Summary Background
22.There are currently around one million leaseholders of flats in England and Wales and a similar number of leaseholders of houses.  It has long been recognised that the leasehold system of tenure has many drawbacks for long term residential occupiers.  An investment in a home steadily loses value as the lease approaches the end of its term.  Many leaseholders experience serious difficulties with their landlords, ranging from neglect of their obligations under the lease to outright exploitation.  The system is virtually unique to England and Wales.
23.There have been a number of leasehold reform measures over the past 30 years or so which have attempted to remedy the worst defects of this form of tenure and give leaseholders redress against landlords’ abuse of their position.  However, the protection afforded by the law remains incomplete and the remedies available to leaseholders are unduly difficult and costly to use.  The commonhold system introduced by Part 1 of the Act will provide a new form of tenure for properties containing several units, which is free from the drawbacks of the leasehold system.  However, as explained in the notes to Part 1, many existing leaseholders are unlikely to be able to convert to commonhold and there is therefore a need to address the problems they face with the existing system.
24.In November 1998, the Government issued a consultation paper, ‘Residential Leasehold Reform in England and Wales – A Consultation Paper’, which invited views on the broad principles of a wide range of reforms.  This paper attracted considerable public interest with over 900 organisations and individuals responding.  A summary of the responses was published in December 1999(1).
25.In the light of responses received, the Government published detailed proposals for leasehold reform, along with those for Commonhold, in the form of a draft Bill and consultation paper on 21 August 2000(2). This also attracted considerable public interest with just under 1,100 organisations and individuals responding on leasehold issues.