Big day for Leasehold reform as Law Commission issues reports

It’s a big day for leasehold reform today with the Law Commission due to publish three residential leasehold and commonhold reports.

They will be formally launched at an All-Party Parliamentary Group on Leasehold and Commonhold Reform taking place at 10am.

The Commission’s brief, given to it by the Ministry of Housing, Communities and Local Government, was to conduct a full review of enfranchisement law and procedure. 

The reports today are expected to build on one issued by the Law Commission in January, and still said to be “under consideration” by Housing Secretary Robert Jenrick.

The January report gave three options for the future of leasehold, each using a different method to determine the price of enfranchisement and - in the words of the commission to allow further reforms to make the process simpler and to reduce uncertainty. 

That report made much of using simple formulae – such as a multiple of ground rent – in delivering reforms.

Alongside the three schemes, the Law Commission put forward a range of other options for reform. These included:

- Prescribing the rates used in calculating the price, to remove a key source of disputes, and make the process simpler, more certain and predictable;

- Helping leaseholders with onerous ground rents, by capping the level of ground rent used to calculate the premium;

- The creation of an online calculator for determining the premium to make it easier to find out the cost of enfranchisement, and reduce uncertainty around the process; and

- Enabling leaseholders who are collectively enfranchising a block of flats to avoid paying “development value” to the landlord unless and until they actually undertake further development.