A year on from the Leasehold and Freehold Reform Act 2024 abolishing the two-year ownership requirement for lease extensions and enfranchisement claims, our Enfranchisement Specialist, Katherine Thorpe, details the impact it is having and whether everyone is actual aware of its removal.
This landmark change means leaseholders no longer need to own their leasehold property for two years before applying for a statutory lease extension of a flat or house, or enfranchisement (purchasing the freehold) of a leasehold house, which removes the long-standing barrier that often delays leaseholders from extending their lease especially those with a short term.
A positive step for leaseholders
For leaseholders, the reform has been widely welcomed. Leaseholders no longer need to wait two years before exercising statutory rights, giving them greater flexibility and control, particularly where lease length is already a concern. In principle, this also reduces reliance on sellers starting and assigning statutory claims as part of the conveyancing process.
Why are assignments still being used?
Despite the removal of the two-year rule, sellers are still frequently assigning the benefit of statutory claims to buyers. This trend may stem from lack of awareness of the change, lender’s requirements, or a desire to continue with familiar processes.
Managing Agents and Freeholders: Practical Implications
Managing agents may see statutory claims being brought much sooner after completion, increasing the need for early engagement and clear communication. Ongoing Land Registry delays continue to present practical challenges, particularly where updated title information is required.
For freeholders, the reform does not remove existing rights or protections but does accelerate the point at which claims may arise. The statutory framework remains unchanged, and statutory claims must still comply fully with procedural requirements including accurately identifying the qualifying leaseholder and producing evidence of their ownership.
Looking Ahead
The abolition of the two-year rule is an important step in leasehold reform, but it is only part of a wider package. Uncertainty remains around the implementation of other provisions of the Act, particularly those affecting valuation and costs.
As the market continues to adjust, specialist advice remains essential for all parties navigating lease extensions and enfranchisement under the evolving legal landscape.
