What does the Leasehold Reform (Ground Rent) Act 2022 mean for you?
14 July 2022 by Sarah Shea
The Leasehold Reform (Ground Rent) Act 2022 (the “Act”) came into force on 30 June 2022 as part of the Government’s reforms to make long leases fairer and more affordable. In the past, landlords have included unnecessarily prohibitive ground rents often increasing rapidly over a short space of time. This has made it very difficult for some leasehold owners to sell or re-finance their leasehold properties.
In essence, the Act requires all new residential long leases (those for a term of more than 21 years) granted for a premium to include a peppercorn ground rent. This includes lease extensions following the informal lease extension procedure (statutory lease extensions are still dealt with under the Leasehold Reform, Housing and Urban Development Act 1993). The Act also prohibits the landlord from charging administration costs in respect of the peppercorn ground rent.
The Act does not apply retrospectively and so does not apply to new leases or lease extensions completed before 30 June 2022.
Whether you are a freeholder or leaseholder looking to extend your lease, or a developer looking to sell on a long leasehold basis, Fisher Jones Greenwood LLP can assist. Simply contact Leon Pascal or Sarah Shea on 01245 890110 or [email protected]
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