Section 2: Excepted leases
Section 2 sets out the types of leases that are exempt from the Act. The exceptions are:
Business leases where:
the lease expressly permits business purposes without further consent needed of the landlord;
the nature of the permitted business purposes is such that the use of the premises as a dwelling significantly contributes to the business purposes; and
the landlord and tenant exchange written notices at or before the lease is granted confirming the intention to use and continue to use the premises for the business purposes set out in the lease.
The Secretary of State may make further provision about the form and content of the notices required to be exchanged in regulations, and has done so in the Leasehold Reform (Ground Rent) (Business Lease Notices) Regulations 2022 (SI 2022/578).
Business includes a trade, profession or employment but not a home business under the Landlord and Tenant Act 1954.
Statutory lease extensions of houses, under Part 1 of the Leasehold Reform Act 1967, or of flats, under Chapter 2 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993.
Community housing where it is a community housing lease and where it meets any further conditions specified in regulations made by the relevant authority. A community housing lease is where the landlord is a community land trust (as defined in section 79 of the Housing and Regeneration Act 2008), or it is a dwelling in a building controlled or managed by a co-operative society (as set out in paragraph 2B of Schedule 14 to the Housing Act 2004).
Home finance plan leases which also meet any conditions specified in regulations made by the Secretary of State. A home finance plan lease is:
A lease granted in connection with a home reversion plan under Chapter 15A of Part 2 of the Financial Services and Markets Act (Regulated Activities) Order 2001, or
A lease granted by a finance provider to a home buyer in connection with a "‘rent to buy’" arrangement. A ’"rent to buy’" arrangement is where a person buys a freehold or leasehold interest in land (or an undivided share of such an interest) from a finance provider over a defined period by means of payment of a rent.