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Lords propose ‘fairer deal’ for shared ownership under leasehold reform
The House of Lords concluded its scrutiny of the Leasehold and Freehold Reform Bill and included amendments to cap costs imposed on tenants for remediation and making shared ownership fairer.
An amendment to publish a report on shared ownership, 999-year leases and the adoption of commonhold was included with a requirement for the Secretary of State to make proposals to “ensure a fairer deal for shared ownership leaseholders”.
It said this should be published within six months of the Leasehold and Freehold Reform Act passing, and include matters relating to lease extensions, to give shared owners similar rights to other tenants under current legislation as well as the right to extend leases to 999 years.
Lords also proposed that service charge liabilities be pro-rated according to the shared owner’s proportion of the equity.
A clause for leases on new flats to require the establishment of a residents’ management company was also tabled. This management company would be responsible for all service charge matters and all leaseholders will be given a share.
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Building safety and remediation
An amendment was tabled to extend current leaseholder protections in the Building Safety Act 2022 to “all leaseholders without qualification”.
Lords also proposed the introduction of a Building Safety Remediation Scheme “to ensure that residential blocks of flats with building safety risks are made safe, mortgageable and insurable at no cost to leaseholders or landlords”.
The amendment said remediation costs should be met by a developer or the principal contractor, and where not possible, by the building industry.
Lords also included an amendment to protect leaseholders from costs arising from the new building safety framework, proposing this be capped at £75.
A change to publish a report on building safety remediation within three months of the act passing was included in the bill.
The Lords said this should detail the progress made with building remediation with an update on the properties still awaiting works and give leaseholders access to “a robust and independent dispute resolution process”.
The Lords also proposed the government introduce a regulator for property agents.
The Leasehold and Reform Bill will now go on to the report stage to allow the Lords to examine the amendments.
A date has not yet been set for the report stage.