Schedule 8 – Leasehold enfranchisement and extension: Miscellaneous amendments Part 1: LRA 1967 and LHURDA 1993: General
Paragraph 1 repeals Section 18 of the LRHUDA 1993 (which requires the disclose of certain agreements on a collective enfranchisement, which are relevant to payment of marriage or hope value) and makes two consequential amendments.
	Paragraph 2 removes the restrictions in the LRA 1967 and the LRHUDA 1993 on the extent to which a tenant whose lease has been extended can enjoy various kinds of statutory security of tenure.
	Given the removal of the restrictions on the enfranchisement rights of sublessees and rights to security of tenure in paragraph 2 of Schedule 8, paragraph 3 of Schedule 8 removes the obligation to state in an extended lease that is has been extended under the LRA 1967 or the LRHUDA 1993 (as applicable).
	Paragraph 4, sub-paragraph (1), adjusts the periods in which a landlord can apply to terminate a lease of a house that has been extended under the LRA 1967 for the purposes of redevelopment (and on payment of compensation to the tenant). The new periods take account of the change from 50-year to 990-year lease extensions – see Section 33. The landlord can apply to retake possession:
	in the last 12 months of the term of the tenant’s original lease (before it was replaced by the new extended lease);
in the last five years of each 90-year period of the 990-year extension; and
in the last five years of each 90-year period of any further 990-year extension.
	Sub-paragraph (2) makes the same adjustment to the periods for exercising break rights under the LRHUDA 1993 in relation to an extended lease of a flat.
	Paragraph 5 repeals provisions of the 1967 Act that have become redundant due to other repeals.
	Paragraph 6 repeals provisions of the LRA 1967 that concern the interaction between enfranchisement claims under the Act and the approval of estate management schemes under Section 19. As estate management schemes can no longer be approved, these provisions are obsolete.
	Paragraph 7 inserts new Section 36A into the LRA 1967, and amends paragraph 5(2) of Schedule 4A to the LRA 1967, to make unified provision for the whole of the LRA 1967 clarifying the scope of the powers under the Act to make order or regulations.
	Paragraph 8 repeals parts of paragraph 11 of Schedule 1 to the LRA 1967 (which lets intermediate leaseholders surrender their leases in certain circumstances during a lease extension claim) and replaces it by inserting a new paragraph 12A into Schedule 1 to the LRA 1967. Paragraph 12A enables the reduction of rent under intermediate leases as part of a lease extension claim over a house. Where a leaseholder obtains a lease extension under the LRA 1967, any rent payable for the house and premises under their lease will be reduced to a peppercorn (see Section 34(3)). Paragraph 12A provides that a tenant or landlord under a "qualifying intermediate lease" has a right to require that the rent for the house and premises under that intermediate lease, and any inferior qualifying intermediate leases, be reduced as a result of the lease extension.
	Paragraph 12A(1) to (7) sets out when this right applies, and provides a definition of "qualifying intermediate lease". Sub-paragraph (2) provides that, if the qualifying lease being extended is a shared ownership lease, the rent under superior leases can only be reduced if some of the rent under the qualifying lease was payable in respect of the leaseholder’s share of the house and premises, because only rent payable on that share becomes a peppercorn rent on a lease extension.
	Paragraph 12A(8) and (9) set out the amount by which the rent under the qualifying intermediate lease or leases is reduced, and paragraph 12A(10) provides a limit on any such reduction: an intermediate leaseholder’s rental obligation to their landlord cannot be reduced under this paragraph by more than the reduction in the rent they receive from their tenant.
	Paragraph 12A(11) defines a number of the terms used in the paragraph.
	The following example illustrates the effect that paragraph 12A has on the rents under a chain of leases and the operation of the limit in paragraph 12A(10).
The qualifying tenant ("QT") of a house pays their landlord ("IL3") £100 each year in ground rent. There are a series of further intermediate leaseholders ("IL2", and "IL1") above IL3 but below the freeholder ("FH") in the chain. The rent each of them owes to their landlord is as follows.
QT pays IL3: £100 per year
IL3 pays IL2: £50 per year
IL2 pays IL1: £100 per year
IL1 pays FH: £75 per year
QT makes a lease extension claim under the LRA 1967. FH gives notice to the other intermediate landlords that they must reduce the rent under their leases in accordance with paragraph 12A. Following the grant of the extended lease to QT and the variation of the ILs’ leases, the rental obligations will be as follows.
QT pays IL3: peppercorn ground rent
IL3 pays IL2: peppercorn ground rent
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IL2 pays IL1: £50 per year
IL1 pays FH: £25 per year
Despite the reduction of QT’s and IL3’s rent to a peppercorn, two intermediate leaseholders (IL2 and IL1) still have ground rents after the reduction. As IL2’s rental income from IL3 is reduced by £50 per year, their rental liability to IL1 cannot be reduced by more than £50. And as IL1’s rental income is consequently reduced by £50, their rental liability to FH cannot be reduced by more than £50.
	Paragraph 9 inserts a new paragraph 12 into Schedule 11 to the LRHUDA 1993, which makes equivalent provision to new paragraph 12A inserted by paragraph 8, enabling the reduction of rent under intermediate leases as part of a lease extension claim over a flat.