Leasehold and Freehold Reform Act 2024

Part 1 — Leasehold houses

Ban on grant or assignment of certain long residential leases of houses

Ban on grant or assignment of certain long residential leases of houses

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• (1) A person may not grant or enter into an agreement to grant a long residential lease of a house on or after the day on which this section comes into force, unless it is a permitted lease (see section 7).

• (2) A person may not assign or enter into an agreement to assign the whole or a part of a lease which was granted on or after the day on which this section comes into force if—

• (a) at the time of the assignment the lease is a long residential lease of a house, but

• (b) at the time of the grant the lease was not a long residential lease of a house.

• (3) This section does not affect—

• (a) the validity of a lease granted, or an assignment entered into, in breach of this section, and does not affect the powers of a person to grant or assign such a lease (whether under section 23(1) of the Land Registration Act 2002 or otherwise);

• (b) any contractual rights of a party to an agreement entered into in breach of this section.

Key definitions

Long residential leases of houses

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• (1) A lease is a “long residential lease of a house” if conditions A to C are met in relation to the lease.

• (2) Condition A: the lease has a long term (see sections 3 and 4).

• (3) Condition B: the lease demises one house (see section 5), with or without appurtenant property, and nothing else.

• (4) Condition C: the lease is a residential lease (see section 6).

Leases which have a long term

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• (1) A lease has a “long term” in any of cases A to D.

• (2) Case A: the lease is granted for a term certain exceeding 21 years.

• (3) Case B: section 149(6) of the Law of Property Act 1925 applies to the lease (lease granted for life or until marriage or civil partnership) and the lease accordingly takes effect with a term fixed by law.

• (4) Case C: the lease is granted with a covenant or obligation for perpetual renewal and accordingly takes effect with a term fixed by law - unless it is a sub-lease with a term fixed by law of 21 years or shorter.

• (5) Case D: the lease is capable of forming part of a series of leases whose terms would extend beyond 21 years (see section 4).

• (6) In determining whether a lease has a long term, it is irrelevant if the lease is, or may become, terminable by notice, re-entry or forfeiture.

Series of leases whose term would extend beyond 21 years

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• (1) A lease (“the original lease”) is “capable of forming part of a series of leases whose terms would extend beyond 21 years” if conditions A to C are met at the time when the original lease is granted.

• (2) Condition A: the original lease does not have a long term under section 3(2), (3) or (4).

• (3) Condition B: provision for the grant of another lease of the same house (the “new lease”) is included in—

• (a) the original lease, or

• (b) any related arrangements.

• (4) Condition C: the total duration of—

• (a) the term of the original lease,

• (b) the term of the new lease (if granted), and

• (c) the term or terms of any subsequent leases (if granted),

would exceed 21 years.

• (5) In a case where the provision for the grant of the new lease, or for the grant of any subsequent lease, allows for the possibility of the term of the lease being one of a number of differing durations, the reference in condition C to the term of the lease is to the longest of those possible durations.

• (6) A lease is a “lease of the same house” if the lease demises one house, being the house comprised in the original lease, with or without any appurtenant property, and nothing else.

• (7) Arrangements are “related arrangements” if they are entered into in connection with the grant of the original lease (whether or not they are entered into in writing).

• (8) A lease is a “subsequent lease” if—

• (a) it is not the new lease,

• (b) it is a lease of the same house, and

• (c) provision for the grant of the lease—

• (i) is included in the original lease or any related arrangements,

• (ii) would be included in the new lease (if granted), or

• (iii) would be included in any other lease that (if granted) would itself be a subsequent lease.

Houses

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• (1) A “house” is a separate set of premises (on one or more floors) which—

• (a) forms the whole, or part, of a building, and

• (b) is constructed or adapted for use for the purposes of a dwelling.

• (2) But where the separate set of premises forms part of a building, it is not a house if the whole of or a material part of the set of premises lies above or below some other part of the building.

Residential leases

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A lease is a “residential lease” if it is a lease of a house and the terms of the lease do not prevent the house from being occupied under that lease as a separate dwelling.

Permitted leases

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A lease is a “permitted lease” if—

• (a) it is a long residential lease of a house, and

• (b) it falls into one or more of the categories set out in Schedule 1.

Regulation of permitted leases

Permitted leases: certification by the appropriate tribunal

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• (1) The appropriate tribunal must, on an application by a person, issue a certificate (a “permitted lease certificate”) in relation to a new long residential lease of a house, where the tribunal is satisfied that the lease is or will be a permitted lease falling within Part 1 of Schedule 1.

• (2) An application under this section may be made and determined whether or not the application includes a draft of the instrument creating the new lease.

• (3) The appropriate tribunal may issue a permitted lease certificate on such terms and conditions as it considers appropriate, but the certificate must—

• (a) identify the house or the land on which the house will be built, and

• (b) state the category or categories set out in Part 1 of Schedule 1 into which the lease will fall.

• (4) If an application under this section relates to two or more leases, the appropriate tribunal may issue just one certificate relating to some or all of those leases.

Permitted leases: marketing restrictions

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• (1) This section applies in relation to the marketing of a house where—

• (a) the house is to be comprised in a new lease, and

• (b) the lease will be a long residential lease of the house.

• (2) A person (“a promoter”) may not make any material marketing the house to be comprised in the lease available to any person, unless the permitted lease information relating to the lease is included in or provided with that material.

• (3) The “permitted lease information”, in relation to a lease, means—

• (a) if the lease falls or will fall into one or more of the categories set out in Part 1 of Schedule 1, a copy of the permitted lease certificate together with a statement identifying that category or those categories,

• (b) if to the best of the knowledge and belief of the promoter at the time the material is made available the lease falls or will fall into one or more of the categories set out in Part 2 of Schedule 1, a statement identifying that category or those categories, or

• (c) if both paragraphs (a) and (b) apply to the lease, the information required under both those paragraphs.

• (4) “Marketing” includes any form of advertising or promotion.

Permitted leases: transaction warning conditions

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• (1) A person may not, on or after the day on which section 1 comes into force—

• (a) enter into an agreement to grant a permitted lease unless the transaction warning conditions are met in relation to the agreement, or

• (b) subject to subsection (5), grant a permitted lease unless the transaction warning conditions are met in relation to the lease.

• (2) The “transaction warning conditions” are as follows—

• (a) at least 7 days before the relevant date the grantor must give a warning notice relating to the permitted lease—

• (i) to the proposed tenant, or

• (ii) where there is more than one proposed tenant, to each of them;

• (b) a notice of receipt of the warning notice must be given to the grantor—

• (i) by the proposed tenant, or

• (ii) where there is more than one proposed tenant, jointly by all of the proposed tenants;

• (c) a reference to the warning notice and the notice of receipt must be included in or endorsed on the relevant instrument in the specified manner.

• (3) A “warning notice” is a notice provided in a specified form and manner and containing—

• (a) sufficient information to identify the house to be comprised in the lease,

• (b) if the lease falls within Part 1 of Schedule 1, a copy of the permitted lease certificate,

• (c) if the lease falls into one or more of the categories set out in Part 2 of Schedule 1, a statement identifying that category or those categories,

• (d) if both paragraphs (b) and (c) apply to the lease, the information required under both those paragraphs, and

• (e) such other information as may be specified.

• (4) A “notice of receipt” is a notice provided in a specified form and manner and containing such information as may be specified.

• (5) A person does not breach subsection (1) in relation to the grant of a lease if—

• (a) the person previously entered into an agreement to grant that lease,

• (b) the transaction warning conditions were met in relation to that agreement, and

• (c) a reference to the warning notice and the notice of receipt relating to that agreement is included in or endorsed on the instrument creating the lease.

• (6) This section does not apply to the grant of a permitted lease which falls within paragraph 6 of Schedule 1 (leases agreed before commencement).

• (7) This section does not affect—

• (a) the validity of a lease granted in breach of subsection (1), and does not affect the powers of a person to grant such a lease (whether under section 23(1) of the Land Registration Act 2002 or otherwise);

• (b) any contractual rights of a party to an agreement entered into in breach of subsection (1).

• (8) In this section—

• “grantor”, in relation to a lease, means the person proposing to grant the lease (whether or not that person holds the freehold or leasehold title out of which the lease will be granted);

• “proposed tenant”, in relation to a lease, means the proposed tenant of the house to be comprised in the lease;

• “relevant date” means— in the case of an agreement to grant a lease, the day on which the agreement is entered into, and in the case of a grant of a lease, the day on which the lease is granted;

• “relevant instrument” means— in the case of an agreement to grant a lease, that agreement, and in the case of a grant of a lease, the instrument creating that lease;

• “specified” means specified or described in regulations made— in relation to a lease of a house in England, by the Secretary of State; in relation to a lease of a house in Wales, by the Welsh Ministers.

• (9) A statutory instrument containing regulations under this section is subject to the negative procedure.

Land registration

Prescribed statements in new long leases

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• (1) This section applies to a lease of land which—

• (a) has a long term, and

• (b) is granted on or after the day on which section 1 comes into force.

• (2) If the lease is not a long residential lease of a house, the lease must include a statement to that effect.

• (3) If the lease is a permitted lease, the lease must include a statement to that effect.

• (4) A statement under subsection (2) or (3) must comply with such requirements as may be prescribed by land registration rules under the Land Registration Act 2002.

• (5) This section does not apply to—

• (a) a lease with a long term only by virtue of falling within section 3(5);

• (b) a lease which takes effect as a deemed surrender and regrant of a lease.

Restriction on title

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• (1) Subsection (3) applies where—

• (a) the Chief Land Registrar approves an application for registration of a lease (the “registered lease”),

• (b) section 11 applies to the registered lease, but

• (c) the registered lease does not contain a statement made in accordance with subsection (2) or (3) of that section.

• (2) An “application for registration of a lease” is an application for—

• (a) completion by registration of a disposition of registered land, if that disposition is the grant of a lease, or

• (b) registration of a lease within section 4(1)(c) of the Land Registration Act 2002.

• (3) The Chief Land Registrar must enter in the register a restriction that no registrable disposition, other than the grant of a legal charge, of the registered lease is to be completed by registration.

• (4) The restriction under subsection (3) may be removed if the registered lease is varied to include a statement made in accordance with section 11(2) or (3).