issues and to set the frame for other reforms that may be needed to make it work. These include questions you may have about the services we cover, our team of solicitors, legal fees and more. 10th January 2021 Leave a Comment Written by Jason Winton. The announcement notes: ‘Legislation will be brought forward in the upcoming session of Parliament, to set future ground rents to zero. That could well delay progress. Leaseholders call for no delays on implementing the new legislation By Myra Butterworth For MailOnline Published: 02:41 EDT, 8 January 2021 | Updated: 03:54 EDT, 8 January 2021 Perhaps the ground rent change (for new leases only) will come into effect in the next 1-2 years. There is certainly an indication of a cap on the ground rent payable. It is critical to note that if you do withdraw you cannot make a further claim within a year of the date of withdrawal. Karl Anders, Louise Power and Sandip Singh, Walker Morris’ Housing and Banking Litigation specialists, explain The UK Government’s recent announcement that legislation to significantly reform leasehold property ownership is on the horizon. The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice, and should not be relied upon as advice. These cookies enable core website functionality, and can only be disabled by changing your browser preferences. Bearing in mind the non-neutral terms of reference that the Law Commission were given the proposals seek to redress the balance between landlords and tenants and show a big change of emphasis towards the tenant’s side of the equation. Removing or resetting your browser cookies will reset these preferences. Providing beautifully straightforward legal advice. The Partners of Bishop & Sewell and Monro Wright & Wasbrough are delighted to announce the merger of their two firms, with effect from 1st February 2021 and the newly combined practice will operate as”Bishop & Sewell LLP incorporating Monro Wright & Wasbrough.”. However, the term of 990 years is certainly preferable to a 90 year extension. In addition, you will be required to pay costs to the other side and a proportion of our costs should you withdraw. So in other words, if you have a property affected by these issues you will most likely still need to take action now as the mere ‘prospect’ of reform is not likely to be something that will resolve any existing issues. If your lease is already below 80 years you should consider whether you can afford to sit and wait for the reforms to happen. So thanks once again for everything. The Commonhold Leasehold Reform Act 2002 was the last big legislative foray into reform in this area, which came into force in 2003. One of those reports, “Leasehold home ownership: buying your freehold or extending your lease” focused on leaseholders’ ability to extend their leases and enfranchisement rights. This will allow leaseholders to buy a freehold more cheaply. The detail is currently unclear, but possibly this may follow the Law Commission’s recommendations that any new rent could be imposed only during the existing lease term and might be subject to an overall cap. Current indications are that any new law will not come into force until 2021 at the earliest. It also appears that a cap will be set on the sort of ground rent that can be charged if lease is renewed outside of the statutory process. You can learn more detailed information in our Privacy Policy. Part of the focus of leasehold reform campaigners is to force estate agents to display comprehensive and accurate data on the leasehold properties that they are selling. VAT No: 333372670. Leases under 90 years can start to cause issues and issues, and leases under 80 years can … 3 Comments. On 7th January 2021 the UK Government issued a press release relating to proposed changes in legislation concerning the rights of leaseholders, in particular proposed legislation relating to leasehold enfranchisement (purchasing a freehold interest or extending a lease). All the best for your future". The technology to maintain this privacy management relies on cookie identifiers. You can make an enquiry by email, completing our online enquiry form or by calling us: © Bishop & Sewell LLP (OC319691). In general, the shorter the lease term the higher the premium. ", “I am just writing to express our thanks for the various advice's you provided and the efficient and professional way in which you executed matters relating to obtaining Probate on our late brother's estate and the sale of the property. For example, the calculation of ‘marriage value’ is one component of a valuation (see our information sheet 2). The government is abolishing prohibitive costs like ‘marriage value’ and set the calculation rates to ensure this is fairer, cheaper and more transparent. Corporate, Commercial and everything else, Services A cap will also be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder. ", "Thank you so much for providing us with such a swift and efficient service for the second time. Please note that they are selective extracts, and you must read the full text of the piece and the Law Commission’s proposals on their website. Click here for a full list of third-party plugins used on this site. The temporary Stamp Duty holiday, first announced by the Government on 8 July 2020, means that if you are buying a home to the value of £500,000 you will not pay any Stamp Duty. This is very welcome since it makes sense to move from the current 90 years for a flat lease. there will be no take up. Click here for a full list of Google Analytics cookies used on this site. The announcement states that this is part of a two-stage process of reforming the law with a response to the remaining Law Commission recommendations ‘in due course.’ That appears to indicate a longer time frame for the wider reforms. A. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Under Human Rights legislation or similar a cap on the ground rent and leasehold law by changing browser. The comments above as to the remaining law Commission in January 2020 the higher the premium you pay... Home ( Getty images ) Text settings either as this was ( and is the. Not deal with the valuation or legal process few years change ( for new leases only ) will come force! Like to thank her again for providing an excellent service comments above as to the law. 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