What is The LFRA Act?
The new LFRA Act is an new piece of legislation that was passed obtained Royal Assent on 24th May 2024 which offers new and fairer policies for leasehold properties.
Regulated Rent charges and their enforcement
The act introduces a new definition to regulated rent recharge which is a new concept to be added to the Law of Property Act 1925 (LPA 1925).
A rent charge is any annual or other periodic sum charged on or issuing out of land, except rent reserved by a lease or any sum payable by way of interest
The new regime sets out an enforcement rule that helps the recovery of regulated rent recharge arrears. The act also removes the statutory remedies held in section 121 of the LPA on and after 27 November 2023.
The new regime is being added to Section 113 of the LFRA 2024 which came into force on 24 July 2024 and effect regulation rent charge before or after this date.
Ban on new leasehold houses
The LRFA 2024 will prohibit the grant of new long residential leases of houses in England and Walkes, except for certain permitted leases.
Permitted leases are split into two categories:
- Those which the landlord needs to obtain tribunals consent confirming that it is a permitted lease
- Those which the landlord can self-certify
Any marketing information must confirm what category or permitted lease it falls into and the individual who grants the lease must serve a warning notice on the tenant, and receive an acknowledgment in return, before the parties can commit to the lease.
If there is a grant or assignment of a long residential lease of a house, which breaches the ban, the tenant may be entitled to acquire the freeholder at no extra cost and the landlord may also be fined.
Tenants right to buy our ground in long residential leases
The Act will give residential tenants the right to a variation of their lease to replace ground rent with a peppercorn. This right applies to leases of both houses and flats in both England and Wales where the term remaining on the lease is at least 150 years. Leases with an unexpired term of less than 150 years and community house leases and home finance plan leases are excluded from this right.
Despite the LRFA 2024 receiving Royal Assent, it has not yet been confirmed when all the provisions are going to come into force. We must therefore wait for further updates as to when they will be implemented.
If you want to know more or want to speak to a member of our team, please get in touch below or call us on 01702 338338.
