Jason Richardson

Solicitor

The Leasehold and Freehold Reform Act 2024 (Commencement No 2 and Transitional Provision) Regulations 2025 (SI 2025/57) (Commencement Regulations) were made on 22 January 2025 and come into force on 31 January 2025.

The Commencement Regulations bring into force section 27 of the Leasehold and Freehold Reform Act 2024 (LFRA 2024), which repeals section 1(1)(b) of the Leasehold Reform Act 1967 (LRA 1967) and section 39(2) of the Leasehold Reform Housing and Urban Development Act 1993 (LRHUDA 1993).

This means that, from 31 January 2025, the two-year ownership requirement will no longer apply to claims for the freehold or a new lease under the LRA 1967 or claims for a new lease of a flat under the LRHUDA 1993. Regulation 3 of the Commencement Regulations amends the prescribed forms of tenant’s notice for claims under the LRA 1967, to take account of this change.

So by way of a reminder the implications of this change are:

Assignments:  The need for a Seller to serve a notice prior to a sale as they have 2 years ownership and then assign the benefit to a Buyer is no longer necessary.  This was a high risk area for practitioners given if any errors were made the Buyer would have to wait 2 years before they could bring a claim in their own right. It should be noted that the notice does need to be served by the registered legal owner – so a new buyer will need to expedite at LR on the basis that any delay will prejudicial/cause financial loss to the proprietor. So there is still a need to keep an eye on the 80 year rule.

80 year Term:  It is still important to think about the 80 year marriage value point but the risk of dipping under whilst waiting for 2 years ownership is reduced.

Mortgage issues:  Any short lease terms with mortgage issues can immediately extend without any 2 year wait.

Ground Rent:  It also gives the right to immediate solving ground rent issues – no need to wait 2 years.

PRs:  Section 27 of LFRA 2024 also repeals sections 39(3A) and section 42(4A) of the LRHUDA 1993. With the removal of the two-year ownership requirement, it seems that there is no need for a special provision allowing a qualifying tenant’s personal representatives to bring a lease extension claim on behalf of the deceased’s estate within two years of the grant of probate. Property is vested in personal representatives without the need for registration (section 1, Administration of Estates Act 1925). However, the similar provision in section 6A of the LRA 1967 has not been repealed.

It is over 20 years since this point was last moved on – the Commonhold and Leasehold Reform Act 2002 initially amended the Leasehold Reform, Housing and Urban Development Act 1993 removing the “Residence Test” enabling companies to bring claims and ending the rather farcical inspections from large estate managers to check that the claims were valid –  checking fresh milk/electricity bills in the London flat and the argument that the country house’s electricity bill was as high as it was due to the cactus greenhouses in the country …. It did produce some amusing arguments though!!