Predictions for commencement dates

posted by daniel@lease-advice-bureau.co.uk
Date:  04/06/2024
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The Leasehold and Freehold Reform Act 2024 has been enacted and can be viewed in its full published form via the following link: https://www.legislation.gov.uk/ukpga/2024/22/contents/enacted

Although it is an Act of parliament the provisions are not yet effective, and will not be brought into operation until after the next general election and a new government is formed. As per the standard parliamentary mechanisms, the provisions of the Act can be brought into effect by piecemeal or all in one go, however due to the complexities with regard to certain aspects – most notably the setting of capitalisation and deferment rates – it is highly likely that some provisions will be brought in advance of others.

Due to this, it is a reasonable speculation that some of the most impactful reforms may not take effect until 2025. There is also the possibility that there may be some provisions within this Act that will not be brought into effect at all – an example of such are the Right to Participate provisions for Enfranchisement (RTE) as found within the Commonhold and Leasehold Reform Act 2002, which were never brought into effect, which incidentally the 2024 Act seeks to remove entirely (Part 4 of Schedule 8)

There are some less complex provisions that have a greater certainty of being passed before others, such as the removal of the current 2-year ownership qualification for the purchase of houses as well as the extension of leases.

There may therefore be several ‘commencement dates’ as opposed to a singular one. This ambiguous position leaves many property owners and their advisors in quite a quandary as to whether to wait for the changes to be implemented or to proceed ahead. For any statutory claims still in process a withdrawal under the current regime often will bar the leaseholder for re-commencing for 12 months, while this restriction will be abolished, it remains to be seen whether the lifting of such restriction will operate retrospectively. More news as it unfolds.

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