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Caroline Knowles-Ley

Chartered Legal Executive - Brighton & Hove

The Leasehold Reform (Ground Rent) Act 2022 receives Royal Assent

The Leasehold Reform (Ground Rent) Act 2022 receives Royal Assent

The Leasehold Reform (Ground Rent) Act 2022 received Royal Assent on 08 February 2022 and comes into force on 30 June 2022.

What this will mean?

The Leasehold Reform (Ground Rent) Act will limit the ground rent that can be charged on the extended term of any lease extension and most new residential long leases of flats and houses, to a ‘peppercorn’ (a very low or nominal) rent per year.  It also prohibits the charging of administration charges for peppercorn rents.

Exceptions

As usual there are exceptions – business leases, statutory lease extensions under the Leasehold Reform Act 1968 and the Leasehold Reform, Housing and Urban Development Act 1993, ‘Rent to Buy’ arrangements, Shared Ownership leases and Community Housing leases where the landlord is a community land trust or the lease is in a building controlled or managed by a co-operative society

The Act does not come into force in relation to retirement home leases before 01 April 2023. The Act does not apply to ground rent in existing leases.

Consequences of a failure to comply

Financial penalties apply if a new lease or lease extension is granted with an escalated ground rent or rent review provision.  Any person can be liable to be fined under the Act if the enforcement authority is satisfied beyond reasonable doubt that that person has breached the Act.  The case will first be dealt with through the local enforcement authority (local weights and measures or district council) and the First-tier Tribunal with a right of reply and appeal.  Fines can be a minimum of £500 up to a maximum of £30,000 and the enforcement authority has the ability to recover any rent which is prohibited by the Act from the person to whom it was paid.

We are here to help

If you would like advice regarding the Leasehold Reform (Ground Rent) Act or any other dispute resolution matters, please contact Caroline Knowles-Ley a member of Rix & Kay’s Dispute Resolution team based in Brighton & Hove. Caroline specialises in property litigation covering both residential and commercial landlord & tenant related issues including repossession and forfeiture, neighbour disputes such as boundary, rights of way, rights of light, trees, trespass and nuisance issues arising over a range of property related matters as well as dealing with the Trusts of Land and Appointment of Trustees Act 1996 claims. Tel: 01273 766917 or email: carolineknowlesley@rixandkay.co.uk

 

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