The Introduction of Further Protection and Rights for Long Residential Leaseholders

Author:Ms Stephanie Thomas
Profession:RadcliffesLeBrasseur
 
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Originally published in November 2004

The Commonhold and Leasehold Reform Act 2002 received Royal Assent in May 2002. Since that date, various Commencement Orders have brought its provisions into force in four stages. This month the Office of the Deputy Prime Minister has announced that the next phase of the provisions in the 2002 Act will come into force on 28 February 2005 with the result that long leaseholders will have further improved protection and rights.

A Summary of the New Provisions:-

Ground Rent

Landlords will have to send tenants a written demand for the payment of ground rent. Until this has been issued in a prescribed form and served on tenants, they will not be liable to pay ground rent and therefore landlords will not be able to impose penalties for late payment or take enforcement action. The date for payment must be between 30 and 60 days after giving notice and not before the date specified in the Lease.

Forfeiture

Landlords will have to satisfy a Leasehold Valuation Tribunal, Court or Arbitral Tribunal that a disputed breach of a covenant or condition in the Lease has occurred before they will be able to take any forfeiture action. Therefore, unless a tenant has admitted a breach, two sets of proceedings will be required; the first to establish the breaches, and the second to forfeit the Lease and obtain an order for possession after service of a Notice pursuant to the Law of Property Act 1925.

Landlords will be prevented from forfeiting Leases as a result of small debts consisting of ground rent, service charges, or administration charges (or a combination of these) where the debt does not exceed £350.00, unless all or any part of the sum has been outstanding for more than 3 years.

Insurance

Landlords will be prevented from insisting that leaseholders of houses use a particular insurance company nominated or approved by them to insure their premises.

Collective Enfranchisement

The valuation date for claims for the collective enfranchisement of flats will be fixed at the date the initial notice is served. The objective of this provision is to avoid unnecessary arguments and to remove the possibility of delaying tactics being used by either party which may...

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