Summary Part 2 - Leasehold Reform.Summary
19.Part 2 of the Act makes reforms to residential leasehold law.  These reforms will give leaseholders new rights and enhance their existing ones.  They will help those leaseholders who will not be able, or who may not wish, to convert to commonhold.
20.A new right is established to enable leaseholders of flats to take over the management of their building without the need to prove shortcomings on the part of the landlord and without the need to pay compensation.  The Act will make it easier for leaseholders of flats to buy collectively the freehold of their building by simplifying the eligibility criteria for exercising the right and reducing the prospect of costly disputes over the price payable.  This will give all qualifying leaseholders the right to participate in such a purchase.  Comparable changes are made to the right for individual leaseholders of flats to buy a new, longer lease and the right for leaseholders of houses to buy their freehold or extend their lease under the 1967 Act. Leaseholders of houses who have extended their leases under the 1967 Act will be given the right to buy their freehold and, if they do not, security of tenure when the extended lease expires.
21.This Part of the Act also provides greater protection for leaseholders against unreasonable service charges and other payments.  It will enable leaseholders to resolve a wider range of disputes before a LVT.  It will strengthen the existing requirements for landlords to consult leaseholders about major works and extend them to cover any contract for works or services lasting more than 12 months.  It will provide new rights for leaseholders of houses who are required to insure their property through an insurer nominated or approved by the landlord.  It will simplify and strengthen the existing requirements for accounting and safeguarding service charge monies. It will provide that charges levied by landlords under estate management schemes are to be subject to a test of reasonableness to be determined by the LVT. It will extend the scope of the right to apply to a LVT for the appointment of a new manager and make it easier to vary defective leases. It will restrict the charging of penalties for late payment of ground rent and prevent the commencement of forfeiture proceedings until the facts have been determined. It will also prevent the commencement of forfeiture proceedings for amounts which are less than a prescribed sum unless the amount or any part of it has been outstanding for a prescribed period.