Law Commission publishes terms of reference for leasehold enfranchisement and commonhold reform

Posted By: Jonathan Everett on 24th April 2018 | Category: Leasehold Enfranchisement & Disputes

Following the Government’s response to its consultation Tackling unfair practices in the leasehold market, on 18 April 2018 The Law Commission published terms of reference for leasehold enfranchisement and commonhold reform.

The general policy objectives for the reforms are:

To promote transparency and fairness in the residential leasehold sector;
To provide a better deal for leaseholders as consumers.

In relation to leasehold enfranchisement, this will include:

Simplifying enfranchisement legislation;
Considering the case to improve access to enfranchisement and, where that is not possible, reforms that may be needed to better protect leaseholders, including the ability for leaseholders of houses to enfranchise on similar terms to leaseholders of flats;
Examining the options to reduce the premium (price) payable by existing and future leaseholders to enfranchise, whilst ensuring sufficient compensation is paid to landlords to reflect their legitimate property interests;
Considering how to make enfranchisement easier, quicker and more cost effective (by reducing the legal and other associated costs), particularly for leaseholders, including by introducing a clear prescribed methodology for calculating the premium (price), and by reducing or removing the requirements for leaseholders (i) to have owned their lease for two years before enfranchising, and (ii) to pay their landlord’s costs of enfranchisement;
Bringing forward proposals for leasehold flat owners, and house owners, but prioritising solutions for existing leaseholders of houses.