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Leasehold and Freehold Reform Act 2024

Type Public General Act
Publication 2024-05-24
Last updated 2025-03-03
State In force
Department Statute Law Database
Source legislation.gov.uk
articles Not indexed
Reform history JSON API
  • (c) omit subsection (5)(b).
  • (3) In section 10(1A) (landlord’s covenants on enfranchisement), omit the words from “and in the absence” to “assurance)”.
  • (4) In section 14 (costs of extension)—
  • (a) omit subsections (2) and (2A);
  • (b) omit subsection (3)(b).
  • (5) In section 15(9) (landlord’s covenants on extension), omit the words from “and in the absence” to “assurance)”.
  • (6) After section 19 insert—

(19A) (1) A tenant is not liable for any costs incurred by any other person as a result of the tenant’s claim to acquire a freehold or extended lease under this Part, except as referred to in— (a) subsection (4), (b) section 19B (liability where claim ceases to have effect), and (c) section 19C (liability where tenant acquires the freehold or lease). (2) A former tenant is not liable for any costs incurred by any other person as a result of the former tenant’s claim to acquire a freehold or extended lease under this Part, except as referred to in subsections (4) and (5). (3) A lease, transfer, contract or other arrangement is accordingly of no effect to the extent it would provide to the contrary. (4) A tenant or former tenant is liable for costs incurred by another person in connection with proceedings before a court or tribunal if— (a) the court or tribunal has power under this Part or another enactment to order that the tenant or former tenant pay those costs, and (b) the court or tribunal makes such an order. (5) A former tenant is liable for costs incurred by a successor in title to the extent agreed between the former tenant and that successor in title. (6) In this section and sections 19B to 19E— (a) “claim” includes an invalid claim; (b) “costs” does not include— (i) anything for which the tenant is required to pay compensation under this Part, or (ii) anything for which the tenant is required to pay under section 9(A1) (price payable for freehold) or section 14A (price payable for extended lease). (7) In this section, “former tenant” means a person who was a tenant making a claim to acquire a freehold or extended lease under this Part, but is no longer a tenant. (8) See also sections 20CA and 20J of the Landlord and Tenant Act 1985, which prevent costs in connection with a claim under this Part being recovered by way of a variable service charge (within the meaning of section 18 of that Act). (19B) (1) A tenant is liable to the landlord for a prescribed amount in respect of non-litigation costs if— (a) the tenant’s claim to acquire a freehold or extended lease of a house and premises under this Part ceases to have effect, and (b) the reason why the claim ceases to have effect is not a permitted reason. (2) The permitted reasons are— (a) the claim ceasing to have effect under regulations under section 4B (landlord certified as community housing provider); (b) the claim ceasing to have effect under section 5(6) (compulsory acquisition); (c) an order being made under section 17(2) (landlord’s redevelopment rights); (d) an order being made under section 18(4) (landlord’s residential rights); (e) the claim ceasing to have effect under section 28(1)(a) (land required for public purposes etc); (f) the claim ceasing to have effect under section 32A (property transferred for public benefit etc); (g) the claim ceasing to have effect under section 74(2) of the Leasehold Reform, Housing and Urban Development Act 1993 (estate management schemes). (3) For the purposes of this section— (a) where Schedule 1 (enfranchisement or extension by sub-tenants) applies to the claim, “the landlord” means the reversioner (see paragraph 1(1)(b) of that Schedule); (b) “prescribed” means prescribed by, or determined in accordance with, regulations made— (i) in relation to England, by the Secretary of State; (ii) in relation to Wales, by the Welsh Ministers; (c) “non-litigation costs” are costs that are or could be incurred by a landlord as a result of a claim under this Part other than in connection with proceedings before a court or tribunal; (d) a reference to a claim “ceasing to have effect” includes— (i) the claim having been withdrawn or deemed withdrawn; (ii) the claim having been set aside by the court or the appropriate tribunal; (iii) the claim ceasing to have effect by virtue of the tenant failing to comply with an obligation arising from the claim; (e) a claim does not cease to have effect if it results in the acquisition of the freehold or extended lease; (f) where a claim ceases to have effect by virtue of a person who was a tenant assigning their lease without assigning the claim under section 5(2), “tenant” includes that person. (4) Regulations under this section are to be made by statutory instrument. (5) A statutory instrument containing regulations under this section is— (a) where it contains regulations made by the Secretary of State, subject to annulment in pursuance of a resolution of either House of Parliament; (b) where it contains regulations made by the Welsh Ministers, subject to annulment in pursuance of a resolution of Senedd Cymru. (19C) (1) A tenant is liable to the landlord for the amount referred to in subsection (2) if— (a) the tenant makes a claim to acquire a freehold or extended lease of a house and premises under this Part, (b) the tenant acquires the freehold or extended lease, (c) the price payable by the tenant for the freehold under section 9(A1), or for the extended lease under section 14A, is less than a prescribed amount, (d) the landlord incurs costs as a result of the claim, (e) the costs are incurred other than in connection with proceedings before a court or tribunal, (f) the costs incurred by the landlord are reasonable, and (g) the costs are more than the price payable. (2) The amount is the difference between— (a) the price payable by the tenant, and (b) the costs incurred by the landlord, or, if those costs exceed a prescribed amount, that prescribed amount. (3) In this section— (a) where Schedule 1 (enfranchisement or extension by sub-tenants) applies to the claim, “the landlord” in this section means the reversioner (see paragraph 1(1)(b) of that Schedule); (b) “prescribed” means prescribed by, or determined in accordance with, regulations made— (i) in relation to England, by the Secretary of State; (ii) in relation to Wales, by the Welsh Ministers. (4) Regulations under this section are to be made by statutory instrument. (5) A statutory instrument containing regulations under this section is— (a) where it contains regulations made by the Secretary of State, subject to annulment in pursuance of a resolution of either House of Parliament; (b) where it contains regulations made by the Welsh Ministers, subject to annulment in pursuance of a resolution of Senedd Cymru. (19D) (1) The appropriate authority may by regulations provide for circumstances in which, if— (a) Schedule 1 (enfranchisement or extension by sub-tenants) applies to a claim, and (b) the reversioner (see paragraph 1(1)(b) of Schedule 1) receives an amount under section 19B or 19C, the reversioner is required to pay a proportion of that amount to one or more of the other landlords (see paragraph 1(3) of Schedule 1). (2) In this section, “appropriate authority” means— (a) in relation to England, the Secretary of State; (b) in relation to Wales, the Welsh Ministers. (3) Regulations under this section— (a) may make provision for the appropriate tribunal to order payment; (b) are to be made by statutory instrument. (4) A statutory instrument containing regulations under this section is— (a) where it contains regulations made by the Secretary of State, subject to annulment in pursuance of a resolution of either House of Parliament; (b) where it contains regulations made by the Welsh Ministers, subject to annulment in pursuance of a resolution of Senedd Cymru. (19E) A lease, transfer, contract or other arrangement is of no effect to the extent it requires a tenant to pay another person an amount in anticipation of the tenant being liable to a person in respect of their costs as a result of a claim under this Part.

  • (7) In section 20 (jurisdiction of county court), omit subsections (4) and (4A).
  • (8) In section 22(3)(a) (deposits), omit “and landlord’s costs”.
  • (9) In consequence of the amendments made by subsections (2) to (8)—
  • (a) in section 9(5)(c) (landlord’s lien as vendor), for “him” substitute “the tenant”;
  • (b) in section 14(3)(c) (conditions for grant of extended lease), for “him” substitute “the tenant”;
  • (c) in section 17(4)(b) (redevelopment rights), omit the words from “but” to “the notice”;
  • (d) in section 18(6)(b) (residential rights), omit the words from “but” to “the notice”;
  • (e) in section 19(14)(b) (management powers), omit the words from “and” to “withdrawn”;
  • (f) in section 27A(5) (compensation for ineffective claim in certain cases), for paragraph (b) substitute—

(b) a permitted reason within the meaning of section19B(2);

;

  • (g) in section 32A(5) (property transferred for public benefit), omit paragraph (a).

Costs of enfranchisement and extension under the LRHUDA 1993

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  • (1) The LRHUDA 1993 is amended as follows.
  • (2) In section 28 (withdrawal of acquisition), omit subsections (4) to (7).
  • (3) In section 29 (deemed withdrawal), omit subsections (6) to (8).
  • (4) In section 32(2) (vendor’s lien), omit paragraph (c).
  • (5) Omit section 33 (costs of enfranchisement).
  • (6) In section 56(3) (conditions of grant of new lease), omit paragraph (b).
  • (7) In section 57(8) (landlord’s covenants on extension), omit the words from “and in the absence” to “assurance)”.
  • (8) Omit section 60 (costs of extension) and the italic heading preceding it.
  • (9) Before section 90 insert—

(89A) (1) A tenant is not liable for any costs incurred by any other person as a result of the tenant’s claim under Chapter 1 or 2, except as referred to in— (a) subsections (5) and (8), (b) section 89B (liability where a claim under Chapter 1 ceases to have effect), (c) section 89E (liability where a claim under Chapter 2 ceases to have effect), and (d) section 89F (liability where a new lease of a flat is acquired under Chapter 2). (2) A former tenant is not liable for any costs incurred by any other person as a result of the tenant’s claim under Chapter 1 or 2, except as referred to in subsections (5), (7) and (8). (3) A nominee purchaser in relation to a claim under Chapter 1 is not liable for any costs incurred by any other person as a result of the claim, except as referred to in— (a) subsections (5), (8) and (9), (b) section 89B (liability where a claim ceases to have effect), (c) section 89C (liability where a freehold of premises is acquired), and (d) section 89D (liability where a leaseback is required). (4) A lease, transfer, contract or other arrangement is accordingly of no effect to the extent it would provide to the contrary. (5) A participant is liable to another participant in respect of costs incurred as a result of a claim under Chapter 1 to the extent agreed between the two participants. (6) “Participant”, in relation to a claim under Chapter 1, means— (a) a tenant or former tenant that is or has been a participating tenant; (b) a nominee purchaser in relation to the claim. (7) A former tenant is liable for costs incurred by a successor in title to the extent agreed between the former tenant and that successor in title. (8) A tenant, former tenant or nominee purchaser is liable for costs incurred by another person in connection with proceedings before a court or tribunal if— (a) the court or tribunal has power under Chapter 1 or 2 or another enactment to order that those costs are paid, and (b) the court or tribunal makes such an order. (9) A nominee purchaser is liable for costs in relation to a claim under Chapter 1 as set out in section 15(7) (liability after termination of appointment). (10) In this section and sections 89B to 89H— (a) “claim” includes an invalid claim; (b) “costs” does not include— (i) anything for which the tenant or nominee purchaser is required to pay compensation under Chapter 1 or 2, or (ii) anything for which the tenant or nominee purchaser is required to pay under section 32 (price payable for collective enfranchisement) or section 56 (price payable for new lease). (11) In this section— (a) “former tenant” means a person who was a tenant making a claim under Chapter 1 or 2, but is no longer a tenant; (b) a reference to the “nominee purchaser” includes a reference to— (i) where more than one person constitutes the nominee purchaser, each person constituting the nominee purchaser; (ii) a person whose appointment as nominee purchaser has terminated in accordance with section 15(3) or 16(1). (12) See also sections 20CA and 20J of the Landlord and Tenant Act 1985, which prevent costs in connection with a claim under Chapter 1 or 2 being recovered by way of a variable service charge (within the meaning of section 18 of that Act). (89B) (1) A tenant is liable to the reversioner for a prescribed amount in respect of non-litigation costs if— (a) the tenant’s claim to acquire a freehold of premises under Chapter 1 ceases to have effect, and (b) the reason why the claim ceases to have effect is not a permitted reason. (2) The permitted reasons are— (a) the claim ceasing to have effect under regulations under section 8B (landlord certified as community housing provider); (b) an order being made under section 23(1) (landlord’s redevelopment rights); (c) the claim ceasing to have effect under section 30 (compulsory acquisition procedures); (d) the claim ceasing to have effect under section 31 (designation for public benefit); (e) the claim ceasing to have effect under section 74(3) (estate management schemes). (3) If a tenant is liable under this section, the nominee purchaser in relation to the claim (if any) is also liable. (4) If more than one person is liable under this section, each of those persons is jointly and severally liable. (5) In this section— - “nominee purchaser”— includes each person constituting the nominee purchaser at the relevant time; does not include any person whose appointment as nominee purchaser has, before the relevant time, terminated in accordance with section 15(3) or 16(1); - “non-litigation costs” means costs that are or could be incurred by a landlord as a result of a claim under Chapter 1 other than in connection with proceedings before a court or tribunal; - “prescribed” means prescribed by, or determined in accordance with, regulations made— in relation to England, by the Secretary of State; in relation to Wales, by the Welsh Ministers; - “relevant time” means the time the claim ceases to have effect; - “tenant”— includes a person that is not a participating tenant in relation to the claim at the relevant time but that has at any time been such a tenant, but does not include such a person if, before the relevant time, the person assigned the lease in respect of which they were a participating tenant to another person that became a participating tenant in accordance with section 14(4). (6) For the purposes of this section— (a) a reference to a claim “ceasing to have effect” includes— (i) the claim having been withdrawn or deemed withdrawn; (ii) the claim having been set aside by the court or the appropriate tribunal; (iii) the claim ceasing to have effect by virtue of the tenant failing to comply with an obligation arising from the claim; (b) a claim does not cease to have effect if it results in the acquisition of the freehold. (89C) (1) A nominee purchaser in relation to a claim to acquire a freehold of premises under Chapter 1 is liable to the reversioner for the amount referred to in subsection (2) if— (a) the nominee purchaser acquires the freehold, (b) the price payable by the nominee purchaser for the freehold under section 32 is less than a prescribed amount, (c) the reversioner incurs costs as a result of the claim, (d) the costs are incurred other than in connection with proceedings before a court or tribunal, (e) the costs incurred by the reversioner are reasonable, and (f) the costs are more than the price payable. (2) The amount is the difference between— (a) the price payable by the nominee purchaser, and (b) the costs incurred by the reversioner, or, if those costs exceed a prescribed amount, that prescribed amount. (3) In this section— - “nominee purchaser”— includes each person constituting the nominee purchaser at the relevant time; does not include any person whose appointment as nominee purchaser has, before the relevant time, terminated in accordance with section 15(3) or 16(1); - “prescribed” means prescribed by, or determined in accordance with, regulations made— in relation to England, by the Secretary of State; in relation to Wales, by the Welsh Ministers; - “relevant time” means the time the nominee purchaser acquires the freehold. (89D) (1) A nominee purchaser in relation to a claim to acquire a freehold of premises under Chapter 1 is liable to a freeholder for a prescribed amount in respect of non-litigation costs if— (a) the nominee purchaser acquires a freehold of premises under Chapter 1, and (b) in connection with the acquisition, the nominee purchaser grants the freeholder a lease of a flat or other unit in accordance with section 36 and Part 3A of Schedule 9. (2) In this section— - “nominee purchaser”— includes each person constituting the nominee purchaser at the relevant time; does not include any person whose appointment as nominee purchaser has, before the relevant time, terminated in accordance with section 15(3) or 16(1); - “non-litigation costs” means costs that are or could be incurred by a freeholder as a result of the grant of a lease of a flat or other unit in accordance with section 36 and Part 3A of Schedule 9, other than in connection with proceedings before a court or tribunal; - “prescribed” means prescribed by, or determined in accordance with, regulations made— in relation to England, by the Secretary of State; in relation to Wales, by the Welsh Ministers; - “relevant time” means the time the nominee purchaser acquires the freehold. (89E) (1) A tenant is liable to the competent landlord for a prescribed amount in respect of non-litigation costs if— (a) the tenant’s claim to acquire a new lease of a flat under Chapter 2 ceases to have effect, and (b) the reason why the claim ceases to have effect is not a permitted reason. (2) The permitted reasons are— (a) an order being made under section 47(1) (landlord’s redevelopment rights); (b) the claim ceasing to have effect under section 55 (compulsory acquisition procedures). (3) For the purposes of this section— (a) “prescribed” means prescribed by, or determined in accordance with, regulations made— (i) in relation to England, by the Secretary of State; (ii) in relation to Wales, by the Welsh Ministers; (b) “non-litigation costs” are costs that are or could be incurred by a landlord as a result of a claim under Chapter 2 other than in connection with proceedings before a court or tribunal; (c) a reference to a claim “ceasing to have effect” includes— (i) the claim having been withdrawn or deemed withdrawn; (ii) the claim having been set aside by the court or the appropriate tribunal; (iii) the claim ceasing to have effect by virtue of the tenant failing to comply with an obligation arising from the claim; (d) a claim does not cease to have effect if it results in the acquisition of the new lease; (e) where a claim ceases to have effect by virtue of a person who was a tenant assigning their lease without assigning the claim (see section 43), “tenant” includes that person. (89F) (1) A tenant is liable to the competent landlord for the amount referred to in subsection (2) if— (a) the tenant makes a claim to acquire a new lease under Chapter 2, (b) the tenant acquires the new lease, (c) the price payable by the tenant for the new lease under section 56 is less than a prescribed amount, (d) the competent landlord incurs costs as a result of the claim, (e) the costs are incurred other than in connection with proceedings before a court or tribunal, (f) the costs incurred by the competent landlord are reasonable, and (g) the costs are more than the price payable. (2) The amount is the difference between— (a) the price payable by the tenant, and (b) the costs incurred by the competent landlord, or, if those costs exceed a prescribed amount, that prescribed amount. (3) In this section, “prescribed” means prescribed by, or determined in accordance with, regulations made— (a) in relation to England, by the Secretary of State; (b) in relation to Wales, by the Welsh Ministers. (89G) (1) The appropriate authority may by regulations provide for circumstances in which, if the reversioner receives an amount under section 89B or 89C (liability for costs arising under Chapter 1), the reversioner is required to pay a proportion of that amount to one or more of the other relevant landlords. See section 9 for the meanings of “reversioner” and “other relevant landlord”. (2) The appropriate authority may by regulations provide for circumstances in which, if the competent landlord receives an amount under section 89E or 89F (liability for costs arising under Chapter 2), the competent landlord is required to pay a proportion of that amount to one or more of the other landlords. See section 40 for the meanings of “competent landlord” and “other landlord”. (3) Regulations under this section may make provision for the appropriate tribunal to order payment. (4) In this section, “appropriate authority” means— (a) in relation to England, the Secretary of State; (b) in relation to Wales, the Welsh Ministers. (89H) (1) A lease, transfer, contract or other arrangement is of no effect to the extent it requires a tenant or nominee purchaser to pay another person an amount in anticipation of the tenant or nominee purchaser being liable to a person in respect of their costs as a result of a claim under Chapter 1 or 2. (2) The appropriate tribunal may, on the application of a person (the “applicant”) to which a nominee purchaser in relation to a claim under Chapter 1 may be liable by virtue of section 89D (leasebacks), order the nominee purchaser to pay an amount— (a) to the applicant, or (b) into the tribunal, in anticipation of the nominee purchaser being so liable.

  • (10) In Schedule 7, in paragraph 2(2) (terms of enfranchisement), omit the words from “and in the absence” to “assurance)”.
  • (11) In consequence of the amendments made by subsections (2) to (10)—
  • (a) in section 15(7) (appointment and replacement of nominee purchaser)—
  • (i) for the words from “he shall not be liable” to “but if” substitute “and”;
  • (ii) for “under section 33” substitute “as otherwise referred to in section 89A”;
  • (b) in section 31(5) (designation for inheritance tax purposes), omit paragraph (a);
  • (c) in the italic heading before section 32, omit “and costs of enfranchisement”;
  • (d) in section 52 (withdrawal from acquisition of new lease), omit subsection (3);
  • (e) in section 74 (effect of estate management schemes on freehold claims), omit subsection (4).

Jurisdiction of the county court and tribunals

Replacement of sections 20 and 21 of the LRA 1967

40

For sections 20 and 21 of the LRA 1967 (jurisdiction of county court and tribunals) substitute—

(20) (1) Any jurisdiction conferred on the court by this Part is to be exercised by the county court unless a contrary intention appears (and subject to section 41 of the County Courts Act 1984). (2) Proceedings for determining the amount of a sub-tenant’s share under Schedule 2 in compensation payable to a tenant under section 17, or for establishing or giving effect to a sub-tenant’s right to such a share, are to be brought in the county court (but see section 21(8)). (21) (1) The following matters are, in default of agreement, to be determined by the appropriate tribunal— (a) whether a person is entitled to acquire the freehold or an extended lease of a house and premises, or to what property that right extends; (b) the price payable for a house and premises in accordance with section 9 or an extended lease in accordance with section 14A; (c) what provisions should be contained in a conveyance in accordance with section 10 or 29(1), or in a lease granting a new tenancy under section 14; (d) the amount of any compensation payable to a tenant under section 17 for the loss of a house and premises; (e) whether (and what) costs are payable under section 19B or 19C; (f) the amount of any other costs payable by virtue of any provision of Part 1; (g) the amount of the appropriate sum to be paid into the tribunal under section 27(5); (h) the amount of any compensation payable under section 27A; (i) any matter arising under paragraph 12A of Schedule 1 (reduction of rent under intermediate leases on grant of an extended lease), including what rent under an intermediate lease is apportioned to the house and premises; (j) whether a person is entitled to be paid a share of the market value, and what share of the market value a person is entitled to be paid, in accordance with Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024; (k) any matter arising under Schedule 10 to the Leasehold and Freehold Reform Act 2024 (variation of lease to reduce rent to peppercorn). (2) No application may be made to the appropriate tribunal under subsection (1) to determine the price payable for a house and premises or an extended lease unless— (a) the landlord has informed the tenant of the price they are asking, or (b) two months have elapsed without the landlord doing so since the tenant gave notice of their desire to have the freehold or extended lease under this Part. (3) Where in connection with any acquisition by a tenant of the freehold or an extended lease under this Part it is necessary to apportion between the house and premises (or part of them) and other property the rent payable under the immediate tenancy or any superior or reversionary tenancy, the apportionment must be made by the appropriate tribunal. (4) Where the appropriate tribunal has determined that costs are payable under section 19B or 19C or the amount of any other costs payable by virtue of any provision of Part 1, it may make an order requiring a person to pay those costs. (5) Where the appropriate tribunal has determined the amount of compensation payable under section 27A, it may make an order requiring the tenant concerned to pay that amount to the person entitled to it. (6) In relation to paragraph 12A of Schedule 1— (a) if the landlord under a qualifying intermediate lease cannot be found or their identity cannot be ascertained, the appropriate tribunal may make such order as it thinks fit, including— (i) an order dispensing with the requirement to give notice under paragraph 12A(3) of Schedule 1 to that landlord, or (ii) an order that such a notice has effect and has been properly served even though it has not been served on that landlord; (b) the appropriate tribunal may make an order appointing a person to vary a lease in accordance with paragraph 12A of Schedule 1 on behalf of the landlord or tenant; (c) if the appropriate tribunal makes a determination that a notice under paragraph 12A(3) of Schedule 1 was of no effect, it may— (i) determine whether another landlord or tenant could have given such a notice, and (ii) if it determines that they could have done so, order that paragraph 12A of Schedule 1 is to apply as if they had done so. (7) The variation of a lease on behalf of a party in consequence of an order under subsection (6)(b) has the same force and effect (for all purposes) as if it had been executed by that party. (8) The appropriate tribunal has jurisdiction, either by agreement or in a case where an application is made to the tribunal under subsection (1) with reference to the same transaction, to determine the amount of a sub-tenant’s share under Schedule 2 in compensation payable to a tenant under section 17. (9) For the purposes of this Part a matter is to be treated as determined by (or on appeal from) the appropriate tribunal— (a) if the decision on the matter is not appealed against, at the end of the period for bringing an appeal, or (b) if that decision is appealed against, at the time when the appeal is disposed of. (10) An appeal is disposed of— (a) if it is determined and the period for bringing any further appeal has ended, or (b) if it is abandoned or otherwise ceases to have effect. (11) See section 44 of the Leasehold and Freehold Reform Act 2024, which restricts the first-instance jurisdiction of the High Court in respect of tribunal matters. (21A) (1) This section applies to proceedings— (a) relating to the performance or discharge of obligations arising out of a tenant’s notice of their desire to have the freehold or an extended lease under this Part, and (b) for which jurisdiction has not otherwise been conferred under or by virtue of this Part. (2) Jurisdiction is conferred on the appropriate tribunal for proceedings to which this section applies. (3) But jurisdiction is instead conferred on the court where a purpose of the proceedings is to obtain a remedy that could not be granted by the appropriate tribunal but could be granted by the court. (4) If, in proceedings before the court to which this section applies, it appears to the court that— (a) the remedy (or remedies) sought could be granted by the appropriate tribunal, it must by order transfer the proceedings to the appropriate tribunal; (b) a remedy sought could be granted by the appropriate tribunal and another remedy sought could only be granted by the court, it may by order transfer the proceedings to the appropriate tribunal insofar as the proceedings relate to the remedy that could be granted by the appropriate tribunal. (5) Following a transfer of proceedings under subsection (4)(b)— (a) the court may dispose of all or any remaining proceedings pending the determination of the transferred proceedings by the appropriate tribunal, (b) the appropriate tribunal may determine the transferred proceedings, and (c) when the appropriate tribunal has done so, the court may give effect to the determination in an order of the court. (6) Rules of court may prescribe the procedure to be followed in a court in connection with or in consequence of a transfer under this section. (7) A reference in this Part to the jurisdiction conferred on the appropriate tribunal or the court includes that conferred by this section. (8) This section does not prevent the bringing of proceedings in a court other than the county court where the claim is for damages or pecuniary compensation only. (21B) (1) The court or appropriate tribunal may, on the application of any person interested, make an order requiring any person who has failed to comply with any requirement imposed on them under or by virtue of any provision of this Part to make good the default within such time as is specified in the order. (2) An application may not be made under subsection (1) unless— (a) a notice has been previously given to the person in question requiring them to make good the default, and (b) more than 14 days have elapsed since the date of the giving of that notice without their having done so. (3) An application may not be made under subsection (1) to the court unless the application relates to proceedings in respect of which the court has jurisdiction under or by virtue of any provision of this Part (including section 21A). (4) Where an order other than an order to pay a sum of money has been made under subsection (1) by the appropriate tribunal— (a) a person may apply to the court for enforcement of the order; (b) the appropriate tribunal may by order transfer proceedings to the court for enforcement of the order, and the order is to be enforceable by the court in the same way as an order of the court. (5) See section 176C of the Commonhold and Leasehold Reform Act 2002 for general provision about the enforcement of tribunal decisions and section 27 of the Tribunals, Courts and Enforcement Act 2007 for provision about the enforcement of an order to pay a sum of money. (21C) (1) This section applies where— (a) all of the terms related to a conveyance or grant of a lease under this Part, including the price and other sums payable under this Part or section 37 of the Leasehold and Freehold Reform Act 2024, have been agreed between the tenant and the landlord or determined by the appropriate tribunal, (b) the time fixed for the completion of the conveyance or grant of the lease has passed without that completion or grant taking place, (c) the completion or grant has not taken place because— (i) a party to the transaction has failed to execute the conveyance or lease, or (ii) the tenant has failed to pay the price and other sums payable, and (d) that failure is in breach of an obligation arising under this Part; and the fact that any matter dealt with in Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024 has not been determined does not stop this section from applying. (2) Where this section applies, the appropriate tribunal may, on the application of the tenant or the landlord, make an order— (a) appointing a person to execute the conveyance or lease on behalf of a party to the transaction; (b) requiring the tenant to pay the price and other sums payable into the tribunal or to a person specified in the order. (3) A conveyance or lease executed on behalf of a party in consequence of an order under this section has the same force and effect (for all purposes) as if it had been executed by that party. (4) This section does not prevent a party to a transaction seeking other remedies in connection with a breach of an obligation.

References to “the court” in Part 1 of the LRA 1967

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  • (1) The LRA 1967 is amended as follows.
  • (2) In the following provisions, for “the court” substitute “the appropriate tribunal” in each place it occurs—
  • (a) section 2;
  • (b) section 27;
  • (c) in Schedule 1—
  • (i) paragraph 3;
  • (ii) paragraph 4;
  • (d) in Schedule 3—
  • (i) paragraph 6(3);
  • (ii) paragraph 7(5);
  • (e) in Schedule 4A—
  • (i) paragraph 3(3);
  • (ii) paragraph 3A(3);
  • (iii) paragraph 4A(6).
  • (3) In the following provisions, for “into court” substitute “into the tribunal” in each place it occurs—
  • (a) sections 11 to 13, including the heading of section 13;
  • (b) section 27;
  • (c) in Schedule 1, paragraph 4(3)(c).
  • (4) In the following provisions, after “court” insert “or tribunal”—
  • (a) section 5(7);
  • (b) section 13(3)(b);
  • (c) section 37(7);
  • (d) in Schedule 3, paragraph 5, in both places it occurs.
  • (5) In section 11(5), for “in court” substitute “in the tribunal”.
  • (6) In section 13(3), in the words after paragraph (b)—
  • (a) after “a court” insert “or tribunal”;
  • (b) omit “other than the county court”;
  • (c) after “the court” insert “or tribunal”.
  • (7) In section 27A(7)(b)—
  • (a) after “the court” insert “or the appropriate tribunal”;
  • (b) after “court order” insert “or order of a tribunal”.

Amendment of Part 1 of the LRHUDA 1993

42
  • (1) The LRHUDA 1993 is amended as follows.
  • (2) After section 27 insert—

(27A) (1) This section applies where— (a) the completion of a conveyance has not taken place in accordance with the terms of a binding contract entered into in pursuance of an initial notice because— (i) a party to the transaction has failed to execute the conveyance, or (ii) the nominee purchaser has failed to pay the price and other sums payable or due under the contract, and (b) that failure is in breach of an obligation arising under the contract. (2) Where this section applies, the appropriate tribunal may, on the application of the nominee purchaser or the reversioner, make an order— (a) appointing a person to execute the conveyance on behalf of a party to the transaction; (b) requiring the nominee purchaser to pay the price and other sums payable or due under the contract into the tribunal or to a person specified in the order. (3) A conveyance executed on behalf of a party in consequence of an order under this section has the same force and effect (for all purposes) as if it had been executed by that party. (4) This section does not prevent a party to a transaction seeking other remedies in connection with a breach of an obligation.

  • (3) In section 48 (applications where terms in dispute or failure to enter into new lease)—
  • (a) after subsection (3) insert—

(3A) An order under subsection (3) may— (a) appoint a person to execute the new lease on behalf of a party to the transaction; (b) require that the price and other sums payable are paid into the tribunal or to a person specified in the order. A lease executed on behalf of a party to a transaction in consequence of an order under subsection (3) has the same force and effect (for all purposes) as if it had been executed by that party.

;

  • (b) in subsection (4), for “Any such order” substitute “An order under subsection (3)”.
  • (4) In section 49 (applications where landlord fails to give counter-notice or further counter-notice)—
  • (a) after subsection (4) insert—

(4A) An order under subsection (4) may— (a) appoint a person to execute the new lease on behalf of a party to the transaction; (b) require that the price and other sums payable are paid into the tribunal or to a person specified in the order. A lease executed on behalf of a party to a transaction in consequence of an order under subsection (4) has the same force and effect (for all purposes) as if it had been executed by that party.

;

  • (b) in subsection (5), for “Any such order” substitute “An order under subsection (4)”.
  • (5) In section 90 (jurisdiction of county courts)—
  • (a) omit subsection (2);
  • (b) in subsection (3), for “or (2)” substitute “or section 91A”;
  • (c) omit subsection (4).
  • (6) For section 91 (jurisdiction of tribunals) substitute—

(91) (1) Any question arising in relation to any of the following matters is, in default of agreement, to be determined by the appropriate tribunal— (a) the terms of acquisition relating to— (i) any interest which is to be acquired by a nominee purchaser in pursuance of Chapter 1, or (ii) any new lease which is to be granted to a tenant in pursuance of Chapter 2, including in particular any matter which needs to be determined in accordance with section 37 of, or Schedule 4 to, the Leasehold and Freehold Reform Act 2024; (b) the terms of any lease which is to be granted in accordance with section 36 and Schedule 9; (c) the amount of any payment falling to be made by virtue of section 18(2); (d) the amount of any compensation payable under section 37A or 61A; (e) the amount of any costs payable by virtue of any provision of Chapter 1 or 2; (f) the apportionment between two or more persons of any amount (whether of costs or otherwise) payable by virtue of any such provision; (g) whether (and what) costs are payable under any of sections 89B to 89F; (h) the terms on which a lease is to be severed under paragraph 7 of Schedule A1; (i) any matter arising under paragraph 12 of Schedule 11 (reduction of rent under intermediate leases on grant of a new lease), including what rent under an intermediate lease is apportioned to the flat; (j) whether a person is entitled to be paid a share of the market value, and what share of the market value a person is entitled to be paid, in accordance with Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024; (k) any matter arising under Schedule 10 to the Leasehold and Freehold Reform Act 2024 (variation of lease to reduce rent to peppercorn). (2) Where in connection with— (a) any exercise of the right to collective enfranchisement under Chapter 1, or (b) any acquisition of a new lease under Chapter 2, it is necessary to apportion the rent payable under a tenancy (whether immediate, superior or reversionary), the apportionment must be made by the appropriate tribunal. (3) The appropriate tribunal may, when determining the property in which any interest is to be acquired in pursuance of a notice under section 13 or 42, specify in its determination property which is less extensive than that specified in that notice. (4) Where the appropriate tribunal has determined the amount of compensation payable under section 37A or 61A, it may make an order requiring the tenant concerned to pay that amount to the person entitled to it. (5) Where the appropriate tribunal has determined the amount of any costs payable by virtue of any provision of Chapter 1 or 2 or that costs are payable under any of sections 89B to 89F, it may make an order requiring a person to pay those costs. (6) In relation to paragraph 12 of Schedule 11— (a) if the landlord under a qualifying intermediate lease cannot be found or their identity cannot be ascertained, the appropriate tribunal may make such order as it thinks fit, including— (i) an order dispensing with the requirement to give notice under paragraph 12(3) of Schedule 11 to that landlord, or (ii) an order that such a notice has effect and has been properly served even though it has not been served on that landlord; (b) the appropriate tribunal may make an order appointing a person to vary a lease in accordance with paragraph 12 of Schedule 11 on behalf of the landlord or tenant; (c) if the appropriate tribunal makes a determination that a notice under paragraph 12(3) of Schedule 11 was of no effect, it may— (i) determine whether another landlord or tenant could have given such a notice, and (ii) if it determines that they could have done so, order that paragraph 12 of Schedule 11 is to apply as if they had done so. (7) The variation of a lease on behalf of a party in consequence of an order under subsection (6)(b) has the same force and effect (for all purposes) as if it had been executed by that party. (8) In this section— - “nominee purchaser” has the same meaning as in Chapter 1; - “terms of acquisition” is to be construed in accordance with section 24(8) or section 48(7), as appropriate. (9) For the purposes of this Chapter “appropriate tribunal” means— (a) in relation to property in England, the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal; (b) in relation to property in Wales, a leasehold valuation tribunal. (10) See section 44 of the Leasehold and Freehold Reform Act 2024, which restricts the first-instance jurisdiction of the High Court in respect of tribunal matters. (91A) (1) This section applies to proceedings— (a) in relation to any matter arising under or by virtue of Chapter 1 or 2 or this Chapter, and (b) for which jurisdiction has not otherwise been conferred under or by virtue of this Act. (2) Jurisdiction is conferred on the appropriate tribunal for proceedings to which this section applies. (3) But jurisdiction is instead conferred on the court where a purpose of the proceedings is to obtain a remedy that could not be granted by the appropriate tribunal but could be granted by the court. (4) If, in proceedings before the court to which this section applies, it appears to the court that— (a) the remedy (or remedies) sought could be granted by the appropriate tribunal, it must by order transfer the proceedings to the appropriate tribunal; (b) a remedy sought could be granted by the appropriate tribunal and another remedy sought could only be granted by the court, it may by order transfer the proceedings to the appropriate tribunal insofar as the proceedings relate to the remedy that could be granted by the appropriate tribunal. (5) Following a transfer of proceedings under subsection (4)(b)— (a) the court may dispose of all or any remaining proceedings pending the determination of the transferred proceedings by the appropriate tribunal, (b) the appropriate tribunal may determine the transferred proceedings, and (c) when the appropriate tribunal has done so, the court may give effect to the determination in an order of the court. (6) Rules of court may prescribe the procedure to be followed in a court in connection with or in consequence of a transfer under this section. (7) A reference in Chapter 1 or 2 or this Chapter to the jurisdiction conferred on the appropriate tribunal or the court includes that conferred by this section.

  • (7) In section 92 (enforcement of obligations under Chapters 1 and 2)—
  • (a) in the heading, for “Enforcement of” substitute “Power to order compliance with”;
  • (b) in subsection (1), after “The court” insert “or appropriate tribunal”;
  • (c) after subsection (2) insert—

(3) An application may not be made under subsection (1) to the court unless the application relates to proceedings in respect of which the court has jurisdiction under or by virtue of any provision of Chapter 1, 2 or 7 (including section 91A). (4) Where an order other than an order to pay a sum of money has been made under subsection (1) by the appropriate tribunal— (a) a person may apply to the court for enforcement of the order; (b) the appropriate tribunal may by order transfer proceedings to the court for enforcement of the order, and the order is to be enforceable by the court in the same way as an order of the court. (5) See section 176C of the Commonhold and Leasehold Reform Act 2002 for general provision about the enforcement of tribunal decisions and section 27 of the Tribunals, Courts and Enforcement Act 2007 for provision about the enforcement of an order to pay a sum of money.

.

References to “the court” in Part 1 of the LRHUDA 1993

43
  • (1) The LRHUDA 1993 is amended as follows.
  • (2) In the following provisions, for “the court” substitute “the appropriate tribunal” in each place it occurs—
  • (a) sections 22 to 27;
  • (b) sections 46 to 51;
  • (c) section 74(3)(c);
  • (d) in Schedule 1—
  • (i) paragraphs 2 to 5;
  • (ii) paragraphs 5B to 5E;
  • (iii) paragraph 6(3);
  • (e) in Schedule 3, paragraph 15(2);
  • (f) in Schedule 5—
  • (i) paragraph 1(1);
  • (ii) paragraph 2(1);
  • (g) in Schedule 11, paragraph 6(3);
  • (h) in Schedule 12, paragraph 9(2).
  • (3) In the following provisions, for “into court” substitute “into the tribunal” in each place it occurs—
  • (a) section 27;
  • (b) section 51;
  • (c) in Schedule 1, paragraph 6(3)(c);
  • (d) in Schedule 5, paragraphs 2 to 4, including the heading of paragraph 4;
  • (e) in Schedule 8, paragraphs 2 and 4, including the heading of paragraph 4.
  • (4) In section 19(6), after “any court” insert “or tribunal”.
  • (5) In section 26(9), for “Rules of court” substitute “Tribunal Procedure Rules, and regulations under Schedule 12 to the Commonhold and Leasehold Reform Act 2002 (leasehold valuation tribunals: procedure),”.
  • (6) In section 37A(8)(b)—
  • (a) after “the court” insert “or the appropriate tribunal”;
  • (b) after “court order” insert “or order of a tribunal”.
  • (7) In section 61A(7)(b)—
  • (a) after “the court” insert “or the appropriate tribunal”;
  • (b) after “court order” insert “or order of a tribunal”.
  • (8) In section 101(9), in the words before paragraph (a), after “a decision” insert “or order”.
  • (9) In Schedule 1, in paragraph 6(2), in the words after paragraph (b), for “the court” substitute “the appropriate tribunal”.
  • (10) In Schedule 3—
  • (a) in paragraph 10(1)(d)(ii), after “the court” insert “or the appropriate tribunal”;
  • (b) in paragraph 10(2), after “a court” insert “or tribunal”.
  • (11) In Schedule 8, in paragraph 4(3)—
  • (a) in paragraph (b), after “any court” insert “or tribunal”;
  • (b) in the words after paragraph (b)—
  • (i) after “a court” insert “or tribunal”;
  • (ii) omit “other than the county court”;
  • (iii) after “the court” insert “or tribunal”.
  • (12) In Schedule 11, in paragraph 6(1), in the words after paragraph (c), for “the court” substitute “the appropriate tribunal”.
  • (13) In Schedule 12—
  • (a) in paragraph 8(1)(c)(ii), after “the court” insert “or the appropriate tribunal”;
  • (b) in paragraph 8(2), after “a court” insert “or tribunal”.
  • (14) In the headings before sections 22 and 46, omit “court or”.

Jurisdiction of the High Court

No first-instance applications to the High Court in tribunal matters

44
  • (1) Where jurisdiction in respect of a matter is conferred on the appropriate tribunal exclusively under the LRA 1967 or a specified provision of the LRHUDA 1993, a person may not apply to the High Court in respect of that matter.
  • (2) Subsection (1) has no effect in relation to any proceedings that may be brought in the High Court for the purpose of challenging a decision, declaration, direction or order of the appropriate tribunal.
  • (3) The specified provisions of the LRHUDA 1993 are—
  • (a) Chapters 1, 2, 4 and 7 of Part 1;
  • (b) section 88.
  • (4) In subsection (1) “appropriate tribunal” has the same meaning as in the LRA 1967 or the specified provision of the LRHUDA 1993 (whichever is relevant).
  • (5) For the purposes of this section, jurisdiction in respect of a matter is conferred on the appropriate tribunal exclusively where—
  • (a) a provision of the LRA 1967 or the LRHUDA 1993 provides for the matter to be determined by the appropriate tribunal alone (and not by a court or the appropriate tribunal), or
  • (b) proceedings in respect of the matter fall within the jurisdiction of the appropriate tribunal by virtue of section 21A of the LRA 1967 or section 91A of the LRHUDA 1993.

Enfranchisement and extension: miscellaneous amendments

Miscellaneous amendments

45

Schedule 8 contains miscellaneous further amendments to existing legislation relating to enfranchisement and extension.

Preservation of existing law for certain purposes

LRA 1967: preservation of existing law for certain enfranchisements

46

After section 7 of the LRA 1967 insert—

(7A) (1) The tenant of a leasehold house may choose that this Act is to have effect in relation to the acquisition of the freehold of the house and premises without the amendments made by the Leasehold and Freehold Reform Act 2024, if the house and premises would be valued under section 9(1) (as it would have effect without those amendments). (2) If— (a) a person makes a claim to acquire a freehold under the preserved law, and (b) as a result of that claim, further notices by that person are void by virtue of a statutory bar under the preserved law, only further notices making claims under the preserved law are void by virtue of that statutory bar. (3) In subsection (2)— - “preserved law” means this Part as it has effect (by virtue of subsection (1)) without the amendments made by the Leasehold and Freehold Reform Act 2024; - “statutory bar” means— section 9(3)(b), or an order under section 20(6) or paragraph 4(3) of Schedule 3. (4) Subsection (1) does not apply in any of the following cases— (a) the tenancy was created by the grant of a lease under Part 5 of the Housing Act 1985 (a “right to buy lease”); (b) the tenancy is, by virtue of section 3(3), treated as a single tenancy with a tenancy created by the grant of a right to buy lease; (c) the tenancy is a sub-tenancy directly or indirectly derived out of a tenancy falling within paragraph (a) or (b); (d) the tenancy was granted under this Part in substitution for a tenancy or sub-tenancy falling within paragraph (a), (b) or (c).

Consequential amendments to other legislation

Part 2: consequential amendments to other legislation

47

Schedule 9 contains amendments to other legislation that are consequential on this Part.

Part 3 — Other rights of long leaseholders

New right to replace rent with peppercorn rent

Right to vary long lease to replace rent with peppercorn rent

48

Schedule 10 confers on certain leaseholders the right to a variation of their leases so that the whole or part of the rent payable becomes and will remain a peppercorn rent.

The right to manage

Change of non-residential limit on right to manage claims

49

In Schedule 6 to the Commonhold and Leasehold Reform Act 2002 (“the CLRA 2002”), in paragraph 1(1) (non-residential limit on right to manage claims), for “25 per cent.” substitute “50%”.

Costs of right to manage claims

50
  • (1) The CLRA 2002 is amended as follows.
  • (2) In section 82 (right to obtain information before right to manage claim)—
  • (a) in subsection (2)(b), omit “on payment of a reasonable fee”;
  • (b) after subsection (3) insert—

(4) The RTM company is liable for the reasonable costs incurred by a person in complying (in accordance with this section) with a notice under this section. (5) Any question arising in relation to the amount of the costs payable by the RTM company is, in default of agreement, to be determined by the appropriate tribunal.

  • (3) After section 87 insert—

(87A) (1) An RTM company and a member of an RTM company are not liable for any costs incurred by any other person in consequence of a claim notice given by the company in relation to any premises, except as set out in this section. (2) A lease, transfer, contract or other arrangement is accordingly of no effect to the extent it would provide to the contrary. (3) An RTM company is liable to a member of the company in respect of costs incurred by the member to the extent agreed between the company and the member. (4) A member of an RTM company— (a) is liable to the company in respect of costs incurred by the company to the extent agreed between the member and the company; (b) is liable to another member of the company in respect of costs incurred by that other member to the extent agreed between the two members. (5) An RTM company or a member of an RTM company are liable for costs incurred by another person in connection with proceedings before a court or tribunal if— (a) the court or tribunal has power under another enactment to order that they pay those costs, and (b) the court or tribunal makes such an order. (6) An RTM company and a member of an RTM company are liable for costs incurred by another person in the circumstances referred to in section 87B. (7) For the purposes of this section, “member”, in relation to an RTM company, means each person who is or has been a member of the RTM company. (8) See also sections 20CA and 20J of the Landlord and Tenant Act 1985, which prevent costs in connection with a claim under this Chapter being recovered by way of a variable service charge (within the meaning of section 18 of that Act). (87B) (1) The appropriate tribunal may, on the application of a person (“the applicant”) that incurs costs in consequence of a claim notice given by an RTM company, order that the RTM company is liable to the applicant for the costs if all of the conditions in subsection (2) are met. (2) The conditions are— (a) the claim notice— (i) is at any time withdrawn or deemed to be withdrawn by virtue of any provision of this Chapter, or (ii) at any time ceases to have effect by reason of any other provision of this Chapter; (b) the RTM company acts unreasonably in— (i) giving the claim notice, or (ii) not withdrawing it, causing it to be deemed withdrawn, or causing it to cease to have effect sooner; (c) the applicant is— (i) a landlord under a lease of the whole or any part of the premises, (ii) party to such a lease otherwise than as landlord or tenant, or (iii) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises; (d) the costs are incurred before the claim notice is withdrawn, is deemed withdrawn, or ceases to have effect; (e) the costs are incurred other than in connection with proceedings before a court or tribunal; (f) the costs are reasonably incurred. (3) Where the appropriate tribunal orders that an RTM company is liable under subsection (1), each person who is or has been a member of the RTM company is also liable (jointly and severally with the RTM company and each other such person). (4) But a person is not liable if— (a) the lease by virtue of which they were a qualifying tenant has been assigned to another person, and (b) that other person has become a member of the RTM company. (5) The reference in subsection (4) to an assignment includes— (a) an assent by personal representatives, and (b) assignment by operation of law where the assignment is to a trustee in bankruptcy or to a mortgagee under section 89(2) of the Law of Property Act 1925 (foreclosure of leasehold mortgage).

  • (4) Omit sections 88 and 89 (costs of right to manage claims).

Compliance with obligations arising under Chapter 1 of Part 2 of the CLRA 2002

51
  • (1) Section 107 of the CLRA 2002 (enforcement of obligations) is amended as follows.
  • (2) In subsection (1), for “county court” substitute “appropriate tribunal”.
  • (3) After subsection (2) insert—

(3) Where an order other than an order to pay a sum of money has been made under subsection (1) by the appropriate tribunal— (a) a person may apply to the county court for enforcement of the order; (b) the appropriate tribunal may by order transfer proceedings to the county court for enforcement of the order; and the order is to be enforceable by the court in the same way as an order of the court. (4) See section 176C for general provision about the enforcement of tribunal decisions and section 27 of the Tribunals, Courts and Enforcement Act 2007 for provision about the enforcement of an order to pay a sum of money.

  • (4) For the heading substitute “Power of tribunal to order compliance”.

No first-instance applications to the High Court in tribunal matters

52
  • (1) Where jurisdiction in respect of a matter is conferred on the appropriate tribunal under Chapter 1 of Part 2 of the CLRA 2002, a person may not apply to the High Court in respect of that matter.
  • (2) Subsection (1) has no effect in relation to any proceedings that may be brought in the High Court for the purpose of challenging a decision, declaration, direction or order of the appropriate tribunal.
  • (3) In subsection (1) “appropriate tribunal” has the same meaning as in the Chapter mentioned in that subsection.

Part 4 — Regulation of leasehold

Service charges

Extension of regulation to fixed service charges

53
  • (1) The Landlord and Tenant Act 1985 (“the LTA 1985”) is amended in accordance with subsections (2) to (6).
  • (2) In section 18 (meaning of “service charge” and “relevant costs”)—
  • (a) in the heading, after ““service charge”” insert “, “variable service charge””;
  • (b) for subsections (1) and (2) substitute—

(1) In the following provisions of this Act— - “service charge” means an amount payable by a tenant of a dwelling, as part of or in addition to the rent, which is payable, directly or indirectly, for the purpose of meeting, or contributing towards, the relevant costs; - “variable service charge” means a service charge the whole or part of which varies or may vary according to the relevant costs. (2) The “relevant costs” are the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, or a superior landlord, in connection with services, repairs, maintenance, improvements or insurance or the landlord’s costs of management.

;

  • (c) in subsection (3)(b), for “a service charge” substitute “a variable service charge”.
  • (3) In the provisions referred to in subsection (4)—
  • (a) for “service charge” substitute “variable service charge”;
  • (b) for “service charges” substitute “variable service charges”.
  • (4) The provisions are—
  • (a) in section 19 (reasonableness of service charges), the heading and subsections (1) and (2);
  • (b) in section 20 (consultation requirements), the heading and subsection (2);
  • (c) in section 20A (grant-aided works), the heading and subsections (1) and (2);
  • (d) in section 20B (time limit on making demands), the heading and subsection (1) in the first place “service charge” occurs;
  • (e) in section 20D (remediation works), the heading and subsections (4) and (5);
  • (f) in section 20F (excluded costs for higher-risk buildings), the heading and subsection (2);
  • (g) in section 30D (liability for building safety costs), subsection (2)(a)(ii);
  • (h) in section 30E (liability for remuneration), subsection (1)(c).
  • (5) In section 30E(3), for ““service charge” has the meaning” substitute ““service charge” and “variable service charge” have the meaning”.
  • (6) In section 39 (index of defined expressions), at the end insert—
variable service charge section 18(1)

.

  • (7) The Landlord and Tenant Act 1987 (“the LTA 1987”) is amended in accordance with subsections (8) to (10).
  • (8) In the provisions referred to in subsection (9), in each place they occur—
  • (a) for “service charge” substitute “variable service charge”;
  • (b) for “service charges” substitute “variable service charges”.
  • (9) The provisions are—
  • (a) in section 24 (appointment of manager by tribunal), subsections (2) and (2A);
  • (b) in section 35 (application by party to lease for variation of lease), subsections (2) and (4);
  • (c) in section 42 (service charge contributions to be held in trust), the heading and subsections (1), (2), (3), (4), (6), and (8).
  • (10) In section 35(8), for ““service charge” has the meaning” substitute ““service charge” and “variable service charge” have the meaning”.
  • (11) In section 167 of the CLRA 2002 (failure to pay small amount for short period)—
  • (a) in subsection (1), for “service charges” substitute “variable service charges”;
  • (b) in subsection (5), for “service charge” substitute “variable service charge”.

Notice of future service charge demands

54

In section 20B of the LTA 1985 (time limit on making service charge demands), in subsection (2), for the words from “notified in writing” to the end substitute “given a future demand notice in respect of those costs.

(3) A “future demand notice” is a notice in writing that— (a) relevant costs have been incurred, and (b) the tenant will subsequently be required under the terms of the lease to contribute to the costs by the payment of a variable service charge. (4) A future demand notice must— (a) be in the specified form, (b) contain the specified information, and (c) be given to the tenant in a specified manner. “Specified” means specified in regulations made by the appropriate authority. (5) The regulations may, among other things, specify as information to be contained in a future demand notice— (a) an amount estimated as the amount of the costs incurred (an “estimated costs amount”); (b) an amount which the tenant is expected to be required to contribute to the costs (an “expected contribution”); (c) a date on or before which it is expected that payment of the variable service charge will be demanded (an “expected demand date”). (6) Regulations that include provision by virtue of subsection (5) may also provide for a relevant rule to apply in a case where— (a) the tenant has been given a future demand notice in respect of relevant costs, and (b) a demand for payment of a variable service charge as a contribution to those costs is served on the tenant more than 18 months after the costs were incurred. (7) The relevant rules are— (a) in a case where a future demand notice is required to contain an estimated costs amount, that the tenant is liable to pay the service charge only to the extent it reflects relevant costs that do not exceed the estimated costs amount; (b) in a case where a future demand notice is required to contain an expected contribution, that the tenant is liable to pay the service charge only to the extent it does not exceed the expected contribution; (c) in a case where a future demand notice is required to contain an expected demand date, that, if the demand is served after the expected demand date, the tenant is not liable to pay the service charge to the extent it reflects any of the costs. (8) Regulations that provide for the relevant rule in subsection (7)(c) to apply may also provide that, in a case set out in the regulations, the rule is to apply as if, for the expected demand date, there were substituted a later date determined in accordance with the regulations. (9) Regulations under this section— (a) are to be made by statutory instrument; (b) may make provision generally or only in relation to specific cases; (c) may make different provision for different purposes; (d) may include supplementary, incidental, transitional or saving provision. (10) A statutory instrument containing regulations under this section is subject to the negative procedure.

Service charge demands

55
  • (1) The LTA 1985 is amended in accordance with subsections (2) and (3).
  • (2) Omit the following sections—
  • (a) section 21 (request for summary of relevant costs);
  • (b) section 21A (withholding of service charges);
  • (c) section 21B (notice to accompany demands for service charges).
  • (3) Before section 22 insert—

(21C) (1) A landlord may not demand the payment of a service charge unless the demand— (a) is in the specified form, (b) contains the specified information, and (c) is provided to the tenant in a specified manner. “Specified” means specified in regulations made by the appropriate authority. (2) Accordingly, where a demand for payment of a service charge does not comply with subsection (1), a provision of the lease relating to non-payment or late payment of service charges does not have effect in relation to the service charge. (3) The appropriate authority may by regulations provide for exceptions from subsection (1) by reference to— (a) descriptions of landlord; (b) descriptions of service charge; (c) any other matter. (4) Regulations under this section— (a) are to be made by statutory instrument; (b) may make provision generally or only in relation to specific cases; (c) may make different provision for different purposes; (d) may include supplementary, incidental, transitional or saving provision. (5) A statutory instrument containing regulations under this section is subject to the negative procedure.

  • (4) In the LTA 1987—
  • (a) in section 47 (landlord’s name and address to be contained in demands for rent etc), after subsection (3) insert—

(3A) Subsections (2) and (3) do not apply in relation to a written demand for payment of a service charge if section 21C of the Landlord and Tenant Act 1985 requires the demand to include information which subsection (1) also requires the demand to include.

;

  • (b) in section 47A (building safety information to be contained in demands for rent etc), after subsection (3) insert—

(3A) Subsections (2) and (3) do not apply in relation to a written demand for payment of a service charge if section 21C of the Landlord and Tenant Act 1985 requires the demand to include information which subsection (1) also requires the demand to include.

Accounts and annual reports

56
  • (1) The LTA 1985 is amended as follows.
  • (2) After section 21C (as inserted by section 55) insert—

(21D) (1) This section applies in relation to a lease of a dwelling if— (a) a variable service charge is or may be payable under the lease, and (b) any of the relevant costs which are or may be taken into account in determining the amount of that variable service charge are or may be taken into account in determining the amount of variable service charges payable by the tenants of three or more other dwellings (“connected tenants”). (2) The following terms are implied into the lease— (a) that, on or before the account date for each accounting period, the landlord must provide the tenant with a written statement of account in a specified form and manner setting out— (i) the variable service charges arising in the period which are payable by the tenant and each connected tenant, (ii) the relevant costs relating to those service charges, and (iii) any other specified matters; (b) that, on or before the account date for an accounting period in respect of which a statement of account is provided, the landlord must provide the tenant with a written report about the statement prepared by a qualified accountant, which— (i) is prepared in accordance with specified standards for the review of financial information, and (ii) includes a statement by the accountant, in a specified form and manner, that the report is a faithful representation of what it purports to represent; (c) that the landlord must provide adequate accounts, receipts or other documents or explanations to the accountant to enable them to provide the report; (d) that, if the landlord incurs costs in obtaining the report, the tenant must pay the landlord a fair and reasonable contribution to those costs. “Specified” means specified in regulations made by the appropriate authority. (3) An “accounting period” is— (a) a period of 12 months specified in the lease as an accounting period, or (b) if no such period is specified in the lease, a period of 12 months beginning with 1 April. (4) The “account date” for an accounting period is the final day of the period of six months beginning with the day after the final day of the accounting period. (5) An amount payable under the term implied by subsection (2)(d)— (a) is a variable service charge for the purposes of section 18, and the provisions of this Act relating to service charges apply accordingly; (b) is payable irrespective of whether a lease, contract or other arrangement provides for it to be payable as a service charge. (6) The appropriate authority may by regulations provide for circumstances in which a term in subsection (2)— (a) is not to be implied into a lease, or (b) is to be implied into a lease in a modified form. (7) Regulations under this section— (a) are to be made by statutory instrument; (b) may make provision generally or only in relation to specific cases; (c) may make different provision for different purposes; (d) may include supplementary, incidental, transitional or saving provision. (8) A statutory instrument containing regulations under this section is subject to the negative procedure. (21E) (1) A landlord must, on or before the report date for an accounting period, provide the tenant with a report in respect of service charges arising in that period. (2) The appropriate authority may by regulations make provision as to— (a) the information to be contained in the report in respect of those service charges; (b) the form of the report; (c) the manner in which the report is to be provided. (3) The appropriate authority may by regulations also make provision requiring information to be contained in the report in respect of other matters which the appropriate authority considers are likely to be of interest to a tenant, whether or not they directly relate to service charges or to service charges arising in the period. (4) An “accounting period” is— (a) a period of 12 months specified in the lease as an accounting period, or (b) if no such period is specified in the lease, a period of 12 months beginning with 1 April. (5) The “report date” for an accounting period is the final day of the period of one month beginning with the day after the final day of the accounting period. (6) The appropriate authority may by regulations provide for exceptions from the duty in subsection (1) by reference to— (a) descriptions of landlord; (b) descriptions of service charge; (c) any other matter. (7) Regulations under this section— (a) are to be made by statutory instrument; (b) may make provision generally or only in relation to specific cases; (c) may make different provision for different purposes; (d) may include supplementary, incidental, transitional or saving provision. (8) A statutory instrument containing regulations under this section is subject to the negative procedure.

  • (3) In section 28 (meaning of “qualified accountant”)—
  • (a) in subsection (1), for the words from “in section” to “person” substitute “in section 21D(2)(b) (report on service charge account) is to a person”;
  • (b) for subsection (2) substitute—

(2) A person has the necessary qualification if the person— (a) is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006, or (b) satisfies such other requirement or requirements as may be specified in regulations made by the appropriate authority.

;

  • (c) in subsection (4)(d), for the words from “covered” to the end substitute “covered by the statement of account in question relate”;
  • (d) after subsection (6) insert—

(7) Regulations under this section— (a) are to be made by statutory instrument; (b) may make provision generally or only in relation to specific cases; (c) may make different provision for different purposes; (d) may include supplementary, incidental, transitional or saving provision. (8) A statutory instrument containing regulations under this section (whether alone or with other provision) is subject to the affirmative procedure.

  • (4) In section 39 (index of defined expressions), in the entry for “qualified accountant”, for “section 21(6)” substitute “section 21D(2)(b)”.

Right to obtain information on request

57
  • (1) The LTA 1985 is amended as follows.
  • (2) After section 21E (as inserted by section 56) insert—

(21F) (1) A tenant may require the landlord to provide information specified in regulations made by the appropriate authority. (2) The appropriate authority may specify information for the purposes of subsection (1) only if it relates to— (a) service charges, or (b) services, repairs, maintenance, improvements, insurance, or management of dwellings. (3) The landlord must provide the tenant with any of the information requested that is within the landlord’s possession. (4) The landlord must request information from another person if— (a) the information has been requested from the landlord under subsection (1), (b) the landlord does not possess the information when the request is made, and (c) the landlord believes that the other person possesses the information. (5) That person must provide the landlord with any of the information requested that is within that person’s possession. (6) A person (“A”) must request information from another person (“B”) if— (a) the information has been requested from A under subsection (4) or this subsection, (b) A does not possess the information when the request is made, and (c) A believes that B possesses the information. (7) B must provide A with any of the information requested that is within B’s possession. (8) The appropriate authority may by regulations— (a) provide for how a request is to be made under this section; (b) provide that a request under this section may not be made until the end of a particular period, or until another condition is met; (c) make provision as to the period within which a request under subsection (4) or (6) must be made; (d) provide for circumstances in which a duty to comply with a request under this section does not apply. (9) Section 21G makes further provision about requests under this section. (10) For the purposes of this section— (a) “information” includes a document containing information, and a copy of such a document; (b) references to a tenant include the secretary of a recognised tenants’ association representing the tenant, in circumstances where the tenant has consented to the association acting on the tenant’s behalf for the purposes of this section. (11) Regulations under this section— (a) are to be made by statutory instrument; (b) may make provision generally or only in relation to specific cases; (c) may make different provision for different purposes; (d) may include supplementary, incidental, transitional or saving provision. (12) A statutory instrument containing regulations under this section is subject to the negative procedure. (21G) (1) Subsections (2) to (6) apply where a person (“R”) requests information under section 21F from another person (“P”). (2) R may request that P provide the information to R by allowing R access to premises where R may inspect the information and make and remove a copy of the information. (3) P must provide information which P is required to provide under section 21F— (a) before the end of a specified period beginning with the day the request is made, and (b) if R has made a request under subsection (2), by allowing R the access requested during a specified period. “Specified” means specified in regulations made by the appropriate authority. (4) P may charge R for the costs of doing anything required under section 21F or this section. (5) But, if P is a landlord, P may not charge the tenant for the costs of allowing the tenant access to premises to inspect information (but may charge for the making of copies). (6) The costs referred to in subsection (4) may be relevant costs for the purposes of a variable service charge (whether charged to the tenant making the request under section 21F(1) or another tenant). (7) Regulations under subsection (3) may provide for circumstances in which a specified period is to be extended. (8) The appropriate authority may by regulations make further provision as to how information requested under section 21F is to be provided. (9) Regulations under this section— (a) are to be made by statutory instrument; (b) may make provision generally or only in relation to specific cases; (c) may make different provision for different purposes; (d) may include supplementary, incidental, transitional or saving provision. (10) A statutory instrument containing regulations under this section is subject to the negative procedure. (21H) (1) The assignment of a tenancy does not affect an obligation arising as a result of a request made under section 21F before the assignment. (2) But, in the circumstances of such an assignment, a person is not obliged to provide the same information more than once in respect of the same dwelling.

  • (3) Omit the following sections—
  • (a) section 22 (request to inspect supporting accounts);
  • (b) section 23 (request relating to information held by superior landlord);
  • (c) section 24 (effect of assignment on request).

Enforcement of duties relating to service charges

58
  • (1) The LTA 1985 is amended as follows.
  • (2) Omit section 25 (offences).
  • (3) Before section 26 insert—

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