The King’s Speech on 17 July 2024 promised a number of changes to the current state of leasehold and rental law – some of which we have covered in previous articles. Here we will discuss the proposed changes to No-Fault Evictions under section 21 of the Housing Act 1988.

Currently, once the contractual term of an assured shorthold tenancy ends, landlords can evict tenants without providing any reason. They just need to serve a “Section 21” notice on their tenants, providing a minimum of 2 months’ notice and satisfy certain pre-conditions. If the tenant does not leave during the notice period, they can issue court proceedings to obtain possession. Proceedings for possession cannot be commenced less than six months after the s.21 notice is given (with exceptions).

The King’s Speech confirmed that the government will ban no fault evictions as part of the Renter’s Rights Bill. This is part of a plan to give greater rights and protection to people renting their homes.

The Bill is currently at the report stage in the House of Commons, having had its first and second readings and has now passed through the committee stage with some amendments.

The Leasehold and Freehold Reform Act 2024 received royal assent in the wash up just prior to the election.
 
It included some of the changes around the rights of leaseholders of flats and houses to obtain extended leases and the freehold that The Law Commission had recommended, i.e. providing for leases to be extended by 990 rather than 90 years, doing away with the need to have owned for two years to qualify for an extended lease and bringing more buildings within the right to enfranchise or manage by increasing the threshold of non-residential parts from 25% to 50%.

As we have discussed in our previous articles, it was announced in the King’s Speech that the Government’s legislative programme would include draft legislation on leasehold and commonhold reform: the “Draft Leasehold and Commonhold Reform Bill.”

This implied that the Government might leave the previous Conservative Government’s legislation, The Leasehold and Freehold Reform Act 2024, on the shelf and perhaps implement a wider set of reforms consolidating the existing law following the recommendations made by the Law Commission.

In this second article in our series of three we look at what it means for residential leaseholders and their landlords following the Government’s confirmation that it will enact the remaining Law Commission recommendations around enfranchisement rights (leaseholders rights to extend their lease or acquire the freehold to their house or block of flats).

The Law Commission’s recommendations are set out in its report “Leasehold Home Ownership: Buying Your Freehold or Extending Your Lease”. The stated intention of the recommendations was to “help make our homes our own rather than someone else’s asset. They are intended to make the law work better for leaseholders”. Their report was described as a root and branch review of enfranchisement rights.

In this, the first of a series of three articles, we look at what it means for residential leaseholders and their landlords with regard to enfranchisement rights (leaseholders rights to extend their lease or acquire the freehold of their house or block) now that the Government has stated that it will implement the provisions of the Leasehold and Freehold Reform Act 2024.

The King’s Speech of 17^th July 2024 announced that the Government’s legislative programme would include draft legislation on leasehold and commonhold reform: the “Draft Leasehold and Commonhold Reform Bill.”

This implied that the Government might have in mind leaving the conservative’s legislation, The Leasehold and Freehold Reform Act 2024, on the shelf and perhaps implement a wider set of reforms and consolidate the existing law following the recommendations made by the Law Commission.

The Sunday Times reports that Michael Gove, the Levelling Up Secretary, has prepared a Leasehold Bill for inclusion in the King’s Speech.

In view of past government statements this could have important ramifications for residential leaseholders and their landlords.

Earlier this summer Mark Loveday of Tanfield Chambers was successful in the Court of Appeal on a key point which could affect hundreds of thousands of existing shared ownership lessees and more in the future.

The case of Avon Ground Rents v Canary Gateway concerned the lessees of Canary Gateway and their lengthy attempt to take over the management of their building using the Right to Manage process. They started their claim in 2019 pre covid and several First Tier Tribunal and Upper Tribunal decisions later found themselves in the Court of Appeal on this specific point.

A new Bill which will fundamentally change the way renting residential property in the UK works is currently going through its second reading in the House of Commons.

If enacted, Assured Shorthold Tenancies will be scrapped and all new tenancies will be Assured Periodic Tenancies. The Section 21 ”No fault” process for recovering possession will no longer exist and so landlords will only be able to recover possession by using the existing Section 8 procedure and proving their ground for recovery of possession.  It is proposed that new grounds for recovery of possession will be added including where the landlord wishes to sell the property.

The Building Safety Act 2022 (the Act) came into force on 28 June 2022. It created new financial protections around the cost of remediation of historical safety defects for leaseholders of buildings at or above 11 metres or five storeys with historical safety defects.

While flat owners who benefit from this protection will welcome this unfortunately there are problems around the conveyancing process as it adjusts to the effect of the complex new rules which may adversely affect the sales process and the Government overlooked the effect of the legislation on flat owners extending their leases.

The Right to Manage (RTM) was introduced in 2002 giving flat owners a no fault right to collectively take over the management functions in respect of their building.

Leaseholders, acting via an RTM company, can take control of services, repairs, maintenance, improvements, and insurance in respect of their building.