New and Improved rights for long leaseholders which became law on 28 February 2005 - 4 January 2005.
A further package to improve long leaseholder rights is due to become law on 28 February 2005. These rights are contained in the Commonhold and Leasehold Reform Act 2002 and are brought out pursuant to commencement Order No. 5, Statutory Instrument No. 3056. To access this Statutory Instrument, click here.
To access the Commonhold and Leasehold Reform Act 2002, click here.
Changes are as follows:-
1. Leaseholders can choose their own Buildings' Insurance policy (section 164 Commonhold & Leasehold Reform Act 2002)
As long as leaseholders choose a policy which reflects the conditions in the Lease (if any), the sum insured covers the rebuild and any risks as provided by the freeholder's insurance for the property, such a policy will be acceptable in the eyes of the law. Leaseholders will, however, have to send a summary of the intended policy to the Freeholder fourteen days before the insurance renewal date.
2.'Unfair' forfeiture ended (section 167-9 Commonhold & Leasehold Reform Act 2002)
Freeholders will be stopped from seeking to evict long leaseholders over trial debts unless those debts exceed £350.00 and have been outstanding for over three years. Nevertheless, in order to issue a forfeiture notice upon the leaseholders, a freeholder will be required to obtain the approval of the First-tier Tribunal (Property Chamber) first.
3. Cost of buying the freehold through collective enfranchisement
The value of the freehold is now to be determined from the date on which the Notice of the Collective Enfranchisement is given to the Freeholder. This is an amendment to section 18(1) and Schedule 6 of the Leasehold, Reform Housing and Urban Development Act 1993.
4. Notice for leaseholders to pay Ground Rent must include specific information, otherwise leaseholders not liable to pay (section 166 Commonhold & Leasehold Reform Act 2002)
The Notice must include: (a) the amount due (b) the date the payment is due as specified in the lease or a different date. The date that payment is due should be more than 30 days from the date the leaseholder received the Notice and also less than 60 days from this date.
Commonhold and Leasehold Reform Act 2002 - 15 October 2004
This Act came into force on a gradual basis throughout 2003 by a series of commencement Orders. Its three main objectives are:-
(1) To give qualifying Leaseholders the Right to Manage their property through a Right to Manage Company.
(2) To change the qualifying criteria to enable more Leaseholders to purchase their property as a group. (This is called Collective Enfranchisement). It removes the requirement that at least two-thirds of the leaseholders must participate and that half must have lived in their flats for the last twelve months.
(3) To combine freehold ownership with managerial responsibilities so that Leaseholders can cooperate with each other to maintain the property in good repair and decoration. (This is called Commonhold). Its drawback, however, is that it only applies where the Freeholder and all Leaseholders have consented to convert their existing long leasehold into Commonhold. Such agreement is unlikely to be forthcoming which will make Commonhold a rare occurrence.