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Law Commission reforms cut price of purchasing freehold or extending leases

  • 20/09/2018
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Law Commission reforms cut price of purchasing freehold or extending leases
The Law Commission has proposed a series of reforms designed to enhance the rights of leaseholders to buy their freehold or extend their lease.


The reforms aim to make the process easier, cheaper and quicker, by introducing a simpler unified procedure for houses and flats and removing limitations on the right to buy leaseholds – known as enfranchisement.

The Commission has also provided options to reduce the price paid by leaseholders to buy the freehold or extend their lease, while ensuring sufficient compensation is paid to landlords.

The proposals, which are now open for consultation until 20 November 2018, would save leaseholders time, stress and money, reduce legal costs and help to prevent unnecessary disputes, the Commission said.

The system has been widely criticised as being too costly and difficult for leasehold homeowners as there are different rules for leaseholders of houses and flats.

Law commissioner professor Nick Hopkins said that the current system is complex, slow and expensive and it is failing homeowners.

He added: “Many feel that they are having to pay twice to own their home. Our proposals would make it easier and cheaper to buy the freehold or extend the lease of their home, ensuring the system works for ordinary homeowners across the country.

“We want to hear views from across the spectrum on how this complicated area of law can be improved.”


Reforms to promote transparency

Housing minister Heather Wheeler said that the government is committed to banning leaseholds for almost all new build houses and restricting ground rents to a peppercorn.

He added: “It’s also unacceptable for leaseholders who want to buy their freehold or extend their lease to be faced with overly complicated processes and disproportionate costs.

“I welcome the Law Commission’s proposals that have the real potential to help those leaseholders who are having to deal with these outdated practices.”

Welsh government housing and regeneration minister Rebecca Evans added: “There has been widespread criticism of poor practice in the use of leasehold in Wales, and I have been clear that the Welsh government will not support poor practice that has a negative impact on homeowners.

“This work is part of efforts to improve transparency and understanding for people who have leasehold agreements as well as those entering into leasehold transactions in Wales.”

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