ALEP responds to Law Commission’s leasehold reforms recommendations

Tuesday 21 July 2020

“A victory for common sense”

ALEP responds to Law Commission’s leasehold reforms recommendations

The Association of Leasehold Enfranchisement Practitioners (ALEP) has reviewed the Law Commission’s three highly anticipated reports concerning the future of leasehold and Commonhold reform. The three reports recommend reforms to: leasehold enfranchisement; the right to manage; reinvigorating commonhold.  

Leasehold home ownership has been under media and political scrutiny over recent years and the three reports contain a number of recommendations that would “significantly improve the position of homeowners in England and Wales”, and change the complexion of the existing leasehold enfranchisement sector in a bid to overhaul the system to make it fairer all-round. 

ALEP Director, Mark Chick attended this morning’s All-Party Parliamentary Group session on Leasehold and Commonhold Reform. He commented: “The publication of these long-awaited reports are welcome reading to the entire sector. Incredibly detailed, the reports set out some radical changes which would cause profound implications to current leasehold enfranchisement systems – of course, the decision is ultimately in the Government’s hands, but today’s recommendations set out viable ways to shape reform. We also very pleased to see that the Law Commission has taken onboard a number of the suggestions ALEP has been making for many years.” 

A significant recommendation in the leasehold enfranchisement report outlines the creation of a new law which would see lease extensions under statute of 990 years, as opposed to 90 or 50 years as is currently the case, with no ongoing ground rent. A radical, but sensible, shift in emphasis. 

Mark said: “Notably, the leasehold enfranchisement report recommends the abolition of the two-year ownership requirement. We welcome the simplification of this system and have been vocal about the two-year ownership rule since the Association’s inception in 2007! Abandoning this policy will create a fairer system for all and allow leasehold enfranchisement claims to take place more quickly and efficiently. It will give leaseholders the flexibility of being able to carry out an enfranchisement claim as soon as they acquire their lease, rather than having to wait for two years as per current legislation.” 

Further recommendations for this section include more leaseholders having the freedom to be able to collectively purchase the freehold of their block or take over the management of the block.  

The right to manage report proposes making this process easier, quicker and cheaper and removing ‘procedural traps’ - a very welcome proposition which would make the right to manage process simpler for all parties involved. 

Furthermore, the reinvigorating Commonhold report outlines how Commonhold is not only suitable alternative, but a preferred option to residential leasehold. If adopted, this would shake up the entire leasehold system as we know it. 

Mark concluded: “We commend the Law Commission for delivering its brief so effectively and producing such detailed and comprehensive reports. ALEP prides itself in promoting clarity and best practice across the enfranchisement sector. Our Association and members are proud to have been proactive in providing technical feedback to the Law Commission throughout this consultation process for these recommendation reports. 

“In terms of the next stages, we eagerly await the Government’s response to the recommendations set out. It is now down to the law makers to implement these changes. However, as ALEP represents practitioners operating within the specialist field of enfranchisement, we are best placed to advise Government on how to execute the technicalities of these suggested reforms. 

“Whilst these proposed reforms may not be Implemented for another two to three years, there is no doubt that there is a tricky road ahead. It is imperative that the sector’s professionals are included in further discussions about legislation changes to ensure a smooth transition as inevitable future reforms ensue.

“Over the coming weeks ALEP and its members will take time to fully digest the detailed implications of what has been set out today. We will be working closely with our members over the coming days to seek their viewpoints on the recommendations.”  

A further, more detailed, response to the reports from ALEP will follow.