Magee Gammon News Leasehold reforms come into effect

Leasehold reforms come into effect

Major changes to leasehold in England and Wales came into effect on 30 June, including the abolition of ground rent for qualifying new leases, apart from retirement properties, for which it will be abolished in April 2023.

The new legislation was introduced in response to concerns about spiralling ground rents, particularly about new build developments. Crucially, however, the changes do not apply to existing leases, business leases, statutory lease extensions, or community housing leases.

Ground rent payments in respect of existing leases will continue as usual. Landlords should seek legal advice if they are in any doubt about whether ground rent can be charged on a lease.

Unlawfully charging ground rent can lead to fines of between £500 and £30,000.

Link: Leasehold Reform (Ground Rent) Act 2022

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