Leasehold Reform (Ground Rent) Act 2022

Shabnam Ali-Khan (1)
Shabnam Ali-Khan
2 min Read

The Leasehold Reform (Ground Rent) Act 2022 received Royal Assent on 8 February 2022. It is expected to come into force in six months.

It follows what has been termed the 'ground rent scandal' seeing many residential leaseholders effectively trapped in leasehold properties with onerous ground rent clauses. Some leaseholders have been unable to sell especially where lenders refuse to lend on genuinely onerous ground rents.

The legislation will abolish the right for landlords to request a ground rent for certain residential leases granted after its implementation. There are various exceptions to this including those leases which are extended pursuant to the Leasehold Reform Housing and Urban Development Act 1993 (the right for a leaseholder of a flat to extend their lease by an additional 90 years). Where a lease is extended on a voluntary basis (whatever parties agree) the landlord will no longer be able to charge a ground rent for the extended term. However the existing ground rent will continue for the remaining term of the original lease. How this will affect premiums for those leases extended on a voluntary basis only time will tell.

Every local weights and measures authority in England and Wales will have enforcement powers in relation to the new legislation. This will include the power to levy fines where a landlord is in breach of the law. The fine could be anywhere between £500 and £30,000.

Please contact the enfranchisement team if you wish to discuss the new legislation further as it will undoubtedly have a great impact on both landlords and leaseholders. 

Briefings Individuals & families Leasehold Reform (Ground Rent) Act 2022 residential leaseholder enfranchisement team Shabnam Ali-Khan landlords tenants