The government has confirmed its intention to solve the lease extension issues facing leaseholders as part of a wider upcoming leasehold reform bill – but action is not expected until the next Session of Parliament.
Currently, when a lease is extended, the existing lease is surrendered and a new lease is granted. Yet, in order to be a “qualifying leaseholder” and receive the Building Safety Act 2022’s statutory protections, a leaseholder is required to establish that a lease was in existence as of 14th February 2022 in order to receive its protections.
If a lease is surrendered and a new lease is granted, the lease technically would not have existed before the 14th February 2022, thus disqualifying the leaseholder from the Act’s protection.
In a Lords debate on the 2nd May, Lord Kennedy of Southwark subsequently asked when this issue will be put right.
“We are looking to legislate to resolve this issue as soon as parliamentary time allows,” responded Baroness Scott of Bybrook, Parliamentary Under Secretary of State for the Department of Levelling Up, Housing and Communities. “In the meantime, before seeking a new extended or varied lease, leaseholders should seek legal advice and seek to come to agreements with landlords to apply the same protections as contractual terms.”
Despite Baroness Scott’s assurances, two queries remain. First, asked by Lord Young of Cookham whether the protections would be retrospective to as to protect those leaseholders who have already extended their lease after February 2022, Baroness Scott could not provide any guarantee.
The second issue is that of the timeline of proposed reforms. “[The proposed Bill] is going to be very complex, with issues around enfranchisement, the right to manage, and encouraging and reinvigorating commonhold,” said Lord Greenhalgh. “Can we publish the Bill so that we can begin the pre-legislative scrutiny as soon as possible?”
Responding, Baroness Scott said while the Bill will not arrive in Parliament for pre-legislative scrutiny, it will arrive in the next Session of Parliament, which begins in Autumn of this year.
