Leasehold and Freehold Reform Act 2024

• “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

• (c) where the dwelling is part of a building—

• (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);

• (c) for voluntary mediation services;

• (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;

• (c) in the case of conditions set out in regulations by virtue of subsection (3)(o), may—

• (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;

• (c) about the period for which an approval or designation is valid;

• (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,

• (c) enforcement of financial penalties, and

• (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

• (c) the final notice imposing the penalty has been confirmed or varied on appeal.

• (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;

• (c) the lead enforcement authority must keep under review and from time to time advise the Secretary of State about—

• (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;

;

• (c) after the definition of “specified” insert—

• “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);

• (c) in section 117(1), for “125” substitute “124”;

• (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);

• (c) section 118 (repeal of section 125 of the BSA 2022);

• (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.

• (2) A lease is a community housing lease if—

• (a) the landlord under the lease is a community land trust within the meaning of section 2(7A) of the LR(GR)A 2022 (excepted leases), or

• (b) it is a lease of a house which is, or is in, a building within paragraph 2B of Schedule 14 to the Housing Act 2004 (buildings controlled or managed by co-operative societies), disregarding sub-paragraph (3)(b) of that paragraph.

• (3) A statutory instrument containing regulations made under sub-paragraph (1)(b) is subject to the negative procedure.

Retirement housing leases

3

• (1) A lease that—

• (a) is a retirement housing lease, and

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

• (2) A lease is a retirement housing lease if—

• (a) it is a term of the lease that the house comprised in the lease may be occupied only by persons who have attained a minimum age,

• (b) that minimum age is not less than 55, and

• (c) the house comprised in the lease is part of a retirement development or scheme in which the leases of all the houses in that development or scheme meet the requirements set out in paragraphs (a) and (b).

• (3) A statutory instrument containing regulations made under sub-paragraph (1)(b) is subject to the negative procedure.

Leases of certain National Trust property

4

A lease of a house where the house comprised in the lease—

• (a) is a property or part of a property vested inalienably in the National Trust for Places of Historic Interest or Natural Beauty (“the National Trust”) under section 21 of the National Trust Act 1907, or

• (b) is inalienable by the National Trust by virtue of section 8 of the National Trust Act 1939.

Leases granted by the Crown

5

• (1) A lease granted out of a freehold estate by the Crown.

• (2) In this paragraph “the Crown” means—

• (a) His Majesty in right of the Crown, in right of His private estates, or in right of the Duchy of Lancaster, or

• (b) the Duchy of Cornwall.

Part 2 — Categories of permitted lease for self-certification

Leases agreed before commencement

6

A lease granted in pursuance of an agreement entered into before the day on which section 1 comes into force.

Shared ownership leases

7

• (1) A lease that—

• (a) is a shared ownership lease, and

• (b) meets conditions A to D.

• (2) But conditions C and D do not need to be met if the shared ownership lease is of a description specified for this purpose in regulations made by the Secretary of State.

• (3) A shared ownership lease means a lease of a house—

• (a) granted on payment of a premium calculated by reference to a percentage of the value of the house or of the cost of providing it, or

• (b) under which the tenant (or the tenant’s personal representatives) will or may be entitled to a sum calculated by reference, directly or indirectly, to the value of the house.

• (4) Condition A: the lease allows for the tenant to increase the tenant’s share in the house by increments of 25% or less (whether or not the lease also provides for increments of more than 25%).

• (5) Condition B: the lease provides—

• (a) for the price payable for an increase in the tenant’s share in the house to be proportionate to the market value of the house at the time the share is to be increased, and

• (b) if the tenant’s share is increased, for the rent payable by the tenant in respect of the landlord’s share in the house to be reduced by an amount reflecting the increase in the tenant’s share.

• (6) Condition C: the lease allows for the tenant’s share in the house to reach 100%.

• (7) Condition D: if and when the tenant’s share in the house is 100%, the tenancy—

• (a) allows for the tenant to acquire the freehold of the house (if the landlord has the freehold), or

• (b) provides that the terms of the lease which make the lease a shared ownership lease cease to have effect (if the landlord does not have the freehold),

without the payment of further consideration.

• (8) A statutory instrument containing regulations made under sub-paragraph (2) is subject to the negative procedure.

Home finance plan leases

8

• (1) A lease that —

• (a) is a home finance plan lease, and

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

• (2) A lease is a home finance plan lease if—

• (a) it is granted pursuant to an arrangement which is a regulated home reversion plan within the meaning of Article 63B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544), or

• (b) it is granted by a finance provider to a home buyer, pursuant to a rent to buy arrangement.

• (3) A “rent to buy arrangement” is an arrangement in relation to which the following conditions are met—

• (a) a person (the “finance provider”) buys a qualifying interest, or an undivided share of a qualifying interest, in land, and

• (b) the arrangement provides for the obligation of another person (the “home buyer”) to buy the interest bought by the finance provider over the course of, or at the end of, a specified period.

• (4) A “qualifying interest in land” means an estate in fee simple absolute or a term of years absolute, whether subsisting at law or in equity.

• (5) A statutory instrument containing regulations made under sub-paragraph (1)(b) is subject to the negative procedure.

Extended leases

9

• (1) An extended lease, which is a lease that falls within any of cases A to C.

• (2) Case A: a lease of a house granted under Part 1 of the LRA 1967 (tenant of leasehold house entitled to extended lease) in substitution for a lease of a house granted before this Part comes into force.

• (3) Case B: a lease of a house granted in consideration of the surrender in whole or part of a lease of that house granted before this Part comes into force.

• (4) Case C: a lease of a house which takes effect as a deemed surrender and regrant of a lease of a house granted before this Part comes into force.

Agricultural leases

10

An agricultural lease, which is a lease where the house is comprised in—

• (a) an agricultural holding within the meaning of the Agricultural Holdings Act 1986 which is held under a tenancy to which that Act applies, or

• (b) a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995.

Schedule 2

Notice of intent

1

• (1) Before imposing a financial penalty on a person under section 18, an enforcement authority must give the person notice of its proposal to do so (a “notice of intent”).

• (2) A notice of intent must set out—

• (a) the date on which it is given,

• (b) the amount of the proposed penalty,

• (c) the reasons for proposing to impose the penalty, and

• (d) information about the right to make representations under paragraph 3.

Time limits for notice of intent

2

• (1) A notice of intent may not be given to a person in respect of a breach of a leasehold house restriction after the earlier of the following—

• (a) the end of the period of 6 years beginning with the day the breach occurs, and

• (b) the end of the period of 6 months beginning with the day on which evidence comes to the knowledge of the enforcement authority which the authority considers sufficient to justify giving the notice.

• (2) For the purposes of sub-paragraph (1)(a)—

• (a) a breach of section 1(1) or 10(1) occurs on the day the lease is granted or (as the case may be) the agreement is entered into (or, in the case of a breach of either of those provisions consisting of entering into an agreement to grant a lease and subsequently granting it, the day on which the agreement is entered into);

• (b) a breach of section 1(2) occurs on the day of the assignment or (as the case may be) the agreement is entered into (or, in the case of a breach of that provision consisting of entering into an agreement to assign a lease and subsequently assigning it, the day on which the agreement is entered into);

• (c) a breach of section 9(2) occurs on the day the marketing material is made available (or, in the case of marketing material made available in relation to the same lease on more than one occasion, the first day on which such material is made available).

Right to make written representations

3

A person who is given a notice of intent may, within the period of 28 days beginning with the day on which the notice is given, make written representations about the proposal.

Final notice

4

• (1) After the period allowed for representations has expired, the enforcement authority must—

• (a) decide whether to impose a penalty on the person, and

• (b) if it decides to do so, decide the amount of the penalty.

• (2) If the enforcement authority decides to impose a penalty, it must do so by giving the person a notice (a “final notice”).

• (3) A final notice must require the penalty to be paid before the end of the period of 28 days beginning with the day after that on which the notice is given.

• (4) A final notice must set out—

• (a) the date on which it is given,

• (b) the amount of the penalty,

• (c) the reasons for imposing the penalty,

• (d) information about how to pay the penalty,

• (e) the period for payment of the penalty,

• (f) information about rights of appeal, and

• (g) the consequences of failure to comply with the notice.

Withdrawal or amendment of notice

5

An enforcement authority may at any time—

• (a) withdraw a notice of intent or final notice, or

• (b) reduce an amount specified in a notice of intent or final notice,

by giving a notice to that effect to the person to whom the notice of intent or final notice is given.

Appeals

6

• (1) A person who is given a final notice may appeal to the appropriate tribunal against—

• (a) the decision to impose the penalty, or

• (b) the amount of the penalty.

• (2) An appeal must be brought before the end of the period of 28 days beginning with the day after that on which the final notice is given.

• (3) If an appeal is brought under this paragraph, the final notice is suspended so far as it relates to the matter which is the subject of the appeal until the appeal is finally determined or withdrawn.

• (4) An appeal under this paragraph—

• (a) is to be a re-hearing of the enforcement authority’s decision, but

• (b) may be determined having regard to evidence which was not available to the authority when giving the notice.

• (5) On an appeal under this paragraph the appropriate tribunal may quash, confirm or vary the notice.

• (6) If the appropriate tribunal varies the amount of the penalty imposed by the notice, the new amount must be an amount that the enforcement authority had power to impose.

Recovery of penalty

7

• (1) A penalty is recoverable by the enforcement authority that imposed it, if the county court so orders, as if it were payable under an order of that court.

• (2) In proceedings before the county court for the recovery of a penalty, a certificate that—

• (a) is signed by the chief finance officer of the authority that imposed the penalty, and

• (b) states that the amount due has not been received by a date specified in the certificate,

is evidence of that fact.

• (3) A certificate to that effect and purporting to be so signed is to be treated as being so signed unless the contrary is proved.

• (4) In this paragraph “chief finance officer” has the same meaning as in section 5 of the Local Government and Housing Act 1989.

Proceeds of penalties

8

An enforcement authority may apply the proceeds of a penalty towards meeting the costs and expenses (whether administrative or legal) incurred in, or associated with, carrying out its enforcement functions under this Part.

9

Any proceeds of a penalty which are not applied in accordance with paragraph 8 must be paid—

• (a) if the penalty was imposed in relation to a lease of a house in England, to the Secretary of State;

• (b) if the penalty was imposed in relation to a lease of a house in Wales, to the Welsh Ministers.

Manner of giving notices

10

• (1) The Secretary of State may by regulations make provision about—

• (a) how any notice under this Schedule is to be given to a person;

• (b) when such a notice is to be treated as being given.

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

Interpretation

11

In this Schedule—

• “enforcement authority” has the meaning given by section 26;

• “leasehold house restriction” has the meaning given by section 17(2);

• “notice” means notice in writing;

• “penalty” means a financial penalty under section 18.

Schedule 3

Removal of redevelopment restrictions on enfranchisement and extension

1

• (1) In section 17 of the LRA 1967 (redevelopment rights)—

• (a) omit subsections (4) and (5);

• (b) in subsection (6)(a), omit the words from “, or” to “application”.

• (2) Omit sections 23 and 47 of the LRHUDA 1993 (tenants’ claim liable to be defeated where landlord intends to redevelop).

Removal of residential restriction on enfranchisement and extension under the LRA 1967

2

Omit section 18 of the LRA 1967 (residential restriction on enfranchisement and extension rights).

Removal of public purposes restriction on enfranchisement and extension under the LRA 1967

3

Omit section 28 of the LRA 1967 (restrictions on enfranchisement and extension where land required for public purposes).

Exception to enfranchisement for certified community housing providers

4

• (1) The LRA 1967 is amended as follows.

• (2) In section 1 (tenants eligible for enfranchisement and extension), after subsection (1B) insert—

(1C) This Part of this Act does not confer on a tenant a right to acquire the freehold of a house and premises if the landlord under the existing tenancy is a certified community housing provider (see section 4B).

• (3) After section 4A insert—