Ground rent reform clarity urgently needed

The ban on the sale of new leasehold homes is welcome but there can be no further delay in announcing ground rent reforms, the Law Society of England and Wales has warned.

The Leasehold and Freehold Reform Bill has its second reading in the House of Lords today.

“We support the addition of amendments to the Bill to restrict the sale of new leasehold houses,” said Law Society president Nick Emmerson.

“The provisions mean that, other than in exceptional circumstances, every new house in England and Wales will be freehold from the outset. Houses should be sold freehold unless there are specific reasons justifying a leasehold tenure.

“In the absence of current proposals to promote the use of commonhold tenure, we support the Law Commission’s 2011 proposals to reform freehold law which would enable houses on managed estates to be sold as freehold more easily. We would urge the UK government to include these proposals in this Bill.

“Proposals to make service charges clearer and the provision of information required for home purchases and sales are also welcome.”

“We are still awaiting the outcome of the Ground Rent Consultation. Recent speculation over scrapping the reforms only creates additional uncertainty for all those in the sector. We urge the government to bring forward their proposals as soon as possible to allow for proper scrutiny,” added Emmerson.

“The government should carefully consider retrospective provisions to cap ground rents in existing leases. The use of retrospective legislation could undermine the reputation of English law and merits further consideration.”


Leasehold and Freehold Reform Bill up for Lords debate today



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