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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

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Codes of management practice: extension to estate managers

88

In section 87 of the LRHUDA 1993 (codes of management practice)—

(a) in subsection (6)(b)(i), before “tenants” insert “owners or”;

(b) in subsection (8)(b), omit “let on leases”.

Appointment of substitute manager by Tribunal

Notices of complaint

89

(1) An owner of a managed dwelling may give a notice of complaint to an estate manager.

(2) A notice of complaint is a notice that—

(a) sets out one or more complaints listed in subsection (3) in relation to the estate manager,

(b) states that, if the complaints are not remedied by the end of the qualifying period (see subsection (7)), the owner may make an application under section 90 (application to appoint substitute manager), and

(3) The complaints are—

(a) that the estate manager—

(i) is in breach of an obligation in relation to the dwelling, or

(ii) in the case of an obligation dependent on notice, would be in breach of such an obligation but for the fact that it has not been reasonably practicable to give the estate manager the appropriate notice;

(b) that sums payable by way of estate management charges by the owner, or, if the owner is a tenant or sub-tenant, by the landlord or superior landlord, are not being applied in an efficient or effective manner;

(c) that an estate management charge payable, or proposed or likely to be payable, by the owner, or, if the owner is a tenant or sub-tenant, by the landlord or superior landlord, is unreasonable;

(d) that an administration charge payable, or proposed or likely to be payable, by the owner, or, if the owner is a tenant or sub-tenant, by the landlord or superior landlord, is unreasonable;

(e) that the estate manager has failed to comply with a relevant provision of a code of practice approved under section 87 of the LRHUDA 1993 (codes of management practice).

(4) A notice of complaint may be given jointly by two or more persons if each of those persons is entitled to give a notice to the estate manager (whether or not in respect of the same dwelling).

(5) For that purpose, it is not necessary for every complaint set out in the notice, or every part of each complaint, to apply in relation to each dwelling owned by each of the persons giving the notice.

(6) The Secretary of State may by regulations make provision for determining when a notice of complaint is given.

(7) In this section and sections 90 to 93—

“notice of complaint” means a notice of complaint under this section;

“qualifying period”, in relation to a notice of complaint, means the period of six months beginning with the date on which the notice is given.

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

Appointment of substitute manager

90

(1) The appropriate tribunal may, on the application of an owner of a managed dwelling, by order appoint a person to carry out, in place of an estate manager, such functions in connection with the estate management relating to that dwelling as the tribunal thinks fit.

(2) Section 91 sets out conditions that must be met for a person to make an application.

(3) Section 92 sets out criteria the appropriate tribunal must consider in deciding whether to make an appointment order.

(4) Section 93 makes further provision in relation to appointment orders.

(5) In this section and sections 91 to 93—

“appointment order” means an order under subsection (1);

“substitute manager” means a person appointed under an appointment order.

Conditions for applying for appointment order

91

(1) An owner of a managed dwelling may make an application for an appointment order in relation to an estate manager only if—

(a) the owner has given a notice of complaint to the estate manager,

(b) the qualifying period in relation to that notice has ended,

(c) the owner has, after the end of the qualifying period but before the application is made, given further notice to the estate manager (a “final warning notice”), and

(d) the condition in subsection (5) is met in relation to the final warning notice.

(2) If the owner gave the notice of complaint jointly with other persons, the owner may not make an application for an appointment order unless—

(a) the owner does so jointly with each of those other persons that remain owners of managed dwellings in relation to the estate manager, and

(b) the final warning notice was given jointly by the owner and each of those other persons.

(3) The owner, or the owners acting jointly in accordance with subsection (2), may make an application jointly with an owner of a managed dwelling who did not give the notice of complaint to the estate manager (a “joined applicant”), if the final warning notice was given jointly by the owner or owners and the joined applicant.

(4) A final warning notice must—

(a) specify—

(i) the name of the person (or persons) giving the notice,

(ii) the address of their dwelling (or the addresses of each of their dwellings), and

(iii) if different, an address (or addresses) at which a person may give notice to that person (or one or more of those persons) in connection with the application,

(b) state that the person or persons giving the notice intend to make an application for an appointment order in respect of the dwelling specified in the notice,

(c) specify the grounds on which the appropriate tribunal would be asked to make such an order and the matters that would be relied on by the person or persons for the purpose of establishing those grounds,

(d) where those matters are capable of being remedied by the estate manager, require the estate manager, within a reasonable period specified in the notice, to take specified steps for the purpose of remedying them,

(e) state that, if those matters are remedied, the person or persons will not make an application, and

(f) contain any other information specified in regulations made by the Secretary of State.

(5) The condition in this subsection is met if—

(a) the matters specified in the final warning notice were not capable of being remedied, or

(b) the period specified in the final warning notice for the matters to be remedied has expired without the estate manager having taken the required steps to remedy them.

(6) The appropriate tribunal may by order dispense with a requirement in subsection (1), (2) or (3) if the tribunal is satisfied in light of the urgency of the case that it would not be reasonably practicable for the requirement to be satisfied.

(7) But the tribunal may, when so ordering, direct that such other notices are given, or such other steps are taken, as it thinks fit.

(8) If the tribunal makes an order under subsection (6), an application for an appointment order may be made only if any notices required to be given, and any other steps required to be taken, by virtue of the order have been given or taken.

(9) The Secretary of State may by regulations make provision for determining when a notice under this section is given.

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

Criteria for determining whether to make appointment order

92

(1) The appropriate tribunal may not make an appointment order in relation to an estate manager if the estate manager is specified, or is of a description specified, in regulations made by the Secretary of State.

(2) The appropriate tribunal may make an appointment order only if the tribunal is satisfied that—

(a) it is just and convenient to make the order in all the circumstances of the case, and

(b) either—

(i) those circumstances include those set out in subsection (3), or

(ii) there are other circumstances that make it just and convenient for the order to be made.

(3) The circumstances are—

(a) that the estate manager is—

(i) in breach of an obligation in relation to a dwelling, or

(ii) in the case of an obligation dependent on notice, would be in breach of the obligation but for the fact that it has not been reasonably practicable to give the estate manager the appropriate notice;

(b) that an estate management charge payable, or proposed or likely to be payable, is unreasonable;

(d) that the estate manager has failed to comply with a relevant provision of a code of practice approved under section 87 of the LRHUDA 1993 (codes of management practice);

(e) that the estate manager has breached regulations under section 100 (1) of this Act (requirement to be member of redress scheme).

(4) For the purposes of subsection (3)(b), an estate management charge is to be taken to be unreasonable if—

(a) the amount is unreasonable having regard to the items for which it is payable,

(b) the items for which it is payable are of an unnecessarily high standard, or

(c) the items for which it is payable are of an insufficient standard with the result that additional charges are or may be incurred.

(5) An appointment order may be made despite the fact that—

(a) a period specified in a final warning notice was not a reasonable period, or

(b) a final warning notice otherwise failed to comply with a requirement under section 91 (4).

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

Appointment orders: further provision

93

(1) An appointment order may—

(a) make provision with respect to such matters relating to the exercise by the substitute manager of their functions under the order, and such incidental or ancillary matters, as the tribunal thinks fit, including—

(i) for rights and liabilities arising under contracts or other arrangements to which the substitute manager is not party to become rights and liabilities of the substitute manager;

(ii) for the substitute manager to be entitled to prosecute claims in respect of causes of action (whether contractual or tortious) accruing before or after the date of their appointment;

(iii) for remuneration to be paid to the substitute manager by the estate manager;

(iv) for the substitute manager’s functions to be exercisable during a specified period;

(b) be subject to such conditions as the tribunal thinks fit;

(2) The appropriate tribunal may, on the application of any interested person or of its own motion, vary or discharge (whether conditionally or unconditionally) an appointment order.

(3) The tribunal may not vary or discharge an appointment order unless the tribunal is satisfied that—

(a) the variation or discharge will not result in a recurrence of the circumstances which led to the appointment order being made, and

(b) it is just and convenient in all the circumstances of the case to vary or discharge the order.

(4) In deciding—

(a) the terms of an appointment order, or

(b) whether or how to vary or discharge an appointment order,

the appropriate tribunal must have regard to whether the estate manager in relation to which the order is made has breached regulations under section 100 (1) (requirement to be member of redress scheme).

Sales information requests

Estate management: sales information requests

94

(1) An owner of a managed dwelling may give a sales information request to the estate manager.

(2) A “sales information request” is a document in a specified form, and given in a specified manner, setting out—

(a) that the owner is contemplating selling the dwelling,

(b) information that the owner requests from the estate manager for the purpose of the contemplated sale, and

(3) An owner of a managed dwelling may request information in a sales information request only if the information is specified in regulations made by the appropriate authority.

(4) The appropriate authority may specify information for the purposes of subsection (3) only if the information—

(a) relates to estate management, estate managers, estate management charges or relevant obligations, and

(b) could reasonably be expected to assist a prospective purchaser in deciding whether to purchase a dwelling.

(5) The appropriate authority may by regulations provide that a sales information request may not be given until the end of a particular period, or until another condition is met.

(6) In this section and sections 95 to 97—

(a) a reference to purchasing a dwelling is a reference to becoming an owner of the dwelling, and references to selling a dwelling are to be read accordingly;

(b) “sales information request” has the meaning given in subsection (2);

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

Effect of sales information request

95

(1) An estate manager who has been given a sales information request by the owner of a managed dwelling must provide the owner with any of the information requested that is within the estate manager’s possession.

(2) The estate manager must request information from another person if—

(a) the information has been requested from the estate manager in a sales information request,

(b) the estate manager does not possess the information when the request is made, and

(3) That person must provide the estate manager with any of the information requested that is within that person’s possession.

(4) A person (“A”) must request information from another person (“B”) if—

(a) the information has been requested from A in a request under subsection (2) or this subsection (an “onward request”),

(b) A does not possess the information when the request is made, and

(5) B must provide A with any of the information requested that is within B’s possession.

(6) A person who is required to provide information under this section must do so before the end of a specified period beginning with the day on which the request for the information is made.

(7) A person who—

(a) has been given a sales information request or an onward request, and

(b) as a result of not possessing the information requested, does not provide the information before the end of a specified period beginning with the day on which the request is made,

must give the person making the request a negative response confirmation.

(8) A “negative response confirmation” is a document in a specified form, and given in a specified manner, setting out—

(a) that the person is unable to provide the information requested because it is not in the person’s possession;

(b) a description of what action the person has taken to determine whether the information is in the person’s possession;

(d) an explanation of why the person was unable to obtain the information, including details of any negative response confirmation received by the person;

(e) any other specified information.

(9) A person who is required to give a negative response confirmation must do so before the end of a specified period beginning with the day after the day on which the period referred to in subsection (7)(b) ends.

(10) The appropriate authority may by regulations—

(a) provide that an onward request may not be made until the end of a particular period, or until another condition is met;

(b) provide for how an onward request is to be made;

(d) provide for circumstances in which a duty to comply with a sales information request or an onward request does not apply;

(e) make provision as to how information requested in a sales information request or an onward request is to be provided;

(f) make provision for circumstances in which a period specified for the purposes of subsection (6), (7) or (9) is to be extended.

(11) In this section and sections 96 and 97, “onward request” has the meaning given in subsection (4)(a).

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

Charges for provision of information

96

(1) Subject to any regulations under subsection (2), a person (“P”) may charge another person for—

(a) determining whether information requested in a sales information request or an onward request is in P’s possession;

(b) providing or obtaining information under section 95.

(2) The appropriate authority may by regulations—

(a) limit the amount that may be charged under subsection (1);

(b) prohibit a charge under subsection (1) in specified circumstances or unless specified requirements are met.

(3) If an estate manager charges the owner of a managed dwelling under subsection (1), the charge—

(a) is an administration charge for the purposes of this Part, and

(b) is not to be treated as an estate management charge for the purposes of this Part.

(4) For the purposes of this Part, the costs of—

(a) determining whether information requested in a sales information request or an onward request is in a person’s possession, or

(b) providing or obtaining information under section 95,

are not to be regarded as relevant costs to be taken into account in determining the amount of any estate management charge.

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

Enforcement of sections 95 and 96

97

(1) A person who makes a sales information request or an onward request (“C”) may make an application to the appropriate tribunal on the ground that another person (“D”) failed to comply with a requirement under section 95 or 96 in relation to the request.

(2) The tribunal may make one or more of the following orders—

(a) an order that D comply with the requirement before the end of a period specified by the tribunal;

(b) an order that D pay damages to C for the failure;

(c) if D charged C in excess of a limit specified in regulations under section 96 (2)(a), an order that D repay the amount charged in excess of the limit to C;

(d) if D charged C in breach of regulations under section 96 (2)(b), an order that D repay the amount charged to C.

(3) Damages under subsection (2)(b) may not exceed £5,000.

(4) The appropriate authority may by regulations amend the amount in subsection (3) if the appropriate authority considers it expedient to do so to reflect changes in the value of money.

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

General

Part 5: Crown application

98

(1) Sections 94 to 97 (sales information requests) bind the Crown.

(2) The other provisions of this Part—

(a) apply in relation to estate management carried out by, or on behalf of, a government department and otherwise bind the Crown in relation to such estate management, and

(b) bind the Crown in relation to other estate management only if carried out by, or on behalf of, a person other than the Crown.

Interpretation of Part 5

99

(1) In this Part—

“administration charge” has the meaning given in section 83;

“the appropriate authority” means— in relation to England, the Secretary of State; in relation to Wales, the Welsh Ministers;

“the appropriate tribunal” means— in relation to a dwelling in England, the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal; in relation to a dwelling in Wales, a leasehold valuation tribunal;

“arbitration agreement”, “arbitration proceedings” and “arbitral tribunal” have the same meaning as in Part 1 of the Arbitration Act 1996;

“costs” includes overheads;

“dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, outhouses and appurtenances belonging to it or usually enjoyed with it;

“estate management” has the meaning given in section 72 (see section 72 (2));

“estate management charge” has the meaning given in section 72 (see section 72 (8) and (9));

“estate manager” has the meaning given in section 72 (see section 72 (3) and (4));

“information” includes a document containing information, and a copy of such a document;

“long lease” has the meaning given in section 77(2) of the LRHUDA 1993;

“managed dwelling” has the meaning given in section 72 (see section 72 (5));

“post-dispute arbitration agreement”, in relation to any matter, means an arbitration agreement made after a dispute about the matter has arisen;

“relevant costs” has the meaning given in section 72 (see section 72 (11) and (12));

“relevant obligation” has the meaning given in section 72 (see section 72 (6) and (7));

“rentcharge” has the same meaning as in the RA 1977 (see section 1 of that Act).

(2) For the purposes of this Part, a person is an “owner” of a dwelling if—

(a) the person owns freehold land which comprises the dwelling,

(b) the person is a tenant of the dwelling under a long lease, or

(i) the person owns freehold land which comprises the building, or

(ii) the person is a tenant of the building under a long lease.

Part 6 — Leasehold and estate management: redress schemes

Redress schemes: general

Leasehold and estate management: redress schemes

100

(1) The Secretary of State may by regulations require a person that carries out estate management in respect of a dwelling in England in a relevant capacity to be a member of a redress scheme.

(2) A person carries out estate management in a “relevant capacity” if they do so—

(a) as a relevant landlord of the dwelling, or

(b) as an estate manager.

(3) But a person may not be required to be a member of a redress scheme under this section if they carry out estate management only—

(a) as a tenant, or

(b) as an agent.

(4) A “redress scheme” is a scheme—

(a) which provides for a complaint against a member of the scheme made by or on behalf of a current or former owner of a dwelling in relation to which estate management is carried out to be independently investigated and determined by an independent individual, and

(b) which is—

(i) approved by the lead enforcement authority for the purposes of regulations under subsection (1), or

(ii) administered by or on behalf of the lead enforcement authority and designated by the lead enforcement authority for those purposes.

(5) Regulations under subsection (1) may require a person to remain a member of a redress scheme after ceasing to be a person mentioned in that subsection, for a period specified in the regulations.

(6) Before making regulations under subsection (1), the Secretary of State must be satisfied that all persons who are to be required to be a member of a redress scheme will be eligible to join such a scheme before being so required (subject to any provision in the scheme about expulsion, as to which see section 103 (3)(l)).

(7) For potential consequences of breaching regulations under subsection (1), see—

(a) section 24(2)(ad) of the LTA 1987 and section 92 (3)(e) of this Act (appointment of manager by tribunal);

(b) section 105 of this Act (financial penalties by enforcement authorities).

(8) In this Part—

“estate management” means— the provision of services, the carrying out of maintenance, repairs or improvements, the effecting of insurance, or the making of payments, for the benefit of one or more dwellings;

“estate manager” means a body of persons (whether incorporated or not)— which carries out, or is required to carry out, estate management, and which recovers the costs of carrying out estate management by means of relevant obligations;

“the lead enforcement authority” means either— the Secretary of State, or another person designated by the Secretary of State as the lead enforcement authority, and see section 108 for further provision about the lead enforcement authority;

“relevant landlord”, in relation to a dwelling, means a landlord under a long lease of the dwelling;

“relevant obligation”, in relation to a dwelling, means each of the following— a rentcharge which— is charged on or issues out of the land which comprises the dwelling or a building of which the dwelling forms part, and is an estate rentcharge by virtue of section 2(4)(b) and (5) of the RA 1977; an obligation under a long lease of the dwelling; any other obligation that— runs with the land which comprises the dwelling or a building of which the dwelling forms part, or otherwise (whether in law or in equity) binds the owner for the time being of the land which comprises the dwelling; any other obligation— to which the owner of the dwelling is subject, and to which any immediate successor in title of that owner will become subject, if an arrangement to which a relevant landlord or an estate manager and that owner are parties is performed.

(9) The arrangements that are within paragraph (d) of the definition of “relevant obligation” include an arrangement under which the owner is required (in particular by a limitation on transfer of title to the dwelling or on registration of a transfer of title) to ensure that any immediate successor in title to the owner enters into an obligation.

(10) The Secretary of State may by regulations make provision (including provision amending this Act) for the purpose of changing the meaning of “relevant capacity”, “relevant landlord” or “relevant obligation”.

(11) A statutory instrument containing regulations under this section (whether alone or with other provision) is subject to the affirmative procedure.

Redress schemes: voluntary jurisdiction

101

(1) Nothing in this Part prevents a redress scheme from providing (subject to regulations under section 103)—

(a) for membership to be open to persons who wish to join as voluntary members;

(b) for the investigation or determination of any complaints under a voluntary jurisdiction (including complaints by persons who are not current or former owners of dwellings in relation to which estate management is carried out);

(d) for the exclusion from investigation and determination under the scheme of any complaint in such cases or circumstances as may be specified in or determined under the scheme.

(2) In this Part—

“complaints under a voluntary jurisdiction” means complaints in relation to which there is no duty to be a member of a redress scheme, where the members against which the complaints are made have voluntarily accepted the jurisdiction of the scheme over those complaints;

“voluntary mediation services” means mediation, conciliation or similar processes provided at the request of a member in relation to complaints made— against the member, or by the member against another person;

“voluntary members”, in relation to a scheme, means members who are not subject to a duty to be a member of a redress scheme.

Financial assistance for establishment or maintenance of redress schemes

102

The Secretary of State may give financial assistance (by way of grant, loan, or guarantee, or in any other form) or make other payments to a person for the establishment or maintenance of—

(a) a redress scheme, or

(b) a scheme that would be a redress scheme if it were approved or designated under section 100 (4)(b).

Approval and designation of redress schemes

103

(1) This section applies where the Secretary of State makes regulations under section 100 (1).

(2) The Secretary of State must by regulations set out conditions which are to be satisfied before a scheme is approved or designated under section 100 (4)(b).

(3) The conditions must include conditions requiring the scheme to include provision in accordance with the regulations—

(a) for the appointment of an individual to be responsible for overseeing and monitoring the investigation and determination of complaints under the scheme;

(b) about the terms and conditions of that individual and the termination of their appointment;

(c) about the complaints that may be made under the scheme, which must include provision enabling the making of complaints about non-compliance with any codes of practice that are issued or approved by the Secretary of State;

(d) about the time to be allowed for scheme members to resolve matters before a complaint is accepted under the scheme in relation to those matters;

(e) about the circumstances in which a complaint may be rejected;

(f) about co-operation (which may include the joint exercise of functions) of an individual who is investigating or determining a complaint with persons who have functions in relation to other kinds of complaint and with enforcement authorities;

(g) about the provision of information to the persons mentioned in paragraph (f);

(h) if members are required to pay fees in respect of compulsory aspects of the scheme, about the level of those fees;

(i) if there are voluntary aspects of the scheme—

(i) for fees to be payable in respect of those aspects of the scheme, and

(ii) for the fees to be set at a level that, taking one year with another, is sufficient to meet the costs incurred in the administration of, and the investigation and determination of complaints under, those aspects of the scheme;

(j) for the individual determining a complaint to be able to require members to provide redress of the following types to the complainant—

(i) providing an apology or explanation,

(ii) paying compensation, and

(iii) taking such other actions in the interests of the complainant as the individual determining the complaint may specify;

(k) about the enforcement of the scheme and decisions made under the scheme;

(l) for a person to be expelled from the scheme only—

(i) in circumstances specified in the regulations,

(ii) once steps to secure compliance that are specified in the regulations have been taken, and

(iii) once the decision to expel the person has been reviewed by an independent person in accordance with the regulations;

(m) for an expulsion to be revoked in circumstances specified in the regulations;

(n) prohibiting a person from joining the scheme when the person has been expelled from another redress scheme and the expulsion has not been revoked;

(o) for circumstances in which the administration of the scheme is to be transferred to a different administrator;

(p) about the closure of the scheme by an administrator of the scheme.

(4) Conditions set out in regulations under subsection (3)—

(a) may include conditions requiring an administrator or proposed administrator of a scheme to undertake to do things—

(i) on an ongoing basis following approval or designation;

(ii) after ceasing to be an administrator of the scheme;

(b) in the case of conditions set out in regulations by virtue of subsection (3)(e), may require a scheme to reject complaints by a current or former owner of a dwelling where that owner is of a description specified in the regulations;

(i) require an approved scheme to provide for the administration of that scheme to be transferred to the lead enforcement authority or a person acting on behalf of the lead enforcement authority in circumstances specified in the regulations, and

(ii) where they so require, provide for a scheme whose administration is transferred to be treated as a designated scheme instead of an approved one.

(5) Subsections (3) and (4) do not limit the conditions that may be set out in regulations under subsection (2).

(6) The Secretary of State may by regulations make further provision about the approval or designation of redress schemes under section 100 (4)(b), including provision—

(a) about the number of redress schemes that may be approved or designated (which may be one or more);

(b) about the making of applications for approval;

(d) about the withdrawal of approval or revocation of designation;

(e) authorising the approval or designation of a scheme which provides for fees payable by a compulsory member to be calculated by reference to the total of the costs incurred, or to be incurred, in the administration of the compulsory aspects of the scheme and the investigation and determination of complaints under those aspects of the scheme (including costs unconnected with the member in question).

(7) Regulations under this section may—

(a) confer functions (including functions involving the exercise of discretion) on the lead enforcement authority, or authorise or require a scheme to do so;

(b) provide for the delegation of such functions by the lead enforcement authority, or authorise or require a scheme to provide for that.

(8) In this section—

“compulsory aspects”, in relation to a scheme, means aspects of the scheme relating to complaints in relation to which there is a duty to be a member of a redress scheme;

“compulsory member”, in relation to a scheme, means a member of the scheme who is subject to a duty to be a member of a redress scheme;

“voluntary aspects”, in relation to a scheme, means aspects of the scheme that relate to— complaints under a voluntary jurisdiction, voluntary mediation services, or voluntary members.

(9) A statutory instrument containing regulations under this section (whether alone or with other provision) is subject to the affirmative procedure.

Redress schemes: no Crown status

104

A person exercising functions under a redress scheme (other than the Secretary of State) is not to be regarded as the servant or agent of the Crown or as enjoying any status, privilege or immunity of the Crown or as exempt from any tax, duty, rate, levy or other charge whatsoever, whether general or local, and any property held by such a person is not to be regarded as property of, or held on behalf of, the Crown.

Enforcement

Financial penalties

105

(1) An enforcement authority may impose a financial penalty on a person if satisfied beyond reasonable doubt that the person has breached regulations under section 100 (1).

(2) The Secretary of State may by regulations make provision about the investigation by an enforcement authority of suspected breaches of regulations under section 100 (1) for the purpose of determining whether to impose a financial penalty.

(3) Regulations under subsection (2) may, among other things, make provision about—

(a) co-operation between enforcement authorities, and

(b) the sharing of information between enforcement authorities,

for the purposes of an investigation.

(4) The amount of a financial penalty imposed under this section is to be determined in accordance with section 106.

(5) More than one penalty may be imposed for the same conduct only if—

(a) the conduct continues after the end of 28 days beginning with the day after the day on which the final notice in respect of the previous penalty for the conduct was given to the person, unless the person appeals against that notice within that period, or

(b) if the person appeals against that notice within that period, the conduct continues after the end of 28 days beginning with the day after the day on which the appeal is finally determined, withdrawn or abandoned.

(6) Subsection (5) does not enable a penalty to be imposed after the final notice in respect of the previous penalty has been withdrawn or quashed on appeal.

(7) Schedule 12 makes provision about—

(a) the procedure for imposing a financial penalty under this section,

(b) appeals against financial penalties,

(d) how enforcement authorities are to deal with the proceeds of financial penalties.

(8) For the purposes of this section and section 106—

(a) a financial penalty is imposed on the date specified in the final notice as the date on which the notice is given;

(b) “final notice” has the meaning given by paragraph 3 of Schedule 12.

(9) A statutory instrument containing regulations under this section (whether alone or with other provision) is subject to the affirmative procedure.

Financial penalties: maximum amounts

106

(1) The amount of a financial penalty imposed on a person under section 105 is to be determined by the enforcement authority imposing it, but—

(a) if Case A, B or C applies, the penalty must not be more than £30,000;

(b) otherwise, the penalty must not be more than £5,000.

(2) Case A applies if—

(a) a relevant penalty has been imposed on the person and the final notice imposing the penalty has not been withdrawn, and

(b) the conduct for which the penalty was imposed continues after the end of the period of 28 days beginning with—

(i) the day after the day on which the penalty was imposed on the person, or

(ii) if the person appeals against the final notice in respect of the penalty within that period, the day after the day on which the appeal is finally determined, withdrawn or abandoned.

(3) Case B applies if—

(a) a relevant penalty has been imposed on the person for a breach of regulations under section 100 (1) and the final notice imposing the penalty has not been withdrawn, and

(b) the person engages in conduct which constitutes a different breach of such regulations within the period of five years beginning with the day on which the penalty was imposed.

(4) Case C applies if—

(a) a relevant penalty has been imposed on the person for conduct in respect of which Case A, B or C applies and the final notice imposing the penalty has not been withdrawn, and

(b) the person breaches regulations under section 100 (1) within the period of five years beginning with the day on which the penalty was imposed.

(5) For the purposes of this section, “relevant penalty” means a financial penalty imposed under section 105 where—

(a) the period for bringing an appeal against the penalty under paragraph 5 of Schedule 12 has expired without an appeal being brought,

(b) an appeal against the financial penalty under that paragraph has been withdrawn or abandoned, or

(6) The Secretary of State may by regulations amend the amounts specified in subsection (1) to reflect changes in the value of money.

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

Decision under a redress scheme may be made enforceable as if it were a court order

107

(1) The Secretary of State may by regulations make provision for, or in connection with, authorising an administrator of a redress scheme to apply to a court or tribunal for an order that a determination made under the scheme and accepted by the complainant in question be enforced as if it were an order of a court.

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

Lead enforcement authority: further provision

108

(1) The lead enforcement authority must oversee the operation of a redress scheme under this Part.

(2) The lead enforcement authority must provide—

(a) other enforcement authorities, and

(b) the public in England,

with information and advice about the operation of redress schemes, in such form and manner as the lead enforcement authority considers appropriate.

(3) The lead enforcement authority may disclose information to another enforcement authority for the purposes of enabling that authority to determine whether there has been a breach of regulations under section 100 (1).

(4) The lead enforcement authority may issue guidance to other enforcement authorities about the exercise of their functions under this Part.

(5) Enforcement authorities other than the lead enforcement authority must have regard to any guidance issued under subsection (4).

(6) If the Secretary of State designates a person as the lead enforcement authority for the purposes of this Part—

(a) the Secretary of State may make arrangements in connection with the person’s role as the lead enforcement authority, which may include arrangements—

(i) for payments by the Secretary of State;

(ii) about bringing the arrangements to an end;

(b) the Secretary of State may give the lead enforcement authority directions as to the exercise of any of its functions, which—

(i) may relate to all or particular kinds of enforcement authorities, and

(ii) may make different provision for different purposes;

(i) the operation of redress schemes;

(ii) social and commercial developments relating to estate management (including by relevant landlords) in England, so far as it considers those developments relevant to redress schemes.

(7) The Secretary of State may by regulations make transitional or saving provision which applies when there is a change in the lead enforcement authority (which may relate to a specific change in the lead enforcement authority or to changes that might arise from time to time).

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

Guidance

Guidance for enforcement authorities and scheme administrators

109

(1) The Secretary of State may from time to time issue or approve guidance for enforcement authorities in England and administrators of redress schemes about co-operation between such enforcement authorities and persons exercising functions under the schemes.

(2) An enforcement authority in England other than the Secretary of State must have regard to any guidance issued or approved under this section.

(3) The Secretary of State must exercise the powers in section 103 for the purpose of ensuring that every administrator of a redress scheme has regard to any guidance issued or approved under this section.

Amendments to other Acts

Part 6: amendments to other Acts

110

Schedule 13 makes amendments to other Acts in connection with this Part.

Interpretation

Interpretation of Part 6

111

In this Part—

“complaints under a voluntary jurisdiction” has the meaning given in section 101 (2);

“dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, outhouses and appurtenances belonging to it or usually enjoyed with it;

“enforcement authority” means— the lead enforcement authority, the Secretary of State, a county council in England, a district council, a London borough council, the Common Council of the City of London (in its capacity as a local authority), the Council of the Isles of Scilly, or another person designated by the Secretary of State as an enforcement authority;

“estate management” has the meaning given in section 100 (8);

“estate manager” has the meaning given in section 100 (8);

“the lead enforcement authority” has the meaning given in section 100 (8);

“long lease” has the meaning given in section 77(2) of the LRHUDA 1993;

“owner”, in relation to a dwelling, means— the owner of freehold land which comprises the dwelling; a tenant under a long lease of the dwelling;

“redress scheme” has the meaning given in section 100 (4);

“relevant capacity” has the meaning given in section 100 (2);

“relevant landlord” has the meaning given in section 100 (8);

“relevant obligation” has the meaning given in section 100 (8);

“rentcharge” has the same meaning as in the RA 1977 (see section 1 of that Act);

“voluntary mediation services” has the meaning given in section 101 (2);

“voluntary members” has the meaning given in section 101 (2).

Part 7 — Rentcharges

Meaning of “estate rentcharge”

112

In section 2(4)(b) of the RA 1977 (meaning of “estate rentcharge”), for “or repairs” substitute “, repairs or improvements”.

Regulation of remedies for arrears of rentcharges

113

(1) The Law of Property Act 1925 is amended in accordance with this section.

(2) Before section 121 insert—

(120A) (1) For the purposes of sections 120B to 122 a rentcharge is “regulated” if it is of a kind that could not be created in accordance with section 2 of the Rentcharges Act 1977. (2) In sections 120B to 120D— - “charged land” means the land which is, or the land the income of which is, charged by the rentcharge; - “demand for payment” means a notice under section 120B (1)(a) demanding payment of regulated rentcharge arrears; - “landowner”, in relation to a sum that is charged by rentcharge, means the person who holds the charged land; - “regulated rentcharge arrears” means a sum charged by a regulated rentcharge that is unpaid after the time appointed for its payment; - “rent owner”, in relation to a sum that is charged by rentcharge, means the person who holds title to the rentcharge. (120B) (1) No action to recover or compel payment of regulated rentcharge arrears may be taken unless— (a) the rent owner has served the landowner with notice demanding payment of those arrears, (b) the demand for payment complies with the requirements of subsection (2), (c) the demand for payment either— (i) complies with the requirements of subsection (3), or (ii) does not need to comply with those requirements (see subsection (5)), and (d) the period of 30 days, beginning with the day on which the demand for payment is served, has ended. (2) The demand for payment must set out— (a) the name of the rent owner; (b) the address of the rent owner and, if that address is not in England and Wales, an address in England and Wales at which notices (including notices in proceedings) may be served on the rent owner by the landowner; (c) the amount of the regulated rentcharge arrears; (d) how that amount has been calculated; (e) details of how to pay that amount. (3) The demand for payment must set out, or be served with— (a) a copy of the instrument creating the regulated rentcharge; (b) proof that title to the regulated rentcharge is held by the rent owner. (4) The demand for payment is to be taken to comply with the requirement in subsection (3)(b) if— (a) in a case where the rent owner’s title to the regulated rentcharge is registered at the Land Registry, the demand includes a copy of that registered title; or (b) in a case where title to the regulated rentcharge is not registered at the Land Registry, the demand includes copies of the instruments by which title to the rentcharge has passed to the rent owner. (5) A demand for payment served by a rent owner on a landowner in relation to a regulated rentcharge does not need to comply with subsection (3) if— (a) a previous demand for payment that has been served by that rent owner on that landowner in relation to that rentcharge complied with that subsection, and (b) since the service of that previous demand, there has been no material change in the matters to which subsection (3) relates. (6) No sum is payable by the landowner in respect of the preparation or service of a demand for payment (including obtaining or preparing documents or copies in order to comply with subsection (3)). (7) This section applies to action to recover or compel payment of rentcharge arrears whether the action is authorised by this Act or is otherwise available (and includes bringing proceedings). (120C) (1) This section applies if— (a) notice under section 120B demanding the payment of rentcharge arrears is served in compliance with the requirements of section 196(3) or (4), but (b) the place of abode or business at which the notice is left, or to which the notice is sent, in compliance with those requirements is not the charged land. (2) The notice is sufficiently served only if (in addition to complying with the requirements of section 196(3) or (4))— (a) it is affixed or left for the landowner on the charged land, or (b) it is sent by post in a registered letter addressed to the landowner, by name, at the charged land, and if that letter is not returned by the postal operator (within the meaning of Part 3 of the Postal Services Act 2011) concerned undelivered; and that service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered. (120D) (1) The Secretary of State may by regulations limit the amounts payable by landowners, directly or indirectly, in respect of action to recover or compel payment of regulated rentcharge arrears. (2) Regulations under this section may (in particular) provide that no amount is to be payable by landowners in respect of particular descriptions of action to recover or compel payment of regulated rentcharge arrears. (3) Regulations under this section may make— (a) different provision for different cases; (b) transitional or saving provision. (4) Regulations under this section are to be made by statutory instrument. (5) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.

(3) In section 121 (remedies for the recovery of annual sums charged on land) after subsection (1) insert—

(1A) But where such a sum is charged by way of a regulated rentcharge, the rent owner does not have any of those remedies for recovering and compelling payment of the sum on and after 27 November 2023.

(4) In section 122 (creation of rentcharges charged on another rentcharge and remedies for recovery thereof), after subsection (1) insert—

(1A) But on and after 27 November 2023 such a rentcharge or other annual sum may not be granted, reserved, charged or created out of or on another rentcharge if it is a regulated rentcharge.

(5) The amendments made by subsections (1) to (4) have effect in relation to rentcharge arrears arising before or after the coming into force of this section.

(6) After section 122 insert—

(122A) An instrument creating a rentcharge, or a contract or any other arrangement, (whenever entered into) is of no effect to the extent that it makes provision that is contrary to— (a) section 120B, 120C, 121(1A) or 122(1A), or (b) regulations under section 120D.

Part 8 — Amendments of Part 5 of the Building Safety Act 2022

Remediation of building defects

Steps relating to remediation of defects

114

(1) The BSA 2022 is amended as follows.

(2) In the heading of section 120 (meaning of “relevant defect”), at the end insert “and “relevant steps””.

(3) In section 120, after subsection (4) insert—

(4A) “Relevant steps”, in relation to a relevant defect, means steps which have as their purpose— (a) preventing or reducing the likelihood of a fire or collapse of the building (or any part of it) occurring as a result of the relevant defect, (b) reducing the severity of any such incident, or (c) preventing or reducing harm to people in or about the building that could result from such an incident.

(4) In Schedule 8 (remediation costs under qualifying leases etc), in paragraph 1(1)—

(a) omit the definitions of “building safety risk” and “relevant risk”;

(b) for the definition of “relevant measure” substitute—

“relevant measure”, in relation to a relevant defect, means— a measure taken to remedy the relevant defect, or a relevant step taken in relation to the relevant defect;

“relevant step”: see section 120;

Remediation orders

115

(1) Section 123 of the BSA 2022 (remediation orders) is amended in accordance with subsections (2) to (4).

(2) In subsection (2), for “remedy specified relevant defects in a specified relevant building by a specified time” substitute

do one or both of the following by a specified time— (a) remedy specified relevant defects in a specified relevant building; (b) take specified relevant steps in relation to a specified relevant defect in a specified relevant building.

(3) For subsection (6) substitute—

(6) In this section— - “relevant building”: see section 117; - “relevant defect”: see section 120; - “relevant steps”: see section 120; - “specified” means specified in the order.

(4) After subsection (7) insert—

(8) In proceedings for a remediation order, a direction given by the First-tier Tribunal requiring a relevant landlord to provide or produce an expert report is to be regarded as a decision for the purposes of subsection (7). (9) In subsection (8), “expert report” means an expert report or survey relating to— (a) relevant defects, or potential relevant defects, in a relevant building; (b) relevant steps taken or that might be taken in relation to a relevant defect in a relevant building.

(5) The amendments made by this section apply in relation to proceedings for a remediation order as mentioned in section 123 of the BSA 2022 which are pending on the day on which those amendments come into force (as well as proceedings for such an order which are commenced on or after that day).

Remediation contribution orders

116

(1) Section 124 of the BSA 2022 (remediation contribution orders) is amended in accordance with subsections (2) to (6).

(2) In subsection (2), after “remedying” insert “, or otherwise in connection with,”.

(3) After subsection (2) insert—

(2A) The following descriptions of costs, among others, fall within subsection (2)— (a) costs incurred or to be incurred in taking relevant steps in relation to a relevant defect in the relevant building; (b) costs incurred or to be incurred in obtaining an expert report relating to the relevant building; (c) temporary accommodation costs incurred or to be incurred in connection with a decant from the relevant building (or from part of it) that took place or is to take place— (i) to avoid an imminent threat to life or of personal injury arising from a relevant defect in the building, (ii) (in the case of a decant from a dwelling) because works relating to the building created or are expected to create circumstances in which those occupying the dwelling cannot reasonably be expected to live, or (iii) for any other reason connected with relevant defects in the building, or works relating to the building, that is prescribed by regulations made by the Secretary of State. (2B) The Secretary of State may make regulations for the purposes of this section specifying descriptions of costs which are, or are not, to be regarded as falling within subsection (2).

(4) In subsection (3), after “specified” insert “as a person required to make payments”.

(5) In subsection (4)—

(a) in paragraph (a), omit from “or payments” to the end;

(b) after paragraph (a) insert—

(aa) if it does not require the making of payments of a specified amount, determine that a specified body corporate or partnership is liable for the reasonable costs of specified things done or to be done;

(6) In subsection (5)—

(a) after the definition of “developer” insert—

“expert report” has the meaning given by section 123(9);

;

(b) after the definition of “relevant defect” insert—

“relevant steps”: see section 120;

;

“temporary accommodation costs”, in relation to a decant from a relevant building, means— the costs of the temporary accommodation, and other costs resulting from the decant, including removal costs, storage costs and reasonable travel costs;

“works” means works— to remedy a relevant defect in a relevant building, or in connection with the taking of relevant steps in relation to such a defect.

(7) The amendments made by this section apply—

(a) in relation to proceedings for a remediation contribution order under section 124 of the BSA 2022 which are pending on the day on which those amendments come into force (as well as proceedings for such an order which are commenced on or after that day);

(b) in relation to costs incurred before as well as after those amendments come into force.

Recovery of legal costs etc through service charge

117

(1) Schedule 8 to the BSA 2022 (remediation costs under qualifying leases etc) is amended in accordance with subsections (2) and (3).

(2) After paragraph 9(1) insert—

(1A) Sub-paragraph (1) does not apply to the extent that the service charge is payable to a management company in respect of legal or other professional services provided to the company in connection with an application or possible application by the company for or relating to a remediation contribution order under section 124.

(3) After paragraph 9(2) insert—

(3) In sub-paragraph (1A) “management company” means— (a) a resident management company, or (b) an RTM company within the meaning of Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002 (right to manage). (4) “Resident management company” means a body corporate which is party to a lease of a building where— (a) the body corporate is limited by guarantee and the members of that body are tenants under leases of dwellings in the building (“leaseholders”), or (b) the majority of the shares of the body corporate are held by leaseholders.

(4) The amendments made by this section do not apply in relation to legal or other professional services provided before this section comes into force.

Repeal of section 125 of the BSA 2022

118

(1) Omit section 125 of the BSA 2022 (meeting remediation costs of insolvent landlord).

(2) In consequence of that repeal—

(a) in section 116(1), for “125” substitute “124”;

(b) omit section 116(2)(e);

(d) in section 119(1), for “125” substitute “124”;

(e) in section 119A(9), for “125” substitute “124”;

(f) in section 120(1), for “125” substitute “124”;

(g) in section 121(1), for “125” substitute “124”;

(h) in section 164(1)(c), for “125” substitute “124”.

Insolvency of responsible persons

Higher-risk and relevant buildings: notifications in connection with insolvency

119

Before section 126 of the BSA 2022 (and the italic heading before it) insert—

(125A) (1) This section applies if an insolvency practitioner is appointed in relation to a responsible person for a higher-risk building or a relevant building. (2) For the purposes of this section, a person is “a responsible person” for a building if— (a) in the case of a higher-risk building, the person is an accountable person for the building (see section 72 for the meaning of “accountable person” for a higher-risk building); (b) in the case of a relevant building that is not a higher-risk building, the person would be an accountable person for the building if section 72 were read as applying to such a building (and as if the reference in that section to a residential unit were a reference to a dwelling). (3) The insolvency practitioner must give the information in subsection (6) (“the required information”) to— (a) the local authority for the area in which the building for which the person is a responsible person is situated, or (if applicable) each local authority in whose area a building for which the person is a responsible person is situated, and (b) the fire and rescue authority for the area in which the building for which the person is a responsible person is situated, or (if applicable) each fire and rescue authority in whose area a building for which the person is a responsible person is situated. (4) If the insolvency practitioner is appointed in relation to an accountable person for a higher-risk building, the practitioner must also give the required information to the regulator. (5) The required information must be provided within the period of 14 days beginning with the day on which the insolvency practitioner is appointed. (6) The information is as follows— (a) the name and address of the person in relation to whom the insolvency practitioner is appointed; (b) the address of each higher-risk building or relevant building for which the person is a responsible person (but see subsection (7)); (c) an official copy of the register of title and title plan relating to each registered estate or interest the person holds in such a building, if any (but see subsection (7)); (d) the nature of the practitioner’s appointment; (e) the practitioner’s name, address, telephone number and email address (if any); (f) so much of the information set out in the table in rule 1.6 of the Insolvency (England and Wales) Rules 2016 (S.I. 2016/1024) as is known to the practitioner. (7) A local authority or fire and rescue authority need only be notified about buildings, or registered estates or interests in buildings, in their area. (8) In this section “insolvency practitioner” means— (a) an administrator; (b) an administrative receiver; (c) a receiver appointed by the courts or by a mortgagee; (d) a liquidator; (e) a trustee in bankruptcy. (9) In this section— - “fire and rescue authority” has the meaning given by section 30; - “higher-risk building” has the same meaning as in Part 4 (see section 65); - “local authority” has the meaning given by section 30; - “register of title” means the register kept under section 1 of the Land Registration Act 2002; - “the regulator” has the meaning given by section 2; - “relevant building” has the meaning given by section 117; - “title plan” means a plan based on the Ordnance Survey map and referred to in the register of title.

Part 9 — General

Interpretation of references to other Acts

120

In this Act—

“the BSA 2022” means the Building Safety Act 2022;

“the CLRA 2002” means the Commonhold and Leasehold Reform Act 2002;

“the LRA 1967” means the Leasehold Reform Act 1967;

“the LRHUDA 1993” means the Leasehold Reform, Housing and Urban Development Act 1993;

“the LR(GR)A 2022” means the Leasehold Reform (Ground Rent) Act 2022;

“the LTA 1985” means the Landlord and Tenant Act 1985;

“the LTA 1987” means the Landlord and Tenant Act 1987;

“the RA 1977” means the Rentcharges Act 1977.

Power to make consequential provision

121

(1) The Secretary of State may by regulations make provision that is consequential on this Act.

(2) Regulations under this section may amend, repeal or revoke provision made by or under—

(a) an Act of Parliament passed before, or in the same Session as, this Act, or

(b) this Act.

(3) A statutory instrument containing (whether alone or with other provision) regulations under this section that amend or repeal provision made by an Act of Parliament is subject to the affirmative procedure.

(4) Any other statutory instrument containing regulations under this section is subject to the negative procedure.

Regulations

122

(1) A power to make regulations under any provision of this Act includes power to make—

(a) consequential, supplementary, incidental, transitional or saving provision;

(b) different provision for different purposes.

(2) A power to make regulations under Part 6 also includes power to make different provision for different areas.

(3) Regulations under this Act are to be made by statutory instrument.

(4) In this Act, if a statutory instrument is “subject to the affirmative procedure” it may not be made unless—

(a) where it contains (whether alone or with other provision) regulations made by the Secretary of State, a draft of the instrument has been laid before and approved by a resolution of each House of Parliament;

(b) where it contains (whether alone or with other provision) regulations made by the Welsh Ministers, a draft of the instrument has been laid before and approved by a resolution of Senedd Cymru.

(5) In this Act, if a statutory instrument is “subject to the negative procedure” it 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.

(6) If a draft of a statutory instrument containing regulations under Part 6 would, apart from this subsection, be treated for the purposes of the standing orders of either House of Parliament as a hybrid instrument, it is to proceed in that House as if it were not a hybrid instrument.

(7) This section does not apply to regulations under section 124.

Extent

123

(1) This Act extends to England and Wales only, subject to subsection (2).

(2) Section 23 (5) extends to England and Wales, Scotland and Northern Ireland.

Commencement

124

(1) This Part comes into force on the day on which this Act is passed.

(2) The following provisions come into force at the end of the period of two months beginning with the day on which this Act is passed—

(a) section 113 (regulation of remedies for rentcharge arrears);

(b) section 117 (recovery of legal costs etc through service charge);

(d) section 119 (higher-risk and relevant buildings: notifications in connection with insolvency).

(3) The other provisions of this Act come into force on such day or days as the Secretary of State may by regulations appoint.

(4) The Secretary of State may by regulations make transitional or saving provision in connection with the coming into force of any provision of this Act.

(5) The power to make regulations under this section includes power to make different provision for different purposes.

(6) Regulations under this section are to be made by statutory instrument.

Short title

125

This Act may be cited as the Leasehold and Freehold Reform Act 2024.

Schedule 1

Part 1 — Categories of permitted lease for Tribunal certification

Leases granted out of historic leasehold estates

1

A lease granted out of a leasehold estate (the “superior leasehold estate”) where—

(a) the superior leasehold estate was granted before 22 December 2017, or

(b) the superior leasehold estate was granted on or after 22 December 2017 in pursuance of an agreement entered into before that date.

Community housing leases

2

(1) A lease that—

(a) is a community housing lease, and

(b) meets any further conditions which may be specified in regulations made by the Secretary of State.

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