Radical changes proposed for leaseholders

The Law Society has proposed radical changes to leasehold regulations which could transform the rights of leaseholders.

The suggested reforms arose from what leaseholders described as onerous terms and conditions imposed by freeholders from which they had little chance of escape.


Thy have been protesting for years about they misleading way in which leases were sold to them when they bought their homes and they way in which some landlords repeatedly increase the ground rent payable and add unreasonable fees to the contracts which forced tenants into financial difficulty.

If the proposals go ahead leaseholders will have the right to extend their lease agreement to 990 years instead of the usual 90 or 50 years granted today.


Landlords would be banned from using the extensions to introduce more onerous conditions to the contracts and leaseholders would not have to pay ongoing ground rent.

The option to buy out the ground rent without necessarily having to extend their lease has also been proposed.

No waiting

Flat owners would be allowed to collectively buy the freehold with other leaseholders in the building straight away without having to wait until they have owned their property for two years.

The reforms also suggest that leaseholders should be free from the obligation of paying the landlord’s costs in such cases.


Any disputes should be settled solely by the Leasehold Valuation Tribunal, removing the need to involve the country court system and save both landlords and tenants money.

But where tenants reach an informal agreement, the Commission wants to see protection put in place to ‘protect leaseholders from being hit by onerous conditions or clauses that are designed to be profit-making for the freeholder’.

Not working

The commissioner for property law Professor Nick Hopkins said: “The leasehold system is not working for millions of homeowners in England and Wales.

“We have heard how the current law leaves them feeling like they don’t truly own their home.

Greater control

“Our reforms will make a real difference by giving leaseholders greater control over their homes, offering a cheaper and easier route out of leasehold, and establishing commonhold as the preferred alternative system.

“The reforms will provide a better deal for leaseholders and make our homes work for us, and not somebody else.”

Call for action

Mark Hayward, chief executive of NAEA Propertymark, said: “We have long called for action to be taken to help leaseholders who have been misled and treated unfairly so it is really positive to see the Law Commission’s report.

“For too long, housebuilders and developers have not been transparent enough about what it actually means to buy a leasehold property, which in turn has meant many owners have been faced with escalating ground rents and unreasonable fees, leading them into financial difficulty.


“It’s vital that the proposals laid out in today’s report lead to actions as soon as possible to give some hope to those who are currently trapped in leasehold properties with no easy route out.”

Housing minister Luke Hall said: “This Government is determined to improve transparency and fairness in the residential leasehold market to help thousands of leasehold homeowners up and down the country as well as future homebuyers.

“We are clear that the current system needs reform, which is why we asked the Law Commission to carry out this important work.

“We will carefully consider the Law Commission’s recommendations, which are a significant milestone in our reform programme, as we create a better deal for homeowners.”