We now have the publication of the Law Commission’s long awaited consultation on its proposed changes as these will affect the law relating to buying your freehold and extending your lease. You will note that even in the title they do not use the word ‘enfranchisement.’

A summary of the key changes appears at http://www.leaseholdreformnews.com

In their own words, “the Law Commission has indicated a series of radical reforms designed to provide a better deal for leaseholders who want to purchase the freehold or to extend the lease of their home.”

The proposals would:

• Make the process (known as “enfranchisement”) easier, cheaper and quicker
• Improve and enhance the rights of leaseholders to buy their freehold or extend their lease

• Introduce a simpler unified procedure for houses and flats
• Remove limitations on the right to enfranchise, including the requirement that leaseholders must have owned their property for two years before making a claim

In addition, at Government’s request, the Commission has provided options to reduce the price payable by leaseholders to buy the freehold or extend their lease while ensuring sufficient compensation is paid to landlords to reflect their legitimate property interests.

These proposals are open for consultation until 20th November 2018 and all interested parties would be well advised to visit their website http://lawcom.gov.uk to view further details and to make comments on some of the 198 questions that they pose.

Law Commissioner Professor Nick Hopkins said:

“The current system is complex, slow and expensive and it’s failing homeowners. Many feel that they are having to pay twice to own their home.

“Our proposals would make it easier and cheaper to buy the freehold or extend the lease of their home, ensuring the system works for ordinary homeowners across the country.

The enfranchisement system has often been criticised as being too costly and difficult for leasehold homeowners to understand and implement to their advantage. It is also seen as being complicated, being the product of over 50 Acts of Parliament, totalling hundreds of pages. There are numerous examples of this, for instance the different rules for leaseholders of houses and flats.. a subject about which I could go on.

We know that the Ministry of Housing, Communities and Local Government (MHCLG), and by the Welsh Government, has asked the Law Commission to propose reforms that would promote transparency and fairness in the residential leasehold sector and provide a better deal for leaseholders as consumers. This puts a pro-consumer slant on the proposed reforms and focuses (perhaps controversially) on reducing the premiums that freeholders would receive.

There is going to be a lot of debate about this subject and I look forward to the output from the consultation when this is finished and the eventual report and recommendations from Law Commission which are anticipated during 2019. One thing that is certain is that there is going to be change, however, in my view it is going to be some time before these changes are likely to come in because any report will then need to go to parliament for it to consider how best to adopt these recommendations and for any draft legislation to go through parliament.

Mark Chick

20th September 2018

If you would like to discuss an enfranchisement issue, or contact Mark Chick please email leasehold@bishopandsewell.co.uk. If you require legal advice please visit http://www.bishopandsewell.co.uk