Leasehold and Freehold Reform Act 2024 — HL Bill 76 (as amended in Committee)

Leasehold and Freehold Reform Bill
[AS AMENDED IN COMMITTEE]
CONTENTS
PART 1
LEASEHOLD HOUSES
Ban on grant or assignment of certain long residential leases of houses
1 Ban on grant or assignment of certain long residential leases of houses
Key definitions
2 Long residential leases of houses
3 Leases which have a long term
4 Series of leases whose term would extend beyond 21 years
5 Houses
6 Residential leases
7 Permitted leases
Regulation of permitted leases
8 Permitted leases: certification by the appropriate tribunal
9 Permitted leases: marketing restrictions
10 Permitted leases: transaction warning conditions
Land registration
11 Prescribed statements in new long leases
12 Restriction on title
Redress
13 Redress: right to acquire a freehold or superior leasehold estate
14 Redress: application of the right to acquire
15 Redress: general provision
16 Redress regulations: exercising and giving effect to the right to acquire
Enforcement
17 Enforcement by trading standards authorities
18 Financial penalties
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19 Financial penalties: cross-border enforcement
20 Lead enforcement authority
21 General duties of lead enforcement authority
22 Enforcement by lead enforcement authority
23 Further powers and duties of enforcement authorities
General
24 Power to amend: permitted leases and definitions
25 Interpretation of Part 1
PART 2
LEASEHOLD ENFRANCHISEMENT AND EXTENSION
Eligibility for enfranchisement and extension
26 Removal of qualifying period before enfranchisement and extension claims
27 Removal of restrictions on repeated enfranchisement and extension claims
28 Change of non-residential limit on collective enfranchisement claims
29 Eligibility for enfranchisement and extension: specific cases
Effects of enfranchisement
30 Acquisition of intermediate interests in collective enfranchisement
31 Right to require leaseback by freeholder after collective enfranchisement
Effects of extension
32 Longer lease extensions
33 Lease extensions under the LRA 1967 on payment of premium at peppercorn
rent
Price payable on enfranchisement or extension
34 LRA 1967: determining price payable for freehold or lease extension
35 LRHUDA 1993: determining price payable for collective enfranchisement or
new lease
36 Enfranchisement or extension: new method for calculating price payable
Costs of enfranchisement or extension
37 Costs of enfranchisement and extension under the LRA 1967
38 Costs of enfranchisement and extension under the LRHUDA 1993
Jurisdiction of the county court and tribunals
39 Replacement of sections 20 and 21 of the LRA 1967
40 References to “the court” in Part 1 of the LRA 1967
41 Amendment of Part 1 of the LRHUDA 1993
42 References to “the court” in Part 1 of the LRHUDA 1993
Leasehold and Freehold Reform Bill ii

Jurisdiction of the High Court
43 No first-instance applications to the High Court in tribunal matters
Enfranchisement and extension: miscellaneous amendments
44 Miscellaneous amendments
Preservation of existing law for certain purposes
45 LRA 1967: preservation of existing law for certain enfranchisements
46 Part 2: consequential amendments to other legislation
PART 3
OTHER RIGHTS OF LONG LEASEHOLDERS
New right to replace rent with peppercorn rent
47 Right to vary long lease to replace rent with peppercorn rent
The right to manage
48 Change of non-residential limit on right to manage claims
49 Costs of right to manage claims
50 Compliance with obligations arising under Chapter 1 of Part 2 of the CLRA
2002
51 No first-instance applications to the High Court in tribunal matters
PART 4
REGULATION OF LEASEHOLD
Service charges
52 Extension of regulation to fixed service charges
53 Notice of future service charge demands
54 Service charge demands
55 Accounts and annual reports
56 Right to obtain information on request
57 Enforcement of duties relating to service charges
Insurance
58 Limitation on ability of landlord to charge insurance costs
59 Duty to provide information about insurance to tenants
Administration charges
60 Duty of landlords to publish administration charge schedules
iii Leasehold and Freehold Reform Bill

Litigation costs
61 Limits on rights of landlords to claim litigation costs from tenants
62 Right of tenants to claim litigation costs from landlords
Non-litigation costs: enfranchisement, extension and right to manage
63 Restriction on recovery of non-litigation costs of enfranchisement, extension
and right to manage
Appointment of manager by Tribunal
64 Appointment of manager: power to vary or discharge orders
65 Appointment of manager: breach of redress scheme requirements
Sales information requests
66 Leasehold sales information requests
General
67 Regulations under the LTA 1985: procedure and appropriate authority
68 LTA 1985: Crown application
69 Part 4: consequential amendments
70 Application of Part 4 to existing leases
PART 5
REGULATION OF ESTATE MANAGEMENT
Key definitions
71 Meaning of “estate management” etc
Limitation of estate management charges
72 Estate management charges: general limitations
73 Limitation of estate management charges: reasonableness
74 Limitation of estate management charges: consultation requirements
75 Limitation of estate management charges: time limits
76 Determination of tribunal as to estate management charges
Rights relating to estate management charges
77 Demands for payment
78 Annual reports
79 Right to request information
80 Requests under section 79: further provision
81 Enforcement of sections 77 to 80
Administration charges
82 Meaning of “administration charge”
Leasehold and Freehold Reform Bill iv

83 Duty of estate managers to publish administration charge schedules
84 Enforcement of section 83
85 Limitation of administration charges
86 Determination of tribunal as to administration charges
Codes of management practice
87 Codes of management practice: extension to estate managers
Appointment of substitute manager by Tribunal
88 Notices of complaint
89 Appointment of substitute manager
90 Conditions for applying for appointment order
91 Criteria for determining whether to make appointment order
92 Appointment orders: further provision
Sales information requests
93 Estate management: sales information requests
94 Effect of sales information request
95 Charges for provision of information
96 Enforcement of sections 94 and 95
General
97 Part 5: Crown application
98 Interpretation of Part 5
PART 6
LEASEHOLD AND ESTATE MANAGEMENT: REDRESS SCHEMES
Redress schemes: general
99 Leasehold and estate management: redress schemes
100 Redress schemes: voluntary jurisdiction
101 Financial assistance for establishment or maintenance of redress schemes
102 Approval and designation of redress schemes
103 Redress schemes: no Crown status
Enforcement
104 Financial penalties
105 Financial penalties: maximum amounts
106 Decision under a redress scheme may be made enforceable as if it were a
court order
107 Lead enforcement authority: further provision
Guidance
108 Guidance for enforcement authorities and scheme administrators
v Leasehold and Freehold Reform Bill

Amendments to other Acts
109 Part 6: amendments to other Acts
Interpretation
110 Interpretation of Part 6
PART 7
RENTCHARGES
111 Meaning of “estate rentcharge”
112 Regulation of remedies for arrears of rentcharges
PART 8
AMENDMENTS OF PART 5 OF THE BUILDING SAFETY ACT 2022
Remediation of building defects
113 Steps relating to remediation of defects
114 Remediation orders
115 Remediation contribution orders
116 Recovery of legal costs etc through service charge
117 Repeal of section 125 of the BSA 2022
Insolvency of responsible persons
118 Higher-risk and relevant buildings: notifications in connection with insolvency
PART 9
GENERAL
119 Interpretation of references to other Acts
120 Power to make consequential provision
121 Regulations
122 Extent
123 Commencement
124 Short title
Categories of permitted lease Schedule 1 —
Categories of permitted lease for Tribunal certification Part 1 —
Categories of permitted lease for self-certification Part 2 —
Leasehold houses: financial penalties Schedule 2 —
Eligibility for enfranchisement and extension: specific cases Schedule 3 —
Determining and sharing the market value Schedule 4 —
Leasehold and Freehold Reform Bill vi

Introduction Part 1 —
The market value Part 2 —
Determining the market value Part 3 —
Assumptions and other matters affecting determination of
market value
Part 4 —
The standard valuation method Part 5 —
Entitlement of eligible persons to shares of the market value Part 6 —
Determining the term value Part 7 —
Other compensation Schedule 5 —
Schedule 4 and 5: interpretation Schedule 6 —
Amendments consequential on section 36 and Schedule 4 to 6 Schedule 7 —
Leasehold enfranchisement and extension: miscellaneous
amendments
Schedule 8 —
LRA 1967 and LRHUDA 1993: general Part 1 —
Shared ownership leases and the LRA 1967 etc Part 2 —
Shared ownership leases and the LRHUDA 1993 Part 3 —
Other legislation Part 4 —
Part 2: consequential amendments to other legislation Schedule 9 —
Right to vary lease to replace rent with peppercorn rent Schedule 10 —
Part 4: consequential amendments Schedule 11 —
Amendments consequential on section 67 Part 1 —
Other consequential amendments Part 2 —
Redress schemes: financial penalties Schedule 12 —
Part 6: amendments to other Acts Schedule 13 —
vii Leasehold and Freehold Reform Bill

[AS AMENDED IN COMMITTEE]
A
BILL
TO
Prohibit the grant or assignment of certain new long residential leases of
houses, to amend the rights of tenants under long residential leases to acquire
the freeholds of their houses, to extend the leases of their houses or flats, and
to collectively enfranchise or manage the buildings containing their flats, to
give such tenants the right to reduce the rent payable under their leases to a
peppercorn, to regulate the relationship between residential landlords and
tenants, to regulate residential estate management, to regulate rentcharges
and to amend the Building Safety Act 2022 in connection with the remediation
of building defects and the insolvency of persons who have repairing
obligations relating to certain kinds of buildings.
B
E IT ENACTED by the King’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
PART 1
LEASEHOLD HOUSES
Ban on grant or assignment of certain long residential leases of houses
1 Ban on grant or assignment of certain long residential leases of houses
5(1) A person may not grant or enter into an agreement to grant a long residential
lease of a house on or after the day on which this section comes into force,
unless it is a permitted lease (see section 7).
(2) A person may not assign or enter into an agreement to assign the whole or
10
a part of a lease which was granted on or after the day on which this section
comes into force if—
(a) at the time of the assignment the lease is a long residential lease of a
house, but
(b) at the time of the grant the lease was not a long residential lease of a
house.
15(3) This section does not affect—
58/4 HL Bill 76
1 Leasehold and Freehold Reform Bill
Part 1—Leasehold houses

(a) the validity of a lease granted, or an assignment entered into, in breach
of this section, and does not affect the powers of a person to grant or
assign such a lease (whether under section 23(1) of the Land
Registration Act 2002 or otherwise);
5(b) any contractual rights of a party to an agreement entered into in breach
of this section.
Key definitions
2 Long residential leases of houses
(1)
10
A lease is a “long residential lease of a house” if conditions A to C are met
in relation to the lease.
(2) Condition A: the lease has a long term (see sections 3 and 4).
(3) Condition B: the lease demises one house (see section 5), with or without
appurtenant property, and nothing else.
(4) Condition C: the lease is a residential lease (see section 6).
153 Leases which have a long term
(1) A lease has a “long term” in any of cases A to D.
(2) Case A: the lease is granted for a term certain exceeding 21 years.
(3) Case B: section 149(6) of the Law of Property Act 1925 applies to the lease
20
(lease granted for life or until marriage or civil partnership) and the lease
accordingly takes effect with a term fixed by law.
(4) Case C: the lease is granted with a covenant or obligation for perpetual
renewal and accordingly takes effect with a term fixed by law - unless it is
a sub-lease with a term fixed by law of 21 years or shorter.
(5)
25
Case D: the lease is capable of forming part of a series of leases whose terms
would extend beyond 21 years (see section 4).
(6) In determining whether a lease has a long term, it is irrelevant if the lease is,
or may become, terminable by notice, re-entry or forfeiture.
4 Series of leases whose term would extend beyond 21 years
(1)
30
A lease (“the original lease”) is “capable of forming part of a series of leases
whose terms would extend beyond 21 years” if conditions A to C are met at
the time when the original lease is granted.
(2) Condition A: the original lease does not have a long term under section 3(2),
(3) or (4).
(3)
35
Condition B: provision for the grant of another lease of the same house (the
“new lease”) is included in—
(a) the original lease, or
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Part 1—Leasehold houses

(b) any related arrangements.
(4) Condition C: the total duration of—
(a) the term of the original lease,
(b) the term of the new lease (if granted), and
5(c) the term or terms of any subsequent leases (if granted),
would exceed 21 years.
(5) In a case where the provision for the grant of the new lease, or for the grant
of any subsequent lease, allows for the possibility of the term of the lease
10
being one of a number of differing durations, the reference in condition C to
the term of the lease is to the longest of those possible durations.
(6) A lease is a “lease of the same house” if the lease demises one house, being
the house comprised in the original lease, with or without any appurtenant
property, and nothing else.
(7)
15
Arrangements are “related arrangements” if they are entered into in connection
with the grant of the original lease (whether or not they are entered into in
writing).
(8) A lease is a “subsequent lease” if—
(a) it is not the new lease,
(b) it is a lease of the same house, and
20(c) provision for the grant of the lease—
(i) is included in the original lease or any related arrangements,
(ii) would be included in the new lease (if granted), or
(iii) would be included in any other lease that (if granted) would
itself be a subsequent lease.
255 Houses
(1) A “house” is a separate set of premises (on one or more floors) which—
(a) forms the whole, or part, of a building, and
(b) is constructed or adapted for use for the purposes of a dwelling.
(2)
30
But where the separate set of premises forms part of a building, it is not a
house if the whole of or a material part of the set of premises lies above or
below some other part of the building.
6 Residential leases
A lease is a “residential lease” if it is a lease of a house and the terms of the
35
lease do not prevent the house from being occupied under that lease as a
separate dwelling.
7 Permitted leases
A lease is a “permitted lease” if—
(a) it is a long residential lease of a house, and
3 Leasehold and Freehold Reform Bill
Part 1—Leasehold houses

(b) it falls into one or more of the categories set out in Schedule 1.
Regulation of permitted leases
8 Permitted leases: certification by the appropriate tribunal
(1)
5
The appropriate tribunal must, on an application by a person, issue a certificate
(a “permitted lease certificate”) in relation to a new long residential lease of
a house, where the tribunal is satisfied that the lease is or will be a permitted
lease falling within Part 1 of Schedule 1.
(2) An application under this section may be made and determined whether or
not the application includes a draft of the instrument creating the new lease.
10(3) The appropriate tribunal may issue a permitted lease certificate on such terms
and conditions as it considers appropriate, but the certificate must—
(a) identify the house or the land on which the house will be built, and
(b) state the category or categories set out in Part 1 of Schedule 1 into
which the lease will fall.
15(4) If an application under this section relates to two or more leases, the
appropriate tribunal may issue just one certificate relating to some or all of
those leases.
9 Permitted leases: marketing restrictions
(1) This section applies in relation to the marketing of a house where—
20(a) the house is to be comprised in a new lease, and
(b) the lease will be a long residential lease of the house.
(2) A person ("a promoter") may not make any material marketing the house to
be comprised in the lease available to any person, unless the permitted lease
information relating to the lease is included in or provided with that material.
25(3) The “permitted lease information”, in relation to a lease, means—
(a) if the lease falls or will fall into one or more of the categories set out
in Part 1 of Schedule 1, a copy of the permitted lease certificate together
with a statement identifying that category or those categories,
(b)
30
if to the best of the knowledge and belief of the promoter at the time
the material is made available the lease falls or will fall into one or
more of the categories set out in Part 2 of Schedule 1, a statement
identifying that category or those categories, or
(c) if both paragraphs (a) and (b) apply to the lease, the information
required under both those paragraphs.
35(4) “Marketing” includes any form of advertising or promotion.
10 Permitted leases: transaction warning conditions
(1) A person may not, on or after the day on which section 1 comes into force—
Leasehold and Freehold Reform Bill 4
Part 1—Leasehold houses

(a) enter into an agreement to grant a permitted lease unless the
transaction warning conditions are met in relation to the agreement,
or
(b)
5
subject to subsection (5), grant a permitted lease unless the transaction
warning conditions are met in relation to the lease.
(2) The “transaction warning conditions” are as follows—
(a) at least 7 days before the relevant date the grantor must give a warning
notice relating to the permitted lease—
(i) to the proposed tenant, or
10(ii) where there is more than one proposed tenant, to each of them;
(b) a notice of receipt of the warning notice must be given to the grantor—
(i) by the proposed tenant, or
(ii) where there is more than one proposed tenant, jointly by all
of the proposed tenants;
15(c) a reference to the warning notice and the notice of receipt must be
included in or endorsed on the relevant instrument in the specified
manner.
(3) A “warning notice” is a notice provided in a specified form and manner and
containing—
20(a) sufficient information to identify the house to be comprised in the
lease,
(b) if the lease falls within Part 1 of Schedule 1, a copy of the permitted
lease certificate,
(c)
25
if the lease falls into one or more of the categories set out in Part 2 of
Schedule 1, a statement identifying that category or those categories,
(d) if both paragraphs (b) and (c) apply to the lease, the information
required under both those paragraphs, and
(e) such other information as may be specified.
(4)
30
A “notice of receipt” is a notice provided in a specified form and manner and
containing such information as may be specified.
(5) A person does not breach subsection (1) in relation to the grant of a lease if—
(a) the person previously entered into an agreement to grant that lease,
(b) the transaction warning conditions were met in relation to that
agreement, and
35(c) a reference to the warning notice and the notice of receipt relating to
that agreement is included in or endorsed on the instrument creating
the lease.
(6) This section does not apply to the grant of a permitted lease which falls within
paragraph 5 of Schedule 1 (leases agreed before commencement).
40(7) This section does not affect—
(a) the validity of a lease granted in breach of subsection (1), and does
not affect the powers of a person to grant such a lease (whether under
section 23(1) of the Land Registration Act 2002 or otherwise);
5 Leasehold and Freehold Reform Bill
Part 1—Leasehold houses

(b) any contractual rights of a party to an agreement entered into in breach
of subsection (1).
(8) In this section—
5
“grantor”, in relation to a lease, means the person proposing to grant
the lease (whether or not that person holds the freehold or leasehold
title out of which the lease will be granted);
“proposed tenant”, in relation to a lease, means the proposed tenant of
the house to be comprised in the lease;
“relevant date” means—
10(a) in the case of an agreement to grant a lease, the day on which
the agreement is entered into, and
(b) in the case of a grant of a lease, the day on which the lease is
granted;
“relevant instrument” means—
15(a) in the case of an agreement to grant a lease, that agreement,
and
(b) in the case of a grant of a lease, the instrument creating that
lease;
“specified” means specified or described in regulations made—
20(a) in relation to a lease of a house in England, by the Secretary
of State;
(b) in relation to a lease of a house in Wales, by the Welsh
Ministers.
(9)
25
A statutory instrument containing regulations under this section is subject to
the negative procedure.
Land registration
11 Prescribed statements in new long leases
(1) This section applies to a lease of land which—
(a) has a long term, and
30(b) is granted on or after the day on which section 1 comes into force.
(2) If the lease is not a long residential lease of a house, the lease must include
a statement to that effect.
(3) If the lease is a permitted lease, the lease must include a statement to that
effect.
35(4) A statement under subsection (2) or (3) must comply with such requirements
as may be prescribed by land registration rules under the Land Registration
Act 2002.
(5) This section does not apply to—
(a) a lease with a long term only by virtue of falling within section 3(5);
Leasehold and Freehold Reform Bill 6
Part 1—Leasehold houses

(b) a lease which takes effect as a deemed surrender and regrant of a
lease.
12 Restriction on title
(1) Subsection (3) applies where—
5(a) the Chief Land Registrar approves an application for registration of a
lease (the “registered lease”),
(b) section 11 applies to the registered lease, but
(c) the registered lease does not contain a statement made in accordance
with subsection (2) or (3) of that section.
10(2) An “application for registration of a lease” is an application for—
(a) registration of a disposition of registered land, if that disposition is
the grant of a lease, or
(b) registration of a lease within section 4(1)(c) of the Land Registration
Act 2002.
15(3) The Chief Land Registrar must enter in the register a restriction that no
registrable disposition, other than the grant of a legal charge, of the registered
lease is to be registered.
(4) The restriction under subsection (3) may be removed if the registered lease
is varied to include a statement made in accordance with section 11(2) or (3).
20(5) Subsection (6) applies where—
(a) a restriction has been entered in the register in accordance with
subsection (3) in relation to a registered lease, and
(b) the Chief Land Registrar approves an application for registration of a
25
deed of variation relating to the lease by virtue of which a new lease
takes effect as a deemed surrender and regrant of the lease.
(6) The Chief Land Registrar must enter in the register a restriction that no
registrable disposition, other than the grant of a legal charge, of the new lease
is to be registered.
(7)
30
The restriction under subsection (6) may be removed if the Chief Land
Registrar is satisfied that the new lease—
(a) is not a long residential lease of a house, or
(b) is a permitted lease.
(8) An expression used in this section and in the Land Registration Act 2002 has
the same meaning in this section as in that Act.
35Redress
13 Redress: right to acquire a freehold or superior leasehold estate
(1) This section applies where a long residential lease of a house is granted or
assigned in breach of section 1.
7 Leasehold and Freehold Reform Bill
Part 1—Leasehold houses

(2) The rights holder in relation to the lease has the right to acquire (for no
consideration)—
(a) the freehold estate in the land comprised in the lease, and
(b) any superior leasehold estate or estates in that land.
5(3) References in the rest of this section, and in sections 14 to 16, to the right to
acquire are to be construed in accordance with subsection (2).
(4) The right to acquire the freehold or leasehold estate is exercisable against the
person holding that estate for the time being (the “landlord”).
(5) The “rights holder”, in relation to a lease, means—
10(a) in a case where a mortgagee or chargee has for the time being the
right to deal with the house comprised in the lease, that person, or
(b) in any other case the tenant for the time being under the lease.
(6) In this section, “superior leasehold estate”, in relation to a long residential
15
lease of a house, means a leasehold estate that is superior to the long
residential lease.
14 Redress: application of the right to acquire
(1) Section 13 ceases to apply in relation to a long residential lease of a house
if—
(a) the term of the lease expires (but see subsection (2)), or
20(b) the lease otherwise ceases to exist.
(2) Where the term of the lease expires, section 13 continues to apply for as long
as the lease is continued under a relevant enactment.
(3) Section 13 ceases to apply in relation to a long residential lease of a house if
25
the tenant for the time being under the lease acquires the freehold estate and
any superior leasehold estate or estates in the land comprised in the lease
(whether or not by exercising the right to acquire).
(4) In subsection (2) “relevant enactment” means—
(a) Part 1 of the Landlord and Tenant Act 1954, or
(b) Schedule 10 to the Local Government and Housing Act 1989.
3015 Redress: general provision
(1) A lease to which section 13 applies is not as a result of any right to acquire—
(a) registrable under the Land Charges Act 1972, or
(b) to be taken to be an estate contract within the meaning of that Act.
(2)
35
An agreement relating to a long residential lease of a house (whether or not
contained in the instrument creating the lease or made before the grant of
the lease) is of no effect to the extent that it makes provision—
(a) excluding or modifying the right to acquire, or
Leasehold and Freehold Reform Bill 8
Part 1—Leasehold houses

(b) providing for the surrender or termination of the lease, or for the
imposition of any penalty, in the event of the rights holder taking
steps to exercise the right to acquire.
(3)
5
Subsection (2) does not prevent a tenant under a long residential lease of a
house from—
(a) surrendering the lease,
(b) terminating the lease, or
(c) entering into an agreement to acquire the freehold estate in the land
10
comprised in the lease, or any superior leasehold estate or estates in
that land, other than by way of exercising the right to acquire.
(4) The right to acquire in relation to a long residential lease of a house is not
capable of subsisting apart from the lease.
(5) In this section, “rights holder” has the meaning given by section 13.
16 Redress regulations: exercising and giving effect to the right to acquire
15(1) The Secretary of State may by regulations (“redress regulations”) make
provision for and in connection with the exercise of the rights holder’s right
to acquire in relation to a long residential lease of a house.
(2) Redress regulations may, in particular, include provision for or in connection
with—
20(a) the period within which the right to acquire must be exercised;
(b) the giving of notice by the rights holder to the landlord or any other
specified person for the purpose of exercising the right to acquire
(including the form and manner in which, and the period within
which, any such notice must be given);
25(c) registration under the Land Charges Act 1972 or the Land Registration
Act 2002 of any notice given by virtue of paragraph (b);
(d) the giving of notice by the landlord to the rights holder or any other
specified person for the purpose of accepting or rejecting the rights
30
holder’s right to acquire (including the form and manner in which,
and the period within which, any such notice must be given);
(e) the making by the appropriate tribunal or a court of an order on an
application by a specified person determining whether or not, in the
absence of agreement between the rights holder and the landlord, the
35
rights holder has the right to acquire (including provision for the order
to be made subject to such terms and conditions as the tribunal or
court considers appropriate, including terms about costs);
(f) further steps that must be taken by the rights holder (including the
provision of specified information or specified documents), and any
40
conditions that must be met in relation to the taking of those further
steps (including conditions about timing), in order to exercise the right
to acquire;
(g) requirements that must be met in relation to a conveyance executed
1
to give effect to the right to acquire (a “relevant conveyance”),
9 Leasehold and Freehold Reform Bill
Part 1—Leasehold houses

including requirements for the conveyance to include specified
provisions in respect of specified easements or rights over property,
rights of way or covenants (positive or restrictive);
(h)
5
any other requirements that must be met in relation to a relevant
conveyance, including a requirement that the conveyance is granted
free of specified incumbrances, and subject to such burdens as may
be specified;
(i) the effect of the execution of a relevant conveyance, including provision
10
for the conveyance to have the effect of discharging the house
comprised in the lease from any specified incumbrance (including a
charge);
(j) any statement which must be included in a relevant conveyance,
including a statement identifying the conveyance as executed for the
15
purposes of this Part, and any requirements that must be met in
relation to such a statement (including any requirements prescribed
by land registration rules under the Land Registration Act 2002);
(k) the making by the appropriate tribunal or a court of an order (a
“relevant order”) on an application by a specified person for the
20
purpose of giving effect to the right to acquire (whether or not in
connection with an application to the appropriate tribunal or a court
for a determination as described in paragraph (e));
(l) the modification of the right to acquire in relation to any appurtenant
property comprised in the lease (including for the rights holder to
25
continue to hold a lease of such property, or conferring on them a
right to use the property);
(m) the circumstances in which the rights holder exercising the right to
acquire is to be treated as a purchaser for value of the legal estate of
the land comprised in the lease;
(n)
30
the circumstances in which a mortgagee or chargee is to be treated
for the purposes of section 13(5)(a) as having the right to deal with
the house comprised in the lease;
(o) in a case where the rights holder is a tenant for the time being under
the lease—
(i)
35
the circumstances in which a representative of the rights holder
has the right to acquire instead of that tenant, and
(ii) the exercise by such a representative of any powers or duties
of a rights holder conferred or imposed by this Part or under
redress regulations;
(p)
40
the liability for specified costs in connection with the exercise of the
right to acquire (including provision as to how to calculate such costs
or for the amount of any costs payable to be determined, in the absence
of agreement, by the appropriate tribunal or a court);
(q) proceedings for the recovery by specified persons from the landlord
45
who granted the lease of compensation for any loss or damage
resulting from the breach of section 1, including provision as to how
1
to calculate the value of such loss or damage, and conferring powers
Leasehold and Freehold Reform Bill 10
Part 1—Leasehold houses

on the appropriate tribunal or a court in connection with the recovery
of such compensation (including provision as to costs).
(3) Provision under subsection (2)(k) may, in particular, include provision—
(a)
5
for the making of a relevant order where the landlord cannot be found
or identified, including where the rights holder has been unable to
give notice for the purpose of exercising the right to acquire;
(b) for a relevant order to determine the content of a relevant conveyance
and who may execute it, and to be made subject to such further terms
10
and conditions as the appropriate tribunal or court considers
appropriate, including terms about costs.
(4) Redress regulations may include provision about cases where the rights
holder’s right to acquire in relation to a lease is exercisable in relation to more
than one landlord, including (but not limited to) provision—
(a)
15
for or in connection with functions to be carried out by one landlord
(the “reversioner”) on behalf of the other landlords;
(b) for the landlord holding the freehold estate to be the reversioner;
(c) for another landlord to be the reversioner in specified circumstances;
(d) for or in connection with the appointment or removal of a reversioner
20
by order of the appropriate tribunal or a court, on an application by
a specified person;
(e) for things done by the reversioner to be binding on the other landlords
and on their interests in the land comprised in the lease;
(f) for or in connection with the provision of information, documents or
25
other assistance by other landlords to the reversioner for the purpose
of enabling the reversioner to carry out functions under redress
regulations;
(g) for the indemnification of the reversioner against any liability incurred
by the reversioner in consequence of failure by other landlords to
comply with any requirement imposed on them by redress regulations;
30(h) excluding the reversioner from liability to any of the other landlords
in specified circumstances;
(i) for or in connection with the making of an order by the appropriate
tribunal or a court, on an application by the reversioner, directing how
35
the right to acquire may be given effect if any of the other landlords
cannot be found or identified, or in case of a dispute between the
reversioner and any other landlord.
(5) Redress regulations may—
(a) apply or incorporate (with or without modifications) any provision
made by or under any relevant enactment;
40(b) amend or repeal any provision made by an Act.
(6) A statutory instrument containing redress regulations is subject to the negative
procedure.
(7) In this section—
“incumbrances” has the same meaning as in section 9 of the LRA 1967;
11 Leasehold and Freehold Reform Bill
Part 1—Leasehold houses

“landlord” has the meaning given by section 13;
“relevant enactment” means—
(a) the LRA 1967;
(b) the LRHUDA 1993;
5(c) the Tribunals, Courts and Enforcement Act 2007;
“representative”, in relation to a rights holder, means the personal
representative, trustee in bankruptcy, trustee in sequestration, receiver,
liquidator or person otherwise acting in a representative capacity in
relation to that person;
10“rights holder” has the meaning given by section 13;
“specified” means specified or described in redress regulations.
Enforcement
17 Enforcement by trading standards authorities
(1)
15
It is the duty of every local weights and measures authority in England or
Wales (an “enforcement authority”) to enforce the leasehold house restrictions
in its area.
(2) In this section and in sections 18 to 23 the “leasehold house restrictions”
means—
(a) section 1(1) so far as it relates to an agreement to grant a lease,
20(b) section 1(1) so far as it relates to the grant of a lease,
(c) section 1(2) so far as it relates to an agreement to assign a lease,
(d) section 1(2) so far as it relates to the assignment of a lease,
(e) section 9(2) (marketing restrictions on permitted leases),
(f)
25
section 10(1)(a) (conditions on agreement to grant permitted lease),
and
(g) section 10(1)(b) (conditions on grant of permitted lease).
(3) For the purposes of this section and sections 18 to 23, a breach of a leasehold
house restriction is taken to occur in the area in which the house in question
30
is located (and if the house is located in more than one area, the breach is
taken to have occurred in each of those areas).
(4) The duty in subsection (1) is subject to sections 19(4) (enforcement by another
enforcement authority) and 22 (enforcement by the lead enforcement
authority).
18 Financial penalties
35(1) An enforcement authority may impose a financial penalty on a person if the
authority is satisfied beyond reasonable doubt that the person has breached
a leasehold house restriction.
(2) The amount of a penalty for a breach is to be such amount as the authority
determines but—
Leasehold and Freehold Reform Bill 12
Part 1—Leasehold houses

(a) is not to be less than £500, and
(b) is not to be more than £30,000.
(3) Conduct within any one of the following paragraphs is to be regarded as a
single breach of one leasehold house restriction—
5(a) entering into an agreement to grant a lease in breach of section 1(1)
and subsequently granting the lease in breach of that provision;
(b) entering into an agreement to assign a lease in breach of section 1(2)
and subsequently assigning the lease in breach of that provision;
(c)
10
entering into an agreement to grant a lease in breach of section 10(1)(a)
and subsequently granting the lease in breach of section 10(1)(b).
Subsection (5) is to be read in accordance with this subsection.
(4) A person who makes marketing material available in relation to the same
lease on more than one occasion in breach of section 9(2) is to be regarded
as committing only one breach of that provision.
15(5) The following are to be regarded as separate breaches—
(a) breaches by the same person of the same leasehold house restriction
in relation to different leases, and
(b) breaches by the same person of different leasehold house restrictions
in relation to the same lease,
20and accordingly an enforcement authority may impose a separate penalty in
relation to each breach (or may impose a single penalty of an amount equal
to the total of the amounts of the penalties that could have been separately
imposed).
(6)
25
The Secretary of State may by regulations amend an amount for the time
being specified in subsection (2) to reflect a change in the value of money.
(7) A statutory instrument containing regulations under subsection (6) is subject
to the negative procedure.
(8) Schedule 2 contains further provision about financial penalties under this
section.
3019 Financial penalties: cross-border enforcement
(1) An enforcement authority may impose a penalty under section 18 in respect
of a breach of a leasehold house restriction which occurs outside that
authority’s area (as well as in respect of a breach which occurs within that
area).
35(2) If an enforcement authority (“LA1”) proposes to impose a penalty in respect
of a breach which occurred in the area of a different enforcement authority
(“LA2”), LA1 must notify LA2 that it proposes to do so.
(3) If LA1 notifies LA2 under subsection (2) but does not impose the penalty,
LA1 must notify LA2 of that fact.
13 Leasehold and Freehold Reform Bill
Part 1—Leasehold houses

(4) If an enforcement authority receives a notification under subsection (2), the
authority is relieved of its duty under section 17(1) in relation to the breach
unless the authority receives a notification under subsection (3).
(5)
5
If an enforcement authority (“LA1”) imposes a penalty in respect of a breach
which occurred in the area of a different enforcement authority (“LA2”), LA1
must notify LA2 of that fact.
20 Lead enforcement authority
(1) In this section and in sections 21 to 23 “lead enforcement authority” means—
(a) the Secretary of State, or
10(b) a person whom the Secretary of State has arranged to be the lead
enforcement authority in accordance with subsection (2).
(2) The Secretary of State may make arrangements for a local weights and
measures authority in England or Wales to be the lead enforcement authority
instead of the Secretary of State.
15(3) The arrangements—
(a) may include provision for payments by the Secretary of State;
(b) may include provision about bringing the arrangements to an end.
(4) The Secretary of State may by regulations make transitional or saving provision
which applies when there is a change in the lead enforcement authority.
20(5) The regulations may relate to a specific change in the lead enforcement
authority or to changes that might arise from time to time.
(6) A statutory instrument containing regulations under subsection (4) is subject
to the negative procedure.
21 General duties of lead enforcement authority
25(1) It is the duty of the lead enforcement authority to oversee the operation of
the relevant provisions of this Part in England and Wales.
(2) The “relevant provisions of this Part” means the provisions of this Part except
sections 11 and 12 (statements in leases and restriction on title).
(3)
30
It is the duty of the lead enforcement authority to issue guidance to
enforcement authorities about their enforcement of the leasehold house
restrictions (and if the lead enforcement authority is not the Secretary of State,
the Secretary of State may give directions as to the content of the guidance).
(4) It is the duty of the lead enforcement authority to provide information and
35
advice to the public in England and Wales about the operation of the relevant
provisions of this Part, in such form and manner as it considers appropriate.
(5) The lead enforcement authority may disclose information to an enforcement
authority for the purposes of enabling that authority to determine whether
there has been a breach of a leasehold house restriction.
Leasehold and Freehold Reform Bill 14
Part 1—Leasehold houses

(6) If the lead enforcement authority is not the Secretary of State, the lead
enforcement authority must keep under review and from time to time advise
the Secretary of State about—
(a) the operation of the relevant provisions of this Part, and
5(b) social and commercial developments relating to the grant or assignment
of long residential leases of houses in England and Wales.
22 Enforcement by lead enforcement authority
(1) The lead enforcement authority may—
(a)
10
take steps to enforce the leasehold house restrictions if it considers it
is necessary or expedient to do so;
(b) for that purpose, exercise any powers that an enforcement authority
may exercise for the purpose of the enforcement of the leasehold house
restrictions.
(2)
15
If the lead enforcement authority proposes to take steps in respect of a breach
(or suspected breach) of a leasehold house restriction, it must notify the
enforcement authority for the area in which the breach occurred (or may have
occurred) that it proposes to do so.
(3) If the lead enforcement authority notifies an enforcement authority under
20
subsection (2) but does not take the proposed steps, the lead enforcement
authority must notify the enforcement authority of that fact.
(4) If an enforcement authority receives a notification under subsection (2), the
authority is relieved of its duty under section 17(1) in relation to the breach
unless the authority receives a notification under subsection (3).
(5)
25
But the lead enforcement authority may require the enforcement authority to
assist the lead enforcement authority in taking steps to enforce the leasehold
house restriction referred to in subsection (2).
23 Further powers and duties of enforcement authorities
(1) An enforcement authority must notify the lead enforcement authority if the
30
enforcement authority believes that a breach of a leasehold house restriction
has occurred in its area.
(2) An enforcement authority must report to the lead enforcement authority,
whenever the lead enforcement authority requires and in such form and with
such particulars as it requires, on that enforcement authority’s enforcement
of the leasehold house restrictions.
35(3) An enforcement authority must have regard to the guidance issued under
section 21(3).
(4) For the investigatory powers available to an enforcement authority for the
purposes of enforcing a leasehold house restriction, see Schedule 5 to the
Consumer Rights Act 2015 (investigatory powers of enforcers etc).
15 Leasehold and Freehold Reform Bill
Part 1—Leasehold houses

(5) In paragraph 10 of Schedule 5 to the Consumer Rights Act 2015 (duties and
powers to which Schedule 5 applies), at the appropriate places insert—
(a) “section 17 of the Leasehold and Freehold Reform Act 2024;”;
(b) “section 22 of the Leasehold and Freehold Reform Act 2024”.
5(6) See also paragraph 44 of Schedule 5 to the Consumer Rights Act 2015 (exercise
of functions outside enforcer’s area).
General
24 Power to amend: permitted leases and definitions
(1) The Secretary of State may by regulations—
10(a) amend the following definitions—
(i) “long residential lease of a house” in section 2;
(ii) a lease which has a “long term” in section 3;
(iii) “house” in section 5;
(b) amend Schedule 1.
15(2) A statutory instrument containing (whether alone or with other provision)—
(a) regulations under subsection (1)(a), or
(b) regulations under subsection (1)(b) which add a category of lease to
Schedule 1 or omit a category of lease from that Schedule,
is subject to the affirmative procedure.
20(3) Any other statutory instrument containing regulations under subsection (1)(b)
is subject to the negative procedure.
(4) See also the powers to make regulations under paragraphs 2(1)(b), 3(1)(b),
6(2) and 7(1)(b) of Schedule 1.
(5)
25
The provision that may be made by regulations under this section by virtue
of section 121(1) (consequential etc provision) includes provision amending
or repealing any provision of this Part.
25 Interpretation of Part 1
(1) In this Part—
“appropriate tribunal” means—
30(a) in relation to a lease of a house in England, the First-tier
Tribunal or, where determined by or under Tribunal Procedure
Rules, the Upper Tribunal; and
(b) in relation to a lease of a house in Wales, a leasehold valuation
tribunal;
35“appurtenant property”, in relation to a house, means any garage,
outhouse, garden, yard or appurtenances belonging to, or usually
enjoyed with, the house;
“enforcement authority” means a local weights and measures authority
in England or Wales;
Leasehold and Freehold Reform Bill 16
Part 1—Leasehold houses

“house”: see section 5;
“lead enforcement authority” has the meaning given by section 20;
“lease”—
(a)
5
means a lease at law or in equity (and references to the grant
or assignment of a lease are to be construed accordingly);
(b) includes a sub-lease;
(c) does not include a mortgage term;
“leasehold house restrictions” has the meaning given by section 17(2);
“long residential lease of a house”: see section 2;
10“long term”, in relation to a lease: see section 3;
“notify” means notify in writing, and “notification” is to be construed
accordingly;
“permitted lease”: see section 7;
15
“permitted lease certificate” means a certificate issued by the appropriate
tribunal under section 8;
“residential lease”: see section 6.
(2) In this Part, references to the grant of a lease in relation to a lease which takes
effect as a deemed surrender and regrant of a lease are to the regrant of the
lease.
20PART 2
LEASEHOLD ENFRANCHISEMENT AND EXTENSION
Eligibility for enfranchisement and extension
26 Removal of qualifying period before enfranchisement and extension claims
(1)
25
In section 1 of the Leasehold Reform Act 1967 (“the LRA 1967”) (tenants
entitled to enfranchisement or extension)—
(a) in subsection (1), omit paragraph (b) and the “and” preceding it;
(b) in subsection (1ZC), in the words before paragraph (a), for “(1)(a) and
(b)” substitute “(1)”.
(2)
30
In section 39 of the Leasehold Reform, Housing and Urban Development Act
1993 (“the LRHUDA 1993”) (right of qualifying tenant of flat to acquire new
lease)—
(a) in subsection (1)—
(i) after “conferring on a” insert “qualifying”;
(ii) omit “, in the circumstances mentioned in subsection (2),”;
35(b) omit subsection (2) (requirement to have been a qualifying tenant for
last two years);
(c) omit subsection (3A) (right of personal representatives).
(3) Omit section 42(4A) of the LRHUDA 1993 (notices given by personal
representatives).
17 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

27 Removal of restrictions on repeated enfranchisement and extension claims
(1) In the LRA 1967—
(a) omit section 9(3)(b) and the “and” preceding it (prohibition on further
claim);
5(b) in section 16, omit subsections (1)(b), (2) and (3) (prohibition of further
extension of lease);
(c) in section 20, omit subsections (5) and (6) (power of court to void
further claims);
(d)
10
in section 23 (agreements excluding or modifying rights of tenant), in
subsection (2)(b), omit the words from “or any provision” to “or any
part of it”;
(e) in Schedule 3, omit paragraph 4(3) (power of court to void further
claims).
(2) In the LRHUDA 1993—
15(a) omit section 13(9) (prohibition of further claim for collective
enfranchisement);
(b) omit section 42(7) (prohibition of further claim for new lease).
28 Change of non-residential limit on collective enfranchisement claims
20
In section 4(1)(b) of the LRHUDA 1993 (non-residential limit on collective
enfranchisement claims), for “25 per cent.” substitute “50%”.
29 Eligibility for enfranchisement and extension: specific cases
Schedule 3 makes provision about the availability of rights to enfranchisement
and extension under the LRA 1967 and the LRHUDA 1993 in certain specific
cases.
25Effects of enfranchisement
30 Acquisition of intermediate interests in collective enfranchisement
(1) The LRHUDA 1993 is amended as follows.
(2) In section 1 (the right to collective enfranchisement), for subsection (2)(b)
substitute—
30“(b) Schedule A1 has effect with respect to the acquisition of certain
leasehold interests.”
Leasehold and Freehold Reform Bill 18
Part 2—Leasehold enfranchisement and extension

(3) Before Schedule 1 insert—
Section 1(2)(b) “SCHEDULE A1
ACQUISITION OF INTERMEDIATE INTERESTS ON COLLECTIVE ENFRANCHISEMENT
Application of this Schedule
51 This Schedule applies where the right to collective enfranchisement
is exercised in relation to premises (“the relevant premises”).
(1)
(2) Paragraphs 2(4), 4(1) and (2) and 5(1) and (2) require the nominee
purchaser to acquire the whole or part of certain intermediate leases.
(3)
10
Paragraphs 2(5) and 3(2) enable the nominee purchaser to acquire
the whole or part of certain intermediate leases.
(4) Any reference in this Act to the acquisition by the nominee
purchaser of the whole or part of a lease under this Schedule is a
reference to its acquisition by the nominee purchaser on behalf of
the participating tenants.
15Acquisition of a lease that is superior to the lease of a qualifying tenant
2 This paragraph applies to a lease (the “superior lease”) that is
superior to a lease of a qualifying tenant (the “inferior lease”) if,
(1)
and to the extent that, the superior lease demises relevant residential
20
property (whether or not either lease also demises any other
property of any kind).
(2) Residential property demised by the superior lease is “relevant” if
it—
(a) is also demised by the inferior lease, and
(b)
25
has the required connection with the collective
enfranchisement.
(3) Residential property demised by the inferior lease has the required
connection with the collective enfranchisement if—
(a) the residential property is a flat or part of a flat, and the
30
tenant under the inferior lease is a qualifying tenant by virtue
of the inferior lease demising that flat or part, or
(b) the property is appurtenant property, and the tenant under
the inferior lease is a qualifying tenant by virtue of the
inferior lease demising the related flat.
35
The “related flat” is the flat to which the appurtenant property
relates.
(4) If the tenant under the inferior lease is a participating tenant, the
nominee purchaser must acquire—
(a) the superior lease, if all of the property demised by it is
relevant residential property, or
40(b) the superior lease to the extent that it demises relevant
residential property.
19 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(5) If the tenant under the inferior lease is not a participating tenant,
the nominee purchaser may acquire—
(a) the superior lease, if all of the property demised by it is
relevant residential property, or
5(b) the superior lease to the extent that it demises relevant
residential property.
(6) But if the superior lease demises two or more flats, the nominee
purchaser may either—
(a) make the acquisition permitted by sub-paragraph (5), or
10(b) acquire the superior lease to the extent that it demises one
or more of those flats and any appurtenant property relating
to the flat or flats acquired.
(7) The whole or a part of a superior lease is not to be acquired under
this paragraph if—
15(a) the superior lease is immediately superior to the inferior
lease,
(b) the term of the superior lease ends after the term of the
inferior lease, and
(c)
20
the qualifying tenant is also the tenant under the superior
lease.
(8) This paragraph is subject to paragraph 6.
Acquisition of a lease of common parts or section 1(3)(b) addition
3 This paragraph applies to a lease if, and to the extent that, the
25
property demised by the lease consists of common parts of the
relevant premises or a section 1(3)(b) addition.
(1)
(2) If the necessity test is met, the nominee purchaser may acquire—
(a) the lease, if all the property demised by it is common parts
of the relevant premises or a section 1(3)(b) addition (or
both),
30(b) the lease to the extent that it demises common parts of the
relevant premises or a section 1(3)(b) addition (or both), or
(c) a smaller portion of the lease than is allowed by paragraph
(a) or (b).
(3)
35
The necessity test is met if the acquisition of common parts or a
section 1(3)(b) addition under sub-paragraph (2) is reasonably
necessary for the proper management or maintenance of those
common parts or that addition on behalf of the participating tenants.
(4) A lease or a part of a lease which demises common parts or a section
40
1(3)(b) addition is not to be acquired under this paragraph if the
tenant under the lease grants for the remainder of the term of the
lease such rights over the common parts or section 1(3)(b) addition
as will enable the proper management or maintenance of it on behalf
of the participating tenants.
Leasehold and Freehold Reform Bill 20
Part 2—Leasehold enfranchisement and extension

(5) This paragraph is subject to paragraph 6.
(6) In this paragraph “section 1(3)(b) addition” means property—
(a) of the kind described in section 1(3)(b) (property which there
is an entitlement to use in common with other tenants), and
5(b) of which the freehold is to be acquired on the collective
enfranchisement under section 1(2)(a).
Acquisition of leases superior to a lease being acquired under paragraph 2(5) or 3
4 This paragraph applies if the nominee purchaser acquires the whole,
or a part, of a lease under paragraph 2(5) or 3 (the “inferior lease”).
(1)
10(2) The nominee purchaser must also acquire any lease or leases
superior to the inferior lease if, and to the extent that, the superior
lease or leases demise property that is demised by the inferior lease
or the part acquired.
Acquisition of leases superior to a lease being acquired under section 21(4)
155 If— (1)
(a) the nominee purchaser acquires the whole of a lease under
section 21(4) (the “inferior lease”), and
(b) some or all of the property that is demised by the inferior
lease is paragraph 2(5) or 3(1) property,
20the nominee purchaser must also acquire any lease or leases superior
to the inferior lease if, and to the extent that, the superior lease or
leases demise paragraph 2(5) or 3(1) property that is demised by
the inferior lease.
(2) If—
25(a) the nominee purchaser acquires a part of a lease under
section 21(4) (the “inferior lease”), and
(b) some or all of the property that is demised by part of the
inferior lease that is acquired is paragraph 2(5) or 3(1)
property,
30the nominee purchaser must also acquire any lease or leases superior
to the inferior lease if, and to the extent that, the superior lease or
leases demise paragraph 2(5) or 3(1) property that is demised by
the part of the inferior lease acquired.
(3) Property is “paragraph 2(5) or 3(1) property” if—
35(a) under paragraph 2(5) the nominee purchaser is entitled to
acquire the whole of a lease, or a part of a lease, which
demises the property, or
(b) under paragraph 3 the nominee purchaser is entitled, or
40
would be entitled if the necessity test were met, to acquire
the whole of a lease, or a part of a lease, which demises the
property.
21 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

No entitlement to acquire property with certain public sector interests
6 This paragraph applies to a lease if— (1)
(a) the tenant is a public sector landlord,
(b)
5
some or all of the property demised by the lease is residential
property that is also demised by a public sector occupational
tenancy, and
(c) either—
(i) the lease is immediately superior to the public sector
occupational tenancy, or
10(ii) a public sector landlord is the tenant under every
other lease which is inferior to the lease and superior
to the public sector occupational lease and which
demises any of the residential property that is also
demised by the public sector occupational tenancy.
15(2) The lease is not to be acquired under this Schedule if, and to the
extent that, it demises the residential property that is also demised
by the public sector occupational tenancy.
(3) Where this paragraph applies to a lease in a case that is within
20
sub-paragraph (1)(c)(ii), this paragraph also applies (by virtue of
sub-paragraph (1)) to every other intermediate lease referred to in
that sub-paragraph.
(4) In this paragraph “public sector occupational tenancy” means—
(a) a secure tenancy,
(b) an introductory tenancy,
25(c) a secure contract, or
(d) an introductory standard contract.
Severance
7 If the nominee purchaser is required or entitled to acquire only part
30
of a lease under this Schedule, the lease is to be severed to enable
that part to be acquired.
Application of this Schedule to different parts of the same lease
8 Different parts of the same lease may be acquired in accordance
with this Schedule (whether under the same or different provisions).
Interpretation
359 In this Schedule—
“appurtenant property”, in relation to a flat, means any garage,
outhouse, garden, yard and appurtenances belonging to, or
usually enjoyed with, the flat;
“residential property” means—
Leasehold and Freehold Reform Bill 22
Part 2—Leasehold enfranchisement and extension

(a) the whole or a part of a flat in the relevant premises,
or
(b) property that is appurtenant property in relation to
a flat in the relevant premises.”
5(4) Omit section 2 (acquisition of leasehold interests).
(5) In section 9 (the reversioner and other relevant landlords), in subsections (2)
and (2A), for “section 2(1)(a) or (b)” substitute “Schedule A1”.
(6) In section 13 (notice by qualifying tenants of claim to exercise right), in
subsection (3)(c), for sub-paragraph (i) substitute—
10“(i) any leasehold interest which it is proposed to acquire
under or by virtue of Schedule A1, and”.
(7) In section 19 (effect of initial notice as respects subsequent transactions by
freeholder etc), in subsection (1)(a)(ii), for “by virtue of section 2(1)(a) or (b)”
substitute “under or by virtue of Schedule A1”.
15(8) In section 21 (reversioner’s counter-notice), in subsection (3), after paragraph
(b) insert—
“(ba) if (in a case where any property specified in the initial notice
under section 13(3)(c)(i) is property falling within paragraph
20
3 of Schedule A1) any such counter-proposal relates to the
grant of rights in pursuance of paragraph 3(4) of Schedule A1,
specify the nature of those rights and the property over which
it is proposed to grant them;”
(9) In section 26 (applications where relevant landlord cannot be found), in
subsection (1)(i), for “section 2(1)” substitute “Schedule A1”.
25(10) In Schedule 3 (initial notice: supplementary provisions), in paragraph 15
(inaccuracies or misdescription in initial notice)—
(a) for the heading substitute “initial notice: inaccuracies or misdescription
and variation”;
(b) in sub-paragraph (2)(a), for “or 2” substitute “or Schedule A1”;
30(c) after sub-paragraph (2), insert—
“(2A) The notice may, with the permission of the appropriate
tribunal, be amended so as to—
(a) include a lease which the nominee purchaser has
35
become required to acquire under paragraph 2(4) of
Schedule A1 by virtue of the tenant under the lease
becoming a participating tenant;
(b) exclude a lease which the nominee purchaser has
ceased to be required to acquire under paragraph
40
2(4) of Schedule A1 by virtue of the lease no longer
being held by a participating tenant;”.
23 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

31 Right to require leaseback by freeholder after collective enfranchisement
(1) The LRHUDA 1993 is amended as follows.
(2) In section 13(3) (contents of initial notice), after paragraph (c) insert—
“(ca)
5
specify any flats or other units contained in the specified
premises which it is proposed will be leased back to the
freeholder under section 36 and Part 3A of Schedule 9;”.
(3) In section 21(3)(a) (contents of counter-notice), in sub-paragraph (ii), after
“leaseback proposals” insert “under Part 2 or 3 of Schedule 9”.
(4)
10
In section 36 (nominee purchaser required to grant leases back to former
freeholder in certain circumstances)—
(a) after subsection (1) insert—
“(1A) In connection with the acquisition by the nominee purchaser
of a freehold interest in the specified premises, the person from
15
whom the interest is acquired must accept a grant of a lease
of a flat or other unit contained in the specified premises, or
part of such a flat or other unit, where required to do so by
Part 3A of Schedule 9.”;
(b) in subsection (2), for “such lease” substitute “lease required under this
section and Schedule 9 to be granted or accepted”;
20(c) in subsection (4), for “II or III” substitute “2, 3 or 3A”;
(d) for the heading substitute “Required grant and acceptance of leasebacks
in certain circumstances”.
(5) In Schedule 9 (grant of leases back to former freeholder)—
(a)
25
in paragraph 1(1), in the definition of “the demised premises”, for “II
or III” substitute “2, 3 or 3A”;
(b) after Part 3 insert—
“PART 3A
RIGHT OF NOMINEE PURCHASER TO REQUIRE LEASEBACK OF
CERTAIN UNITS
30Flats and other units without participating tenants
7A This paragraph applies where a flat or other unit contained
in the specified premises is not let to a participating tenant
immediately before the appropriate time.
(1)
(2)
35
This paragraph does not apply to a flat or other unit to which
paragraph 2 or 3 applies.
(3) This paragraph does not apply where—
(a) a flat is leased to a qualifying tenant immediately
before the appropriate time,
(b)
40
a lease of the flat that is superior to the lease held
by the qualifying tenant exists at that time, and
Leasehold and Freehold Reform Bill 24
Part 2—Leasehold enfranchisement and extension

(c) the nominee purchaser has decided, in accordance
with paragraph 2(5) of Schedule A1, to acquire the
superior lease insofar as it comprises the flat.
(4)
5
Where this paragraph applies, the freeholder must, if the
nominee purchaser by notice requires them to do so, accept
a lease of the flat or other unit in accordance with section
36 and paragraph 7B below.
(5) If, immediately before the appropriate time, the flat or other
10
unit in question is comprised in two or more different
freehold titles—
(a) a grant of a lease to a freeholder under this paragraph
may only provide for so much of the flat or other
unit as was comprised in the freehold title owned by
15
the freeholder immediately before the appropriate
time to be leased to that freeholder;
(b) a grant of a lease under this paragraph for part of a
flat or other unit does not have to be accepted by the
freeholder unless a separate lease under this
20
paragraph is granted to the freeholder of every other
freehold title in which the flat or unit in question is
comprised.
Provisions as to terms of lease
7B Any lease granted to the freeholder under paragraph 7A,
25
and any agreement collateral to it, must conform with the
(1)
provisions of Part 4 of this Schedule except to the extent that
any departure from those provisions—
(a) is agreed to by the nominee purchaser and the
freeholder, or
(b)
30
is directed by the appropriate tribunal on an
application made by either of those persons.
(2) The appropriate tribunal may not direct any such departure
from those provisions unless it appears to the tribunal that
it is reasonable in the circumstances.
(3)
35
In determining whether any such departure is reasonable in
the circumstances, the tribunal must—
(a) have particular regard to the interests of any person
who will be the tenant of the flat or other unit in
question under a lease inferior to the lease to be
granted to the freeholder;
40(b) where the flat or other unit in question is comprised
in two or more different freehold titles immediately
before the appropriate time, take that into account.
(4) Subject to the preceding provisions of this paragraph, any
1
such lease or agreement as is mentioned in sub-paragraph
25 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(1) may include such terms as are reasonable in the
circumstances.”;
(c) in paragraph 10, after sub-paragraph (2) insert—
“(3)
5
In the application of this paragraph or paragraph 11 to a
lease under paragraph 7A for part of a flat or other unit
where that flat or other unit is comprised in two or more
different freehold titles immediately before the appropriate
time—
(a)
10
a reference to “other property” in this paragraph or
paragraph 11 includes any other part of the flat or
other unit in question, and
(b) an obligation under this paragraph or paragraph 11
to include in the lease a particular kind of provision
15
in relation to other property is to be construed
accordingly.”;
(d) in paragraph 16(2), for “4 or 7” substitute “4, 7 or 7B”.
Effects of extension
32 Longer lease extensions
(1)
20
In section 14(1) of the LRA 1967 (obligation to grant extended lease), for “fifty
years” substitute “990 years”.
(2) In section 56(1) of the LRHUDA 1993 (obligation to grant new lease), in the
words after paragraph (b), for “90 years” substitute “990 years”.
33 Lease extensions under the LRA 1967 on payment of premium at peppercorn
rent
25(1) The LRA 1967 is amended as follows.
(2) In section 14 (obligation to grant extended lease)—
(a) in subsection (1), for “, in substitution for the existing tenancy”
substitute “—
(a) in substitution for the existing tenancy, and
30(b) on paying the price payable (see section 14A) in respect
of the grant,”;
(b) omit subsection (2)(c);
(c) in subsection (3), in the words before paragraph (a), after “otherwise
than on tender” insert “, in addition to the price payable,”;
35(d) after subsection (7) insert—
“(8) The right to an extended lease may be exercised in relation to
a lease previously granted under this section; and the provisions
of this Part are to apply, with any necessary modifications, for
40
the purposes of or in connection with any claim to exercise
1
that right in relation to a lease so granted as they apply for
Leasehold and Freehold Reform Bill 26
Part 2—Leasehold enfranchisement and extension

the purposes of or in connection with any claim to exercise
that right in relation to a lease which has not been so granted.”
Section 14A (referred to in subsection (2)(a)) is inserted by section 34 of this
Act.
5(3) In section 15 (terms of tenancy to be granted on extension)—
(a) for subsection (2) substitute—
“(2) The new tenancy must provide that as from the date it is
granted the rent payable for the house and premises is a
peppercorn rent.
10(2A) But if the existing tenancy is a shared ownership lease, the rent
payable for the house and premises under the new tenancy is
as follows (and subsection (2) does not apply)—
(a) if the existing tenancy provides for rent to be payable
15
in respect of the landlord’s share in the house and
premises, subsection (1) applies to the terms of the new
tenancy relating to that rent;
(b) whether or not the existing tenancy provides for rent
to be payable in respect of the tenant’s share in the
20
house and premises, the new tenancy must provide
that, as from the date it is granted, a peppercorn rent
is payable in respect of the tenant’s share;
and a reference in any enactment (whenever passed or made)
to rent payable in accordance with subsection (2) includes a
reference to the rent payable in accordance with this subsection.
25(2B) For the purposes of subsection (2A), if the existing tenancy
does not reserve separate rents in respect of the tenant’s share
in the house and premises and the landlord’s share in the house
and premises, any rent reserved is to be treated as reserved in
respect of the landlord’s share.
30(2C) In this section “peppercorn rent” has the same meaning as in
the Leasehold Reform (Ground Rent) Act 2022 — see section
4(3) of that Act.”;
(b) in subsection (3)—
(i)
35
for “rent” in the first place it occurs substitute “peppercorn
rent”;
(ii) for “the time when rent becomes payable in accordance with
subsection (2) above” substitute “the original term date”;
(c) in subsection (6)—
(i)
40
omit “the first reference in subsection (2) above to that date
shall have effect as a reference to the grant of the new tenancy;
but”;
(ii) omit “(after making any necessary apportionment)”;
(iii) omit “rent and” in both places it occurs;
27 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(iv) after “section 14(3)(a) above shall apply” insert “in respect of
those matters”.
(4) In section 21(1) (jurisdiction of tribunals), omit paragraph (b).
(5) In section 31(2)(a) (ecclesiastical property), omit “or rent”.
5(6) In Schedule 1 (enfranchisement or extension by sub-tenants), in paragraph
10(4)—
(a) omit the words from the first “shall give effect to” to “intermediate
landlord, and”;
(b)
10
for “any of those landlords” substitute “the landlord granting the new
tenancy, the immediate landlord of whom the new tenancy will be
held and any intermediate landlord”.
Price payable on enfranchisement or extension
34 LRA 1967: determining price payable for freehold or lease extension
(1) The LRA 1967 is amended as follows.
15(2) In section 9 (purchase price and costs of enfranchisement)—
(a) before subsection (1) insert—
“(A1) The price payable for a house and premises on a conveyance
under section 8 is to be determined in accordance with section
36 of the Leasehold and Freehold Reform Act 2024.”;
20(b) omit subsections (1) to (2).
(3) After section 14 insert—
“14A Extension of lease: determining the price payable
The price payable for an extended lease granted under section 14 is
25
to be determined in accordance with section 36 of the Leasehold and
Freehold Reform Act 2024.”
35 LRHUDA 1993: determining price payable for collective enfranchisement or
new lease
(1) The LRHUDA 1993 is amended as follows.
(2)
30
In section 32 (determination of price for collective enfranchisement), for
subsection (1) substitute—
“(1) The price payable on the acquisition of a freehold and other interests
under this Chapter is to be determined in accordance with section 36
of the Leasehold and Freehold Reform Act 2024.”
(3) In section 56 (obligation to grant new lease)—
Leasehold and Freehold Reform Bill 28
Part 2—Leasehold enfranchisement and extension

(a) in subsection (1), for paragraph (b) substitute—
“(b) on payment of the price payable in respect of the grant
as determined in accordance with section 36 of the
Leasehold and Freehold Reform Act 2024,”;
5(b) after subsection (1) insert—
“(1A) But if the existing lease is a shared ownership lease, the rent
payable under the new lease of the flat is as follows (and
subsection (1) does not apply for the purpose of specifying the
rent under the new lease)—
10(a) whether or not the existing lease provides for rent to
be payable in respect of the tenant’s share in the flat,
the new lease must provide for a peppercorn rent to be
payable in respect of the tenant’s share;
(b)
15
if the existing lease provides for rent to be payable in
respect of the landlord’s share in the flat, section 57(1)
applies to the terms of the new lease relating to that
rent;
and a reference in any enactment (whenever passed or made)
20
to rent payable in accordance with subsection (1) includes a
reference to the rent payable in accordance with this subsection.
(1B) For the purposes of subsection (1A), if the existing lease does
not reserve separate rents in respect of the tenant’s share in
the flat and the landlord’s share in the flat, any rent reserved
is to be treated as reserved in respect of the landlord’s share.”
25(4) Omit Schedule 6 (purchase price payable by nominee purchaser).
(5) Omit Schedule 13 (premium and other amounts payable by tenant on grant
of new lease).
36 Enfranchisement or extension: new method for calculating price payable
(1)
30
Where this section applies to the acquisition of a freehold or grant of a lease,
the price payable is—
(a) the market value, and
(b) the other compensation (if any).
(2) Schedule 4 sets out—
(a)
35
how the market value is to be determined — see Parts 1 to 5 and 7
of the Schedule, and
(b) how to divide the market value into shares (where loss is suffered by
certain landlords other than the landlord transferring the freehold or
granting the lease) — see Part 6 of the Schedule.
(3)
40
Schedule 5 sets out when other compensation is payable and how to determine
its amount.
(4) Schedule 6 contains interpretation provision applicable to Schedules 4 and 5.
29 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(5) Schedule 7 contains amendments of the LRA 1967 and the LRHUDA 1993
that are consequential on sections 34 and 35, this section and Schedules 4 to
6.
(6)
5
These are the provisions under which this section applies to the acquisition
of a freehold or grant of a lease—
(a) section 9(A1) of the LRA 1967 (transfer of a freehold house under the
LRA 1967);
(b) section 14A(1) of the LRA 1967 (grant of an extended lease of a house
under the LRA 1967);
10(c) section 32(1) of the LRHUDA 1993 (collective enfranchisement of a
building under the LRHUDA 1993);
(d) section 56(1)(b) of the LRHUDA 1993 (grant of a new lease of a flat
under the LRHUDA 1993).
(7)
15
This section has effect subject to the following provisions (which provide for
the adjustment of the price payable where property is in the area of a
management scheme)—
(a) section 19(10)(b) of the LRA 1967;
(b) section 70(12)(b) and (c) of the LRHUDA 1993.
(8) In this Part—
20(a) “transfer of a freehold house under the LRA 1967” means the
conveyance or transfer of the freehold of a house and any other
premises under Part 1 of the LRA 1967;
(b) “grant of an extended lease of a house under the LRA 1967” means
25
the grant of an extended lease of a house and any other premises
under Part 1 of the LRA 1967;
(c) “collective enfranchisement of a building under the LRHUDA 1993”
means the acquisition by a nominee purchaser of a freehold and any
other interests under Chapter 1 of Part 1 of the LRHUDA 1993;
(d)
30
“grant of a new lease of a flat under the LRHUDA 1993” means the
grant of a new lease under Chapter 2 of Part 1 of the LRHUDA 1993.
Costs of enfranchisement or extension
37 Costs of enfranchisement and extension under the LRA 1967
(1) The LRA 1967 is amended as follows.
(2) In section 9 (costs of enfranchisement)—
35(a) in the heading, omit “and costs of enfranchisement,”;
(b) omit subsections (4) and (4A);
(c) omit subsection (5)(b).
(3) In section 10(1A) (landlord’s covenants on enfranchisement), omit the words
from “and in the absence” to “assurance)”.
40(4) In section 14 (costs of extension)—
Leasehold and Freehold Reform Bill 30
Part 2—Leasehold enfranchisement and extension

(a) omit subsections (2) and (2A);
(b) omit subsection (3)(b).
(5) In section 15(9) (landlord’s covenants on extension), omit the words from
“and in the absence” to “assurance)”.
5(6) After section 19 insert—
“Costs
19A Liability for costs associated with enfranchisement and extension
claims
(1)
10
A tenant is not liable for any costs incurred by any other person as a
result of the tenant’s claim to acquire a freehold or extended lease
under this Part, except as referred to in—
(a) subsection (4),
(b) section 19B (liability where claim ceases to have effect), and
(c)
15
section 19C (liability where tenant acquires the freehold or
lease).
(2) A former tenant is not liable for any costs incurred by any other person
as a result of the former tenant’s claim to acquire a freehold or
extended lease under this Part, except as referred to in subsections (4)
and (5).
20(3) A lease, transfer, contract or other arrangement is accordingly of no
effect to the extent it would provide to the contrary.
(4) A tenant or former tenant is liable for costs incurred by another person
in connection with proceedings before a court or tribunal if—
(a)
25
the court or tribunal has power under this Part or another
enactment to order that the tenant or former tenant pay those
costs, and
(b) the court or tribunal makes such an order.
(5) A former tenant is liable for costs incurred by a successor in title to
30
the extent agreed between the former tenant and that successor in
title.
(6) In this section and sections 19B to 19E—
(a) “claim” includes an invalid claim;
(b) “costs” does not include—
(i)
35
anything for which the tenant is required to pay
compensation under this Part, or
(ii) anything for which the tenant is required to pay under
section 9(A1) (price payable for freehold) or section 14A
(price payable for extended lease).
(7)
40
In this section, “former tenant” means a person who was a tenant
making a claim to acquire a freehold or extended lease under this
Part, but is no longer a tenant.
31 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(8) See also sections 20CA and 20J of the Landlord and Tenant Act 1985,
which prevent costs in connection with a claim under this Part being
recovered by way of a variable service charge (within the meaning of
section 18 of that Act).
519B Liability for costs: failed claims
(1) A tenant is liable to the landlord for a prescribed amount in respect
of non-litigation costs if—
(a) the tenant’s claim to acquire a freehold or extended lease of a
house and premises under this Part ceases to have effect, and
10(b) the reason why the claim ceases to have effect is not a
permitted reason.
(2) The permitted reasons are—
(a) the claim ceasing to have effect under regulations under section
4B (landlord certified as community housing provider);
15(b) the claim ceasing to have effect under section 5(6) (compulsory
acquisition);
(c) an order being made under section 17(2) (landlord’s
redevelopment rights);
(d)
20
an order being made under section 18(4) (landlord’s residential
rights);
(e) the claim ceasing to have effect under section 28(1)(a) (land
required for public purposes etc);
(f) the claim ceasing to have effect under section 32A (property
transferred for public benefit etc);
25(g) the claim ceasing to have effect under section 74(2) of the
Leasehold Reform, Housing and Urban Development Act 1993
(estate management schemes).
(3) For the purposes of this section—
(a)
30
where Schedule 1 (enfranchisement or extension by sub-tenants)
applies to the claim, “the landlord” means the reversioner (see
paragraph 1(1)(b) of that Schedule);
(b) “prescribed” means prescribed by, or determined in accordance
with, regulations made—
(i) in relation to England, by the Secretary of State;
35(ii) in relation to Wales, by the Welsh Ministers;
(c) “non-litigation costs” are costs that are or could be incurred
by a landlord as a result of a claim under this Part other than
in connection with proceedings before a court or tribunal;
(d) a reference to a claim “ceasing to have effect” includes—
40(i) the claim having been withdrawn or deemed
withdrawn;
(ii) the claim having been set aside by the court or the
appropriate tribunal;
Leasehold and Freehold Reform Bill 32
Part 2—Leasehold enfranchisement and extension

(iii) the claim ceasing to have effect by virtue of the tenant
failing to comply with an obligation arising from the
claim;
(e)
5
a claim does not cease to have effect if it results in the
acquisition of the freehold or extended lease;
(f) where a claim ceases to have effect by virtue of a person who
was a tenant assigning their lease without assigning the claim
under section 5(2), “tenant” includes that person.
(4) Regulations under this section are to be made by statutory instrument.
10(5) A statutory instrument containing regulations under this section is—
(a) where it contains regulations made by the Secretary of State,
subject to annulment in pursuance of a resolution of either
House of Parliament;
(b)
15
where it contains regulations made by the Welsh Ministers,
subject to annulment in pursuance of a resolution of Senedd
Cymru.
19C Liability for costs: successful claims
(1) A tenant is liable to the landlord for the amount referred to in
subsection (2) if—
20(a) the tenant makes a claim to acquire a freehold or extended
lease of a house and premises under this Part,
(b) the tenant acquires the freehold or extended lease,
(c) the price payable by the tenant for the freehold under section
25
9(A1), or for the extended lease under section 14A, is less than
a prescribed amount,
(d) the landlord incurs costs as a result of the claim,
(e) the costs are incurred other than in connection with proceedings
before a court or tribunal,
(f) the costs incurred by the landlord are reasonable, and
30(g) the costs are more than the price payable.
(2) The amount is the difference between—
(a) the price payable by the tenant, and
(b) the costs incurred by the landlord, or, if those costs exceed a
prescribed amount, that prescribed amount.
35(3) In this section—
(a) where Schedule 1 (enfranchisement or extension by sub-tenants)
applies to the claim, “the landlord” in this section means the
reversioner (see paragraph 1(1)(b) of that Schedule);
(b)
40
“prescribed” means prescribed by, or determined in accordance
with, regulations made—
(i) in relation to England, by the Secretary of State;
(ii) in relation to Wales, by the Welsh Ministers.
33 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(4) Regulations under this section are to be made by statutory instrument.
(5) A statutory instrument containing regulations under this section is—
(a) where it contains regulations made by the Secretary of State,
5
subject to annulment in pursuance of a resolution of either
House of Parliament;
(b) where it contains regulations made by the Welsh Ministers,
subject to annulment in pursuance of a resolution of Senedd
Cymru.
19D
10
Power to require allocation of amounts paid under sections 19B or
19C
(1) The appropriate authority may by regulations provide for
circumstances in which, if—
(a) Schedule 1 (enfranchisement or extension by sub-tenants)
applies to a claim, and
15(b) the reversioner (see paragraph 1(1)(b) of Schedule 1) receives
an amount under section 19B or 19C,
the reversioner is required to pay a proportion of that amount to one
or more of the other landlords (see paragraph 1(3) of Schedule 1).
(2) In this section, “appropriate authority” means—
20(a) in relation to England, the Secretary of State;
(b) in relation to Wales, the Welsh Ministers.
(3) Regulations under this section—
(a) may make provision for the appropriate tribunal to order
payment;
25(b) are to be made by statutory instrument.
(4) A statutory instrument containing regulations under this section is—
(a) where it contains regulations made by the Secretary of State,
subject to annulment in pursuance of a resolution of either
House of Parliament;
30(b) where it contains regulations made by the Welsh Ministers,
subject to annulment in pursuance of a resolution of Senedd
Cymru.
19E Security for costs
35
A lease, transfer, contract or other arrangement is of no effect to the
extent it requires a tenant to pay another person an amount in
anticipation of the tenant being liable to a person in respect of their
costs as a result of a claim under this Part.”
(7) In section 20 (jurisdiction of county court), omit subsections (4) and (4A).
(8) In section 22(3)(a) (deposits), omit “and landlord’s costs”.
Leasehold and Freehold Reform Bill 34
Part 2—Leasehold enfranchisement and extension

(9) In consequence of the amendments made by subsections (2) to (8)—
(a) in section 9(5)(c) (landlord’s lien as vendor), for “him” substitute “the
tenant”;
(b)
5
in section 14(3)(c) (conditions for grant of extended lease), for “him”
substitute “the tenant”;
(c) in section 17(4)(b) (redevelopment rights), omit the words from “but”
to “the notice”;
(d) in section 18(6)(b) (residential rights), omit the words from “but” to
“the notice”;
10(e) in section 19(14)(b) (management powers), omit the words from “and”
to “withdrawn”;
(f) in section 27A(5) (compensation for ineffective claim in certain cases),
for paragraph (b) substitute—
“(b)
15
a permitted reason within the meaning of section
19B(2);”;
(g) in section 32A(5) (property transferred for public benefit), omit
paragraph (a).
38 Costs of enfranchisement and extension under the LRHUDA 1993
(1) The LRHUDA 1993 is amended as follows.
20(2) In section 28 (withdrawal of acquisition), omit subsections (4) to (7).
(3) In section 29 (deemed withdrawal), omit subsections (6) to (8).
(4) In section 32(2) (vendor’s lien), omit paragraph (c).
(5) Omit section 33 (costs of enfranchisement).
(6) In section 56(3) (conditions of grant of new lease), omit paragraph (b).
25(7) In section 57(8) (landlord’s covenants on extension), omit the words from
“and in the absence” to “assurance)”.
(8) Omit section 60 (costs of extension) and the italic heading preceding it.
(9) Before section 90 insert—
“89A Liability for costs arising under Chapters 1 and 2
30(1) A tenant is not liable for any costs incurred by any other person as a
result of the tenant’s claim under Chapter 1 or 2, except as referred
to in—
(a) subsections (5) and (8),
(b)
35
section 89B (liability where a claim under Chapter 1 ceases to
have effect),
(c) section 89E (liability where a claim under Chapter 2 ceases to
have effect), and
(d) section 89F (liability where a new lease of a flat is acquired
under Chapter 2).
35 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(2) A former tenant is not liable for any costs incurred by any other person
as a result of the tenant’s claim under Chapter 1 or 2, except as referred
to in subsection (5), (7) and (8).
(3)
5
A nominee purchaser in relation to a claim under Chapter 1 is not
liable for any costs incurred by any other person as a result of the
claim, except as referred to in—
(a) subsections (5), (8) and (9),
(b) section 89B (liability where a claim ceases to have effect),
(c)
10
section 89C (liability where a freehold of premises is acquired),
and
(d) section 89D (liability where a leaseback is required).
(4) A lease, transfer, contract or other arrangement is accordingly of no
effect to the extent it would provide to the contrary.
(5)
15
A participant is liable to another participant in respect of costs incurred
as a result of a claim under Chapter 1 to the extent agreed between
the two participants.
(6) “Participant”, in relation to a claim under Chapter 1, means—
(a) a tenant or former tenant that is or has been a participating
tenant;
20(b) a nominee purchaser in relation to the claim.
(7) A former tenant is liable for costs incurred by a successor in title to
the extent agreed between the former tenant and that successor in
title.
(8)
25
A tenant, former tenant or nominee purchaser is liable for costs
incurred by another person in connection with proceedings before a
court or tribunal if—
(a) the court or tribunal has power under Chapter 1 or 2 or another
enactment to order that those costs are paid, and
(b) the court or tribunal makes such an order.
30(9) A nominee purchaser is liable for costs in relation to a claim under
Chapter 1 as set out in section 15(7) (liability after termination of
appointment).
(10) In this section and sections 89B to 89H—
(a) “claim” includes an invalid claim;
35(b) “costs” does not include—
(i) anything for which the tenant or nominee purchaser is
required to pay compensation under Chapter 1 or 2, or
(ii) anything for which the tenant or nominee purchaser is
40
required to pay under section 32 (price payable for
collective enfranchisement) or section 56 (price payable
for new lease).
(11) In this section—
Leasehold and Freehold Reform Bill 36
Part 2—Leasehold enfranchisement and extension

(a) “former tenant” means a person who was a tenant making a
claim under Chapter 1 or 2, but is no longer a tenant;
(b) a reference to the “nominee purchaser” includes a reference
to—
5(i) where more than one person constitutes the nominee
purchaser, each person constituting the nominee
purchaser;
(ii) a person whose appointment as nominee purchaser has
terminated in accordance with section 15(3) or 16(1).
10(12) See also sections 20CA and 20J of the Landlord and Tenant Act 1985,
which prevent costs in connection with a claim under Chapter 1 or 2
being recovered by way of a variable service charge (within the
meaning of section 18 of that Act).
89B Liability for costs: failed claims under Chapter 1
15(1) A tenant is liable to the reversioner for a prescribed amount in respect
of non-litigation costs if—
(a) the tenant’s claim to acquire a freehold of premises under
Chapter 1 ceases to have effect, and
(b)
20
the reason why the claim ceases to have effect is not a
permitted reason.
(2) The permitted reasons are—
(a) the claim ceasing to have effect under regulations under section
8B (landlord certified as community housing provider);
(b)
25
an order being made under section 23(1) (landlord’s
redevelopment rights);
(c) the claim ceasing to have effect under section 30 (compulsory
acquisition procedures);
(d) the claim ceasing to have effect under section 31 (designation
for public benefit);
30(e) the claim ceasing to have effect under section 74(3) (estate
management schemes).
(3) If a tenant is liable under this section, the nominee purchaser in relation
to the claim (if any) is also liable.
(4)
35
If more than one person is liable under this section, each of those
persons is jointly and severally liable.
(5) In this section—
“nominee purchaser”—
(a) includes each person constituting the nominee purchaser
at the relevant time;
40(b) does not include any person whose appointment as
nominee purchaser has, before the relevant time,
terminated in accordance with section 15(3) or 16(1);
37 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

“non-litigation costs” means costs that are or could be incurred
by a landlord as a result of a claim under Chapter 1 other than
in connection with proceedings before a court or tribunal;
5
“prescribed” means prescribed by, or determined in accordance
with, regulations made—
(a) in relation to England, by the Secretary of State;
(b) in relation to Wales, by the Welsh Ministers;
“relevant time” means the time the claim ceases to have effect;
“tenant”—
10(a) includes a person that is not a participating tenant in
relation to the claim at the relevant time but that has
at any time been such a tenant, but
(b) does not include such a person if, before the relevant
15
time, the person assigned the lease in respect of which
they were a participating tenant to another person that
became a participating tenant in accordance with section
14(4).
(6) For the purposes of this section—
(a) a reference to a claim “ceasing to have effect” includes—
20(i) the claim having been withdrawn or deemed
withdrawn;
(ii) the claim having been set aside by the court or the
appropriate tribunal;
(iii)
25
the claim ceasing to have effect by virtue of the tenant
failing to comply with an obligation arising from the
claim;
(b) a claim does not cease to have effect if it results in the
acquisition of the freehold.
89C Liability for costs: successful claims under Chapter 1
30(1) A nominee purchaser in relation to a claim to acquire a freehold of
premises under Chapter 1 is liable to the reversioner for the amount
referred to in subsection (2) if—
(a) the nominee purchaser acquires the freehold,
(b)
35
the price payable by the nominee purchaser for the freehold
under section 32 is less than a prescribed amount,
(c) the reversioner incurs costs as a result of the claim,
(d) the costs are incurred other than in connection with proceedings
before a court or tribunal,
(e) the costs incurred by the reversioner are reasonable, and
40(f) the costs are more than the price payable.
(2) The amount is the difference between—
(a) the price payable by the nominee purchaser, and
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Part 2—Leasehold enfranchisement and extension

(b) the costs incurred by the reversioner, or, if those costs exceed
a prescribed amount, that prescribed amount.
(3) In this section—
“nominee purchaser”—
5(a) includes each person constituting the nominee purchaser
at the relevant time;
(b) does not include any person whose appointment as
nominee purchaser has, before the relevant time,
terminated in accordance with section 15(3) or 16(1);
10“prescribed” means prescribed by, or determined in accordance
with, regulations made—
(a) in relation to England, by the Secretary of State;
(b) in relation to Wales, by the Welsh Ministers;
15
“relevant time” means the time the nominee purchaser acquires
the freehold.
89D Liability for costs: leasebacks under Chapter 1
(1) A nominee purchaser in relation to a claim to acquire a freehold of
premises under Chapter 1 is liable to a freeholder for a prescribed
amount in respect of non-litigation costs if—
20(a) the nominee purchaser acquires a freehold of premises under
Chapter 1, and
(b) in connection with the acquisition, the nominee purchaser
grants the freeholder a lease of a flat or other unit in accordance
with section 36 and Part 3A of Schedule 9.
25(2) In this section—
“nominee purchaser”—
(a) includes each person constituting the nominee purchaser
at the relevant time;
(b)
30
does not include any person whose appointment as
nominee purchaser has, before the relevant time,
terminated in accordance with section 15(3) or 16(1);
“non-litigation costs” means costs that are or could be incurred
by a freeholder as a result of the grant of a lease of a flat or
35
other unit in accordance with section 36 and Part 3A of
Schedule 9, other than in connection with proceedings before
a court or tribunal;
“prescribed” means prescribed by, or determined in accordance
with, regulations made—
(a) in relation to England, by the Secretary of State;
40(b) in relation to Wales, by the Welsh Ministers;
“relevant time” means the time the nominee purchaser acquires
the freehold.
39 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

89E Liability for costs: failed claims under Chapter 2
(1) A tenant is liable to the competent landlord for a prescribed amount
in respect of non-litigation costs if—
(a)
5
the tenant’s claim to acquire a new lease of a flat under Chapter
2 ceases to have effect, and
(b) the reason why the claim ceases to have effect is not a
permitted reason.
(2) The permitted reasons are—
(a)
10
an order being made under section 47(1) (landlord’s
redevelopment rights);
(b) the claim ceasing to have effect under section 55 (compulsory
acquisition procedures).
(3) For the purposes of this section—
(a)
15
“prescribed” means prescribed by, or determined in accordance
with, regulations made—
(i) in relation to England, by the Secretary of State;
(ii) in relation to Wales, by the Welsh Ministers;
(b) “non-litigation costs” are costs that are or could be incurred
20
by a landlord as a result of a claim under Chapter 2 other than
in connection with proceedings before a court or tribunal;
(c) a reference to a claim “ceasing to have effect” includes—
(i) the claim having been withdrawn or deemed
withdrawn;
(ii)
25
the claim having been set aside by the court or the
appropriate tribunal;
(iii) the claim ceasing to have effect by virtue of the tenant
failing to comply with an obligation arising from the
claim;
(d)
30
a claim does not cease to have effect if it results in the
acquisition of the new lease;
(e) where a claim ceases to have effect by virtue of a person who
was a tenant assigning their lease without assigning the claim
(see section 43), “tenant” includes that person.
89F Liability for costs: successful claims under Chapter 2
35(1) A tenant is liable to the competent landlord for the amount referred
to in subsection (2) if—
(a) the tenant makes a claim to acquire a new lease under Chapter
2,
(b) the tenant acquires the new lease,
40(c) the price payable by the tenant for the new lease under section
56 is less than a prescribed amount,
(d) the competent landlord incurs costs as a result of the claim,
Leasehold and Freehold Reform Bill 40
Part 2—Leasehold enfranchisement and extension

(e) the costs are incurred other than in connection with proceedings
before a court or tribunal,
(f) the costs incurred by the competent landlord are reasonable,
and
5(g) the costs are more than the price payable.
(2) The amount is the difference between—
(a) the price payable by the tenant, and
(b) the costs incurred by the competent landlord, or, if those costs
exceed a prescribed amount, that prescribed amount.
10(3) In this section, “prescribed” means prescribed by, or determined in
accordance with, regulations made—
(a) in relation to England, by the Secretary of State;
(b) in relation to Wales, by the Welsh Ministers.
89G
15
Powers to require allocation of amounts paid under sections 89B to
89F
(1) The appropriate authority may by regulations provide for
circumstances in which, if the reversioner receives an amount under
section 89B or 89C (liability for costs arising under Chapter 1), the
20
reversioner is required to pay a proportion of that amount to one or
more of the other relevant landlords.
See section 9 for the meanings of “reversioner” and “other
relevant landlord”.
(2) The appropriate authority may by regulations provide for
25
circumstances in which, if the competent landlord receives an amount
under section 89E or 89F (liability for costs arising under Chapter 2),
the competent landlord is required to pay a proportion of that amount
to one or more of the other landlords.
See section 40 for the meanings of “competent landlord” and
“other landlord”.
30(3) Regulations under this section may make provision for the appropriate
tribunal to order payment.
(4) In this section, “appropriate authority” means—
(a) in relation to England, the Secretary of State;
(b) in relation to Wales, the Welsh Ministers.
3589H Security for costs under Chapters 1 and 2
(1) A lease, transfer, contract or other arrangement is of no effect to the
extent it requires a tenant or nominee purchaser to pay another person
an amount in anticipation of the tenant or nominee purchaser being
40
liable to a person in respect of their costs as a result of a claim under
Chapter 1 or 2.
41 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(2) The appropriate tribunal may, on the application of a person (the
“applicant”) to which a nominee purchaser in relation to a claim under
Chapter 1 may be liable by virtue of section 89D (leasebacks), order
the nominee purchaser to pay an amount—
5(a) to the applicant, or
(b) into the tribunal,
in anticipation of the nominee purchaser being so liable.”
(10) In Schedule 7, in paragraph 2(2) (terms of enfranchisement), omit the words
from “and in the absence” to “assurance)”.
10(11) In consequence of the amendments made by subsections (2) to (10)—
(a) in section 15(7) (appointment and replacement of nominee purchaser)—
(i) for the words from “he shall not be liable” to “but if” substitute
“and”;
(ii)
15
for “under section 33” substitute “as otherwise referred to in
section 89A”;
(b) in section 31(5) (designation for inheritance tax purposes), omit
paragraph (a);
(c) in the italic heading before section 32, omit “and costs of
enfranchisement”;
20(d) in section 52 (withdrawal from acquisition of new lease), omit
subsection (3);
(e) in section 74 (effect of estate management schemes on freehold claims),
omit subsection (4).
Jurisdiction of the county court and tribunals
2539 Replacement of sections 20 and 21 of the LRA 1967
For sections 20 and 21 of the LRA 1967 (jurisdiction of county court and
tribunals) substitute—
“20 Jurisdiction of the county court
(1)
30
Any jurisdiction conferred on the court by this Part is to be exercised
by the county court unless a contrary intention appears (and subject
to section 41 of the County Courts Act 1984).
(2) Proceedings for determining the amount of a sub-tenant’s share under
Schedule 2 in compensation payable to a tenant under section 17, or
35
for establishing or giving effect to a sub-tenant’s right to such a share,
are to be brought in the county court (but see section 21(8)).
21 Jurisdiction of tribunals
(1) The following matters are, in default of agreement, to be determined
by the appropriate tribunal—
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Part 2—Leasehold enfranchisement and extension

(a) whether a person is entitled to acquire the freehold or an
extended lease of a house and premises, or to what property
that right extends;
(b)
5
the price payable for a house and premises in accordance with
section 9 or an extended lease in accordance with section 14A;
(c) determining what provisions should be contained in a
conveyance in accordance with section 10 or 29(1), or in a lease
granting a new tenancy under section 14;
(d)
10
the amount of any compensation payable to a tenant under
section 17 for the loss of a house and premises;
(e) whether (and what) costs are payable under section 19B or
19C;
(f) the amount of any other costs payable by virtue of any
provision of Part 1;
15(g) the amount of the appropriate sum to be paid into the tribunal
under section 27(5);
(h) the amount of any compensation payable under section 27A;
(i) any matter arising under paragraph 12A of Schedule 1
20
(reduction of rent under intermediate leases on grant of an
extended lease), including what rent under an intermediate
lease is apportioned to the house and premises;
(j) whether a person is entitled to be paid a share of the market
value, and what share of the market value a person is entitled
25
to be paid, in accordance with Part 6 of Schedule 4 to the
Leasehold and Freehold Reform Act 2024;
(k) any matter arising under Schedule 10 to the Leasehold and
Freehold Reform Act 2024 (variation of lease to reduce rent to
peppercorn).
(2)
30
No application may be made to the appropriate tribunal under
subsection (1) to determine the price payable for a house and premises
or an extended lease unless—
(a) the landlord has informed the tenant of the price they are
asking, or
(b)
35
two months have elapsed without the landlord doing so since
the tenant gave notice of their desire to have the freehold or
extended lease under this Part.
(3) Where in connection with any acquisition by a tenant of the freehold
or an extended lease under this Part it is necessary to apportion
40
between the house and premises (or part of them) and other property
the rent payable under the immediate tenancy or any superior or
reversionary tenancy, the apportionment must be made by the
appropriate tribunal.
(4) Where the appropriate tribunal has determined that costs are payable
45
under section 19B or 19C or the amount of any other costs payable
by virtue of any provision of Part 1, it may make an order requiring
a person to pay those costs.
43 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(5) Where the appropriate tribunal has determined the amount of
compensation payable under section 27A, it may make an order
requiring the tenant concerned to pay that amount to the person
entitled to it.
5(6) In relation to paragraph 12A of Schedule 1—
(a) if the landlord under a qualifying intermediate lease cannot
be found or their identity cannot be ascertained, the appropriate
tribunal may make such order as it thinks fit, including—
(i)
10
an order dispensing with the requirement to give notice
under paragraph 12A(3) of Schedule 1 to that landlord,
or
(ii) an order that such a notice has effect and has been
properly served even though it has not been served on
that landlord;
15(b) the appropriate tribunal may make an order appointing a
person to vary a lease in accordance with paragraph 12A of
Schedule 1 on behalf of the landlord or tenant;
(c) if the appropriate tribunal makes a determination that a notice
20
under paragraph 12A(3) of Schedule 1 was of no effect, it
may—
(i) determine whether another landlord or tenant could
have given such a notice, and
(ii) if it determines that they could have done so, order that
25
paragraph 12A of Schedule 1 is to apply as if they had
done so.
(7) The variation of a lease on behalf of a party in consequence of an
order under subsection (6)(b) has the same force and effect (for all
purposes) as if it had been executed by that party.
(8)
30
The appropriate tribunal has jurisdiction, either by agreement or in a
case where an application is made to the tribunal under subsection
(1) with reference to the same transaction, to determine the amount
of a sub-tenant’s share under Schedule 2 in compensation payable to
a tenant under section 17.
(9)
35
For the purposes of this Part a matter is to be treated as determined
by (or on appeal from) the appropriate tribunal—
(a) if the decision on the matter is not appealed against, at the end
of the period for bringing an appeal, or
(b) if that decision is appealed against, at the time when the appeal
is disposed of.
40(10) An appeal is disposed of—
(a) if it is determined and the period for bringing any further
appeal has ended, or
(b) if it is abandoned or otherwise ceases to have effect.
Leasehold and Freehold Reform Bill 44
Part 2—Leasehold enfranchisement and extension

(11) See section 43 of the Leasehold and Freehold Reform Act 2024, which
restricts the first-instance jurisdiction of the High Court in respect of
tribunal matters.
21A Jurisdiction for other proceedings
5(1) This section applies to proceedings—
(a) relating to the performance or discharge of obligations arising
out of a tenant’s notice of their desire to have the freehold or
an extended lease under this Part, and
(b)
10
for which jurisdiction has not otherwise been conferred under
or by virtue of this Part.
(2) Jurisdiction is conferred on the appropriate tribunal for proceedings
to which this section applies.
(3) But jurisdiction is instead conferred on the court where a purpose of
15
the proceedings is to obtain a remedy that could not be granted by
the appropriate tribunal but could be granted by the court.
(4) If, in proceedings before the court to which this section applies, it
appears to the court that—
(a) the remedy (or remedies) sought could be granted by the
20
appropriate tribunal, it must by order transfer the proceedings
to the appropriate tribunal;
(b) a remedy sought could be granted by the appropriate tribunal
and another remedy sought could only be granted by the court,
it may by order transfer the proceedings to the appropriate
25
tribunal insofar as the proceedings relate to the remedy that
could be granted by the appropriate tribunal.
(5) Following a transfer of proceedings under subsection (4)(b)—
(a) the court may dispose of all or any remaining proceedings
pending the determination of the transferred proceedings by
the appropriate tribunal,
30(b) the appropriate tribunal may determine the transferred
proceedings, and
(c) when the appropriate tribunal has done so, the court may give
effect to the determination in an order of the court.
(6)
35
Rules of court may prescribe the procedure to be followed in a court
in connection with or in consequence of a transfer under this section.
(7) A reference in this Part to the jurisdiction conferred on the appropriate
tribunal or the court includes that conferred by this section.
(8) This section does not prevent the bringing of proceedings in a court
40
other than the county court where the claim is for damages or
pecuniary compensation only.
45 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

21B Power to order compliance
(1) The court or appropriate tribunal may, on the application of any person
interested, make an order requiring any person who has failed to
5
comply with any requirement imposed on them under or by virtue
of any provision of this Part to make good the default within such
time as is specified in the order.
(2) An application may not be made under subsection (1) unless—
(a) a notice has been previously given to the person in question
requiring them to make good the default, and
10(b) more than 14 days have elapsed since the date of the giving
of that notice without their having done so.
(3) An application may not be made under subsection (1) to the court
unless the application relates to proceedings in respect of which the
15
court has jurisdiction under or by virtue of any provision of this Part
(including section 21A).
(4) Where an order other than an order to pay a sum of money has been
made under subsection (1) by the appropriate tribunal—
(a) a person may apply to the court for enforcement of the order;
(b)
20
the appropriate tribunal may by order transfer proceedings to
the court for enforcement of the order,
and the order is to be enforceable by the court in the same way as an
order of the court.
(5) See section 176C of the Commonhold and Leasehold Reform Act 2002
25
for general provision about the enforcement of tribunal decisions and
section 27 of the Tribunals, Courts and Enforcement Act 2007 for
provision about the enforcement of an order to pay a sum of money.
21C Power relating to completion of Part 1 claims
(1) This section applies where—
(a)
30
all of the terms related to a conveyance or grant of a lease
under this Part, including the price and other sums payable
under this Part or section 36 of the Leasehold and Freehold
Reform Act 2024, have been agreed between the tenant and
the landlord or determined by the appropriate tribunal,
(b)
35
the time fixed for the completion of the conveyance or grant
of the lease has passed without that completion or grant taking
place,
(c) the completion or grant has not taken place because—
(i) a party to the transaction has failed to execute the
conveyance or lease, or
40(ii) the tenant has failed to pay the price and other sums
payable, and
(d) that failure is in breach of an obligation arising under this Part;
Leasehold and Freehold Reform Bill 46
Part 2—Leasehold enfranchisement and extension

and the fact that any matter dealt with in Part 6 of Schedule 4 to the
Leasehold and Freehold Reform Act 2024 has not been determined
does not stop this section from applying.
(2)
5
Where this section applies, the appropriate tribunal may, on the
application of the tenant or the landlord, make an order—
(a) appointing a person to execute the conveyance or lease on
behalf of a party to the transaction;
(b) requiring the tenant to pay the price and other sums payable
into the tribunal or to a person specified in the order.
10(3) A conveyance or lease executed on behalf of a party in consequence
of an order under this section has the same force and effect (for all
purposes) as if it had been executed by that party.
(4) This section does not prevent a party to a transaction seeking other
remedies in connection with a breach of an obligation.”
1540 References to “the court” in Part 1 of the LRA 1967
(1) The LRA 1967 is amended as follows.
(2) In the following provisions, for “the court” substitute “the appropriate tribunal”
in each place it occurs—
(a) section 2;
20(b) section 27;
(c) in Schedule 1—
(i) paragraph 3;
(ii) paragraph 4;
(d) in Schedule 3—
25(i) paragraph 6(3);
(ii) paragraph 7(5);
(e) in Schedule 4A—
(i) paragraph 3(3);
(ii) paragraph 3A(3);
30(iii) paragraph 4A(6).
(3) In the following provisions, for “into court” substitute “into the tribunal” in
each place it occurs—
(a) sections 11 to 13, including the heading of section 13;
(b) section 27;
35(c) in Schedule 1, paragraph 4(3)(c).
(4) In the following provisions, after “court” insert “or tribunal”—
(a) section 5(7);
(b) section 13(3)(b);
(c) section 37(7);
40(d) in Schedule 3, paragraph 5, in both places it occurs.
47 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(5) In section 11(5), for “in court” substitute “in the tribunal”.
(6) In section 13(3), in the words after paragraph (b)—
(a) after “a court” insert “or tribunal”;
(b) omit “other than the county court”;
5(c) after “the court” insert “or tribunal”.
(7) In section 27A(7)(b)—
(a) after “the court” insert “or the appropriate tribunal”;
(b) after “court order” insert “or order of a tribunal”.
41 Amendment of Part 1 of the LRHUDA 1993
10(1) The LRHUDA 1993 is amended as follows.
(2) After section 27 insert—
“27A Power relating to completion of Chapter 1 claims
(1) This section applies where—
(a)
15
the completion of a conveyance has not taken place in
accordance with the terms of a binding contract entered into
in pursuance of an initial notice because—
(i) a party to the transaction has failed to execute the
conveyance, or
(ii)
20
the nominee purchaser has failed to pay the price and
other sums payable or due under the contract, and
(b) that failure is in breach of an obligation arising under the
contract.
(2) Where this section applies, the appropriate tribunal may, on the
25
application of the nominee purchaser or the reversioner, make an
order—
(a) appointing a person to execute the conveyance on behalf of a
party to the transaction;
(b) requiring the nominee purchaser to pay the price and other
30
sums payable or due under the contract into the tribunal or to
a person specified in the order.
(3) A conveyance executed on behalf of a party in consequence of an
order under this section has the same force and effect (for all purposes)
as if it had been executed by that party.
(4)
35
This section does not prevent a party to a transaction seeking other
remedies in connection with a breach of an obligation.”
(3) In section 48 (applications where terms in dispute or failure to enter into new
lease)—
(a) after subsection (3) insert—
“(3A) An order under subsection (3) may—
Leasehold and Freehold Reform Bill 48
Part 2—Leasehold enfranchisement and extension

(a) appoint a person to execute the new lease on behalf of
a party to the transaction;
(b) require that the price and other sums payable are paid
into the tribunal or to a person specified in the order.
5A lease executed on behalf of a party to a transaction in
consequence of an order under subsection (3) has the same
force and effect (for all purposes) as if it had been executed by
that party.”;
(b)
10
in subsection (4), for “Any such order” substitute “An order under
subsection (3)”.
(4) In section 49 (applications where landlord fails to give counter-notice or
further counter-notice)—
(a) after subsection (4) insert—
“(4A) An order under subsection (4) may—
15(a) appoint a person to execute the new lease on behalf of
a party to the transaction;
(b) require that the price and other sums payable are paid
into the tribunal or to a person specified in the order.
20
A lease executed on behalf of a party to a transaction in
consequence of an order under subsection (4) has the same
force and effect (for all purposes) as if it had been executed by
that party.”;
(b) in subsection (5), for “Any such order” substitute “An order under
subsection (4)”.
25(5) In section 90 (jurisdiction of county courts)—
(a) omit subsection (2);
(b) in subsection (3), for “or (2)” substitute “or section 91A”;
(c) omit subsection (4).
(6) For section 91 (jurisdiction of tribunals) substitute—
30“91 Jurisdiction of tribunals
(1) Any question arising in relation to any of the following matters is, in
default of agreement, to be determined by the appropriate tribunal—
(a) the terms of acquisition relating to—
(i)
35
any interest which is to be acquired by a nominee
purchaser in pursuance of Chapter 1, or
(ii) any new lease which is to be granted to a tenant in
pursuance of Chapter 2,
including in particular any matter which needs to be
40
determined in accordance with section 36 of, or Schedule 4 to,
the Leasehold and Freehold Reform Act 2024;
(b) the terms of any lease which is to be granted in accordance
with section 36 and Schedule 9;
49 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(c) the amount of any payment falling to be made by virtue of
section 18(2);
(d) the amount of any compensation payable under section 37A
or 61A;
5(e) the amount of any costs payable by virtue of any provision of
Chapter 1 or 2;
(f) the apportionment between two or more persons of any amount
(whether of costs or otherwise) payable by virtue of any such
provision;
10(g) whether (and what) costs are payable under any of sections
89B to 89F;
(h) the terms on which a lease is to be severed under paragraph
7 of Schedule A1;
(i)
15
any matter arising under paragraph 12 of Schedule 11
(reduction of rent under intermediate leases on grant of a new
lease), including what rent under an intermediate lease is
apportioned to the flat;
(j) whether a person is entitled to be paid a share of the market
20
value, and what share of the market value a person is entitled
to be paid, in accordance with Part 6 of Schedule 4 to the
Leasehold and Freehold Reform Act 2024;
(k) any matter arising under Schedule 10 to the Leasehold and
Freehold Reform Act 2024 (variation of lease to reduce rent to
peppercorn).
25(2) Where in connection with—
(a) any exercise of the right to collective enfranchisement under
Chapter 1, or
(b) any acquisition of a new lease under Chapter 2,
30
it is necessary to apportion the rent payable under a tenancy (whether
immediate, superior or reversionary), the apportionment must be made
by the appropriate tribunal.
(3) The appropriate tribunal may, when determining the property in which
any interest is to be acquired in pursuance of a notice under section
35
13 or 42, specify in its determination property which is less extensive
than that specified in that notice.
(4) Where the appropriate tribunal has determined the amount of
compensation payable under section 37A or 61A, it may make an order
requiring the tenant concerned to pay that amount to the person
entitled to it.
40(5) Where the appropriate tribunal has determined the amount of any
costs payable by virtue of any provision of Chapter 1 or 2 or that costs
are payable under any of sections 89B to 89F, it may make an order
requiring a person to pay those costs.
(6) In relation to paragraph 12 of Schedule 11—
Leasehold and Freehold Reform Bill 50
Part 2—Leasehold enfranchisement and extension

(a) if the landlord under a qualifying intermediate lease cannot
be found or their identity cannot be ascertained, the appropriate
tribunal may make such order as it thinks fit, including—
(i)
5
an order dispensing with the requirement to give notice
under paragraph 12(3) of Schedule 11 to that landlord,
or
(ii) an order that such a notice has effect and has been
properly served even though it has not been served on
that landlord;
10(b) the appropriate tribunal may make an order appointing a
person to vary a lease in accordance with paragraph 12 of
Schedule 11 on behalf of the landlord or tenant;
(c) if the appropriate tribunal makes a determination that a notice
under paragraph 12(3) of Schedule 11 was of no effect, it may—
15(i) determine whether another landlord or tenant could
have given such a notice, and
(ii) if it determines that they could have done so, order that
paragraph 12 of Schedule 11 is to apply as if they had
done so.
20(7) The variation of a lease on behalf of a party in consequence of an
order under subsection (6)(b) has the same force and effect (for all
purposes) as if it had been executed by that party.
(8) In this section—
“nominee purchaser” has the same meaning as in Chapter 1;
25“terms of acquisition” is to be construed in accordance with
section 24(8) or section 48(7), as appropriate.
(9) For the purposes of this Chapter “appropriate tribunal” means—
(a) in relation to property in England, the First-tier Tribunal or,
30
where determined by or under Tribunal Procedure Rules, the
Upper Tribunal;
(b) in relation to property in Wales, a leasehold valuation tribunal.
(10) See section 43 of the Leasehold and Freehold Reform Act 2024, which
restricts the first-instance jurisdiction of the High Court in respect of
tribunal matters.
3591A Jurisdiction for other proceedings
(1) This section applies to proceedings—
(a) in relation to any matter arising under or by virtue of Chapter
1 or 2 or this Chapter, and
(b)
40
for which jurisdiction has not otherwise been conferred under
or by virtue of this Act.
(2) Jurisdiction is conferred on the appropriate tribunal for proceedings
to which this section applies.
51 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(3) But jurisdiction is instead conferred on the court where a purpose of
the proceedings is to obtain a remedy that could not be granted by
the appropriate tribunal but could be granted by the court.
(4)
5
If, in proceedings before the court to which this section applies, it
appears to the court that—
(a) the remedy (or remedies) sought could be granted by the
appropriate tribunal, it must by order transfer the proceedings
to the appropriate tribunal;
(b)
10
a remedy sought could be granted by the appropriate tribunal
and another remedy sought could only be granted by the court,
it may by order transfer the proceedings to the appropriate
tribunal insofar as the proceedings relate to the remedy that
could be granted by the appropriate tribunal.
(5) Following a transfer of proceedings under subsection (4)(b)—
15(a) the court may dispose of all or any remaining proceedings
pending the determination of the transferred proceedings by
the appropriate tribunal,
(b) the appropriate tribunal may determine the transferred
proceedings, and
20(c) when the appropriate tribunal has done so, the court may give
effect to the determination in an order of the court.
(6) Rules of court may prescribe the procedure to be followed in a court
in connection with or in consequence of a transfer under this section.
(7)
25
A reference in Chapter 1 or 2 or this Chapter to the jurisdiction
conferred on the appropriate tribunal or the court includes that
conferred by this section.”
(7) In section 92 (enforcement of obligations under Chapters 1 and 2)—
(a) in the heading, for “Enforcement of” substitute “Power to order
compliance with”;
30(b) in subsection (1), after “The court” insert “or appropriate tribunal”;
(c) after subsection (2) insert—
“(3) An application may not be made under subsection (1) to the
court unless the application relates to proceedings in respect
35
of which the court has jurisdiction under or by virtue of any
provision of Chapter 1, 2 or 7 (including section 91A).
(4) Where an order other than an order to pay a sum of money
has been made under subsection (1) by the appropriate
tribunal—
(a)
40
a person may apply to the court for enforcement of the
order;
(b) the appropriate tribunal may by order transfer
proceedings to the court for enforcement of the order,
Leasehold and Freehold Reform Bill 52
Part 2—Leasehold enfranchisement and extension

and the order is to be enforceable by the court in the same way
as an order of the court.
(5) See section 176C of the Commonhold and Leasehold Reform
5
Act 2002 for general provision about the enforcement of tribunal
decisions and section 27 of the Tribunals, Courts and
Enforcement Act 2007 for provision about the enforcement of
an order to pay a sum of money.”.
42 References to “the court” in Part 1 of the LRHUDA 1993
(1) The LRHUDA 1993 is amended as follows.
10(2) In the following provisions, for “the court” substitute “the appropriate tribunal”
in each place it occurs—
(a) sections 22 to 27;
(b) sections 46 to 51;
(c) section 74(3)(c);
15(d) in Schedule 1—
(i) paragraphs 2 to 5;
(ii) paragraphs 5B to 5E;
(iii) paragraph 6(3);
(e) in Schedule 3, paragraph 15(2);
20(f) in Schedule 5—
(i) paragraph 1(1);
(ii) paragraph 2(1);
(g) in Schedule 11, paragraph 6(3);
(h) in Schedule 12, paragraph 9(2).
25(3) In the following provisions, for “into court” substitute “into the tribunal” in
each place it occurs—
(a) section 27;
(b) section 51;
(c) in Schedule 1, paragraph 6(3)(c);
30(d) in Schedule 5, paragraphs 2 to 4, including the heading of paragraph
4;
(e) in Schedule 8, paragraphs 2 and 4, including the heading of paragraph
4.
(4) In section 19(6), after “any court” insert “or tribunal”.
35(5) In section 26(9), for “Rules of court” substitute “Tribunal Procedure Rules,
and regulations under Schedule 12 to the Commonhold and Leasehold Reform
Act 2002 (leasehold valuation tribunals: procedure),”.
(6) In section 37A(8)(b)—
(a) after “the court” insert “or the appropriate tribunal”;
40(b) after “court order” insert “or order of a tribunal”.
53 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(7) In section 61A(7)(b)—
(a) after “the court” insert “or the appropriate tribunal”;
(b) after “court order” insert “or order of a tribunal”.
(8)
5
In section 101(9), in the words before paragraph (a), after “a decision” insert
“or order”.
(9) In Schedule 1, in paragraph 6(2), in the words after paragraph (b), for “the
court” substitute “the appropriate tribunal”.
(10) In Schedule 3—
(a)
10
in paragraph 10(1)(d)(ii), after “the court” insert “or the appropriate
tribunal”;
(b) in paragraph 10(2), after “a court” insert “or tribunal”.
(11) In Schedule 8, in paragraph 4(3)—
(a) in paragraph (b), after “any court” insert “or tribunal”;
(b) in the words after paragraph (b)—
15(i) after “a court” insert “or tribunal”;
(ii) omit “other than the county court”;
(iii) after “the court” insert “or tribunal”.
(12) In Schedule 11, in paragraph 6(1), in the words after paragraph (c), for “the
court” substitute “the appropriate tribunal”.
20(13) In Schedule 12—
(a) in paragraph 8(1)(c)(ii), after “the court” insert “or the appropriate
tribunal”;
(b) in paragraph 8(2), after “a court” insert “or tribunal”.
(14) In the headings before sections 22 and 46, omit “court or”.
25Jurisdiction of the High Court
43 No first-instance applications to the High Court in tribunal matters
(1) Where jurisdiction in respect of a matter is conferred on the appropriate
tribunal exclusively under the LRA 1967 or a specified provision of the
30
LRHUDA 1993, a person may not apply to the High Court in respect of that
matter.
(2) Subsection (1) has no effect in relation to any proceedings that may be brought
in the High Court for the purpose of challenging a decision, declaration,
direction or order of the appropriate tribunal.
(3) The specified provisions of the LRHUDA 1993 are—
35(a) Chapters 1, 2, 4 and 7 of Part 1;
(b) section 88.
(4) In subsection (1) “appropriate tribunal” has the same meaning as in the LRA
1967 or the specified provision of the LRHUDA 1993 (whichever is relevant).
Leasehold and Freehold Reform Bill 54
Part 2—Leasehold enfranchisement and extension

(5) For the purposes of this section, jurisdiction in respect of a matter is conferred
on the appropriate tribunal exclusively where—
(a) a provision of the LRA 1967 or the LRHUDA 1993 provides for the
5
matter to be determined by the appropriate tribunal alone (and not
by a court or the appropriate tribunal), or
(b) proceedings in respect of the matter fall within the jurisdiction of the
appropriate tribunal by virtue of section 21A of the LRA 1967 or section
91A of the LRHUDA 1993.
Enfranchisement and extension: miscellaneous amendments
1044 Miscellaneous amendments
Schedule 8 contains miscellaneous further amendments to existing legislation
relating to enfranchisement and extension.
Preservation of existing law for certain purposes
45 LRA 1967: preservation of existing law for certain enfranchisements
15After section 7 of the LRA 1967 insert—
“7A Tenant’s right to choose that pre-2024 Act law is to apply to freehold
acquisition
(1) The tenant of a leasehold house may choose that this Act is to have
20
effect in relation to the acquisition of the freehold of the house and
premises without the amendments made by the Leasehold and
Freehold Reform Act 2024, if the house and premises would be valued
under section 9(1) (as it would have effect without those amendments).
(2) If—
(a)
25
a person makes a claim to acquire a freehold under the
preserved law, and
(b) as a result of that claim, further notices by that person are void
by virtue of a statutory bar under the preserved law,
only further notices making claims under the preserved law are void
by virtue of that statutory bar.
30(3) In subsection (2)—
“preserved law” means this Part as it has effect (by virtue of
subsection (1)) without the amendments made by the Leasehold
and Freehold Reform Act 2024;
“statutory bar” means—
35(a) section 9(3)(b), or
(b) an order under section 20(6) or paragraph 4(3) of
Schedule 3.
(4) Subsection (1) does not apply in any of the following cases—
55 Leasehold and Freehold Reform Bill
Part 2—Leasehold enfranchisement and extension

(a) the tenancy was created by the grant of a lease under Part 5
of the Housing Act 1985 (a “right to buy lease”);
(b) the tenancy is, by virtue of section 3(3), treated as a single
5
tenancy with a tenancy created by the grant of a right to buy
lease;
(c) the tenancy is a sub-tenancy directly or indirectly derived out
of a tenancy falling within paragraph (a) or (b);
(d) the tenancy was granted under this Part in substitution for a
tenancy or sub-tenancy falling within paragraph (a), (b) or (c).”
10Consequential amendments to other legislation
46 Part 2: consequential amendments to other legislation
Schedule 9 contains amendments to other legislation that are consequential
on this Part.
PART 3
15OTHER RIGHTS OF LONG LEASEHOLDERS
New right to replace rent with peppercorn rent
47 Right to vary long lease to replace rent with peppercorn rent
Schedule 10 confers on certain leaseholders the right to a variation of their
20
leases so that the whole or part of the rent payable becomes and will remain
a peppercorn rent.
The right to manage
48 Change of non-residential limit on right to manage claims
In Schedule 6 to the Commonhold and Leasehold Reform Act 2002 (“the
25
CLRA 2002”), in paragraph 1(1) (non-residential limit on right to manage
claims), for “25 per cent.” substitute “50%”.
49 Costs of right to manage claims
(1) The CLRA 2002 is amended as follows.
(2) In section 82 (right to obtain information before right to manage claim)—
(a) in subsection (2)(b), omit “on payment of a reasonable fee”;
30(b) after subsection (3) insert—
“(4) The RTM company is liable for the reasonable costs incurred
by a person in complying (in accordance with this section) with
a notice under this section.
Leasehold and Freehold Reform Bill 56
Part 3—Other rights of long leaseholders

(5) Any question arising in relation to the amount of the costs
payable by the RTM company is, in default of agreement, to
be determined by the appropriate tribunal.”
(3) After section 87 insert—
5“87A Costs: general
(1) An RTM company and a member of an RTM company are not liable
for any costs incurred by any other person in consequence of a claim
notice given by the company in relation to any premises, except as
set out in this section.
10(2) A lease, transfer, contract or other arrangement is accordingly of no
effect to the extent it would provide to the contrary.
(3) An RTM company is liable to a member of the company in respect of
costs incurred by the member to the extent agreed between the
company and the member.
15(4) A member of an RTM company—
(a) is liable to the company in respect of costs incurred by the
company to the extent agreed between the member and the
company;
(b)
20
is liable to another member of the company in respect of costs
incurred by that other member to the extent agreed between
the two members.
(5) An RTM company or a member of an RTM company are liable for
costs incurred by another person in connection with proceedings before
a court or tribunal if—
25(a) the court or tribunal has power under another enactment to
order that they pay those costs, and
(b) the court or tribunal makes such an order.
(6) An RTM company and a member of an RTM company are liable for
30
costs incurred by another person in the circumstances referred to in
section 87B.
(7) For the purposes of this section, “member”, in relation to an RTM
company, means each person who is or has been a member of the
RTM company.
(8)
35
See also sections 20CA and 20J of the Landlord and Tenant Act 1985,
which prevent costs in connection with a claim under this Chapter
being recovered by way of a variable service charge (within the
meaning of section 18 of that Act).
87B Power of tribunal to order costs where claim ceases
(1)
40
The appropriate tribunal may, on the application of a person (“the
1
applicant”) that incurs costs in consequence of a claim notice given
57 Leasehold and Freehold Reform Bill
Part 3—Other rights of long leaseholders

by an RTM company, order that the RTM company is liable to the
applicant for the costs if all of the conditions in subsection (2) are met.
(2) The conditions are—
(a) the claim notice—
5(i) is at any time withdrawn or deemed to be withdrawn
by virtue of any provision of this Chapter, or
(ii) at any time ceases to have effect by reason of any other
provision of this Chapter;
(b) the RTM company acts unreasonably in—
10(i) giving the claim notice, or
(ii) not withdrawing it, causing it to be deemed withdrawn,
or causing it to cease to have effect sooner;
(c) the applicant is—
(i)
15
a landlord under a lease of the whole or any part of
the premises,
(ii) party to such a lease otherwise than as landlord or
tenant, or
(iii) a manager appointed under Part 2 of the 1987 Act to
20
act in relation to the premises, or any premises
containing or contained in the premises;
(d) the costs are incurred before the claim notice is withdrawn, is
deemed withdrawn, or ceases to have effect;
(e) the costs are incurred other than in connection with proceedings
before a court or tribunal;
25(f) the costs are reasonably incurred.
(3) Where the appropriate tribunal orders that an RTM company is liable
under subsection (1), each person who is or has been a member of the
RTM company is also liable (jointly and severally with the RTM
company and each other such person).
30(4) But a person is not liable if—
(a) the lease by virtue of which they were a qualifying tenant has
been assigned to another person, and
(b) that other person has become a member of the RTM company.
(5) The reference in subsection (4) to an assignment includes—
35(a) an assent by personal representatives, and
(b) assignment by operation of law where the assignment is to a
trustee in bankruptcy or to a mortgagee under section 89(2) of
the Law of Property Act 1925 (foreclosure of leasehold
mortgage).”
40(4) Omit sections 88 and 89 (costs of right to manage claims).
Leasehold and Freehold Reform Bill 58
Part 3—Other rights of long leaseholders

50 Compliance with obligations arising under Chapter 1 of Part 2 of the CLRA
2002
(1) Section 107 of the CLRA 2002 (enforcement of obligations) is amended as
follows.
5(2) In subsection (1), for “county court” substitute “appropriate tribunal”.
(3) After subsection (2) insert—
“(3) Where an order other than an order to pay a sum of money has been
made under subsection (1) by the appropriate tribunal—
(a)
10
a person may apply to the county court for enforcement of the
order;
(b) the appropriate tribunal may by order transfer proceedings to
the county court for enforcement of the order;
and the order is to be enforceable by the court in the same way as an
order of the court.
15(4) See section 176C for general provision about the enforcement of
tribunal decisions and section 27 of the Tribunals, Courts and
Enforcement Act 2007 for provision about the enforcement of an order
to pay a sum of money.”
(4) For the heading substitute “Power of tribunal to order compliance”.
2051 No first-instance applications to the High Court in tribunal matters
(1) Where jurisdiction in respect of a matter is conferred on the appropriate
tribunal under Chapter 1 of Part 2 of the CLRA 2002, a person may not apply
to the High Court in respect of that matter.
(2)
25
Subsection (1) has no effect in relation to any proceedings that may be brought
in the High Court for the purpose of challenging a decision, declaration,
direction or order of the appropriate tribunal.
(3) In subsection (1) “appropriate tribunal” has the same meaning as in the
Chapter mentioned in that subsection.
PART 4
30REGULATION OF LEASEHOLD
Service charges
52 Extension of regulation to fixed service charges
(1) The Landlord and Tenant Act 1985 (“the LTA 1985”) is amended in accordance
with subsections (2) to (6).
35(2) In section 18 (meaning of “service charge” and “relevant costs”)—
59 Leasehold and Freehold Reform Bill
Part 4—Regulation of leasehold

(a) in the heading, after ““service charge”” insert “, “variable service
charge””;
(b) for subsections (1) and (2) substitute—
“(1) In the following provisions of this Act—
5“service charge” means an amount payable by a tenant of
a dwelling, as part of or in addition to the rent, which
is payable, directly or indirectly, for the purpose of
meeting, or contributing towards, the relevant costs;
10
“variable service charge” means a service charge the whole
or part of which varies or may vary according to the
relevant costs.
(2) The “relevant costs” are the costs or estimated costs incurred
or to be incurred by or on behalf of the landlord, or a superior
15
landlord, in connection with services, repairs, maintenance,
improvements or insurance or the landlord’s costs of
management.”;
(c) in subsection (3)(b), for “a service charge” substitute “a variable service
charge”.
(3) In the provisions referred to in subsection (4)—
20(a) for “service charge” substitute “variable service charge”;
(b) for “service charges” substitute “variable service charges”.
(4) The provisions are—
(a) in section 19 (reasonableness of service charges), the heading and
subsections (1) and (2);
25(b) in section 20 (consultation requirements), the heading and subsection
(2);
(c) in section 20A (grant-aided works), the heading and subsections (1)
and (2);
(d)
30
in section 20B (time limit on making demands), the heading and
subsection (1) in the first place “service charge” occurs;
(e) in section 20D (remediation works), the heading and subsections (4)
and (5);
(f) in section 20F (excluded costs for higher-risk buildings), the heading
and subsection (2);
35(g) in section 30D (liability for building safety costs), subsection (2)(a)(ii);
(h) in section 30E (liability for remuneration), subsection (1)(c).
(5) In section 30E(3), for ““service charge” has the meaning” substitute ““service
charge” and “variable service charge” have the meaning”.
(6) In section 39 (index of defined expressions), at the end insert—
40section 18(1)”. 40 “variable service charge
Leasehold and Freehold Reform Bill 60
Part 4—Regulation of leasehold

(7) The Landlord and Tenant Act 1987 (“the LTA 1987”) is amended in accordance
with subsections (8) to (10).
(8) In the provisions referred to in subsection (9), in each place they occur—
(a) for “service charge” substitute “variable service charge”;
5(b) for “service charges” substitute “variable service charges”.
(9) The provisions are—
(a) in section 24 (appointment of manager by tribunal), subsections (2)
and (2A);
(b)
10
in section 35 (application by party to lease for variation of lease),
subsections (2) and (4);
(c) in section 42 (service charge contributions to be held in trust), the
heading and subsections (1), (2), (3), (4), (6), and (8).
(10) In section 35(8), for ““service charge” has the meaning” substitute ““service
charge” and “variable service charge” have the meaning”.
15(11) In section 167 of the CLRA 2002 (failure to pay small amount for short
period)—
(a) in subsection (1), for “service charges” substitute “variable service
charges”;
(b)
20
in subsection (5), for “service charge” substitute “variable service
charge”.
53 Notice of future service charge demands
In section 20B of the LTA 1985 (time limit on making service charge demands),
in subsection (2), for the words from “notified in writing” to the end substitute
“given a future demand notice in respect of those costs.
25(3) A “future demand notice” is a notice in writing that—
(a) relevant costs have been incurred, and
(b) the tenant will subsequently be required under the terms of
the lease to contribute to the costs by the payment of a variable
service charge.
30(4) A future demand notice must—
(a) be in the specified form,
(b) contain the specified information, and
(c) be given to the tenant in a specified manner.
35
“Specified” means specified in regulations made by the appropriate
authority.
(5) The regulations may, among other things, specify as information to
be contained in a future demand notice—
(a) an amount estimated as the amount of the costs incurred (an
“estimated costs amount”);
40(b) an amount which the tenant is expected to be required to
contribute to the costs (an “expected contribution”);
61 Leasehold and Freehold Reform Bill
Part 4—Regulation of leasehold

(c) a date on or before which it is expected that payment of the
variable service charge will be demanded (an “expected demand
date”).
(6)
5
Regulations that include provision by virtue of subsection (5) may
also provide for a relevant rule to apply in a case where—
(a) the tenant has been given a future demand notice in respect
of relevant costs, and
(b) a demand for payment of a variable service charge as a
10
contribution to those costs is served on the tenant more than
18 months after the costs were incurred.
(7) The relevant rules are—
(a) in a case where a future demand notice is required to contain
an estimated costs amount, that the tenant is liable to pay the
15
service charge only to the extent it reflects relevant costs that
do not exceed the estimated costs amount;
(b) in a case where a future demand notice is required to contain
an expected contribution, that the tenant is liable to pay the
service charge only to the extent it does not exceed the expected
contribution;
20(c) in a case where a future demand notice is required to contain
an expected demand date, that, if the demand is served after
the expected demand date, the tenant is not liable to pay the
service charge to the extent it reflects any of the costs.
(8)
25
Regulations that provide for the relevant rule in subsection (7)(c) to
apply may also provide that, in a case set out in the regulations, the
rule is to apply as if, for the expected demand date, there were
substituted a later date determined in accordance with the regulations.
(9) Regulations under this section—
(a) are to be made by statutory instrument;
30(b) may make provision generally or only in relation to specific
cases;
(c) may make different provision for different purposes;
(d) may include supplementary, incidental, transitional or saving
provision.
35(10) A statutory instrument containing regulations under this section is
subject to the negative procedure.”
54 Service charge demands
(1) The LTA 1985 is amended in accordance with subsections (2) and (3).
(2) Omit the following sections—
40(a) section 21 (request for summary of relevant costs);
(b) section 21A (withholding of service charges);
(c) section 21B (notice to accompany demands for service charges).
Leasehold and Freehold Reform Bill 62
Part 4—Regulation of leasehold

(3) Before section 22 insert—
“21C Service charge demands
(1) A landlord may not demand the payment of a service charge unless
the demand—
5(a) is in the specified form,
(b) contains the specified information, and
(c) is provided to the tenant in a specified manner.
“Specified” means specified in regulations made by the appropriate
authority.
10(2) Accordingly, where a demand for payment of a service charge does
not comply with subsection (1), a provision of the lease relating to
non-payment or late payment of service charges does not have effect
in relation to the service charge.
(3)
15
The appropriate authority may by regulations provide for exceptions
from subsection (1) by reference to—
(a) descriptions of landlord;
(b) descriptions of service charge;
(c) any other matter.
(4) Regulations under this section—
20(a) are to be made by statutory instrument;
(b) may make provision generally or only in relation to specific
cases;
(c) may make different provision for different purposes;
(d)
25
may include supplementary, incidental, transitional or saving
provision.
(5) A statutory instrument containing regulations under this section is
subject to the negative procedure.”
(4) In the LTA 1987—
(a)
30
in section 47 (landlord’s name and address to be contained in demands
for rent etc), after subsection (3) insert—
“(3A) Subsections (2) and (3) do not apply in relation to a written
demand for payment of a service charge if section 21C of the
Landlord and Tenant Act 1985 requires the demand to include
35
information which subsection (1) also requires the demand to
include.”;
(b) in section 47A (building safety information to be contained in demands
for rent etc), after subsection (3) insert—
“(3A) Subsections (2) and (3) do not apply in relation to a written
40
demand for payment of a service charge if section 21C of the
Landlord and Tenant Act 1985 requires the demand to include
information which subsection (1) also requires the demand to
include.”
63 Leasehold and Freehold Reform Bill
Part 4—Regulation of leasehold

55 Accounts and annual reports
(1) The LTA 1985 is amended as follows.
(2) After section 21C (as inserted by section 54) insert—
“21D Service charge accounts
5(1) This section applies in relation to a lease of a dwelling if—
(a) a variable service charge is or may be payable under the lease,
and
(b) any of the relevant costs which are or may be taken into
10
account in determining the amount of that variable service
charge are or may be taken into account in determining the
amount of variable service charges payable by the tenants of
three or more other dwellings (“connected tenants”).
(2) The following terms are implied into the lease—
(a)
15
that, on or before the account date for each accounting period,
the landlord must provide the tenant with a written statement
of account in a specified form and manner setting out—
(i) the variable service charges arising in the period which
are payable by the tenant and each connected tenant,
(ii) the relevant costs relating to those service charges, and
20(iii) any other specified matters;
(b) that, on or before the account date for an accounting period in
respect of which a statement of account is provided, the
landlord must provide the tenant with a written report about
the statement prepared by a qualified accountant, which—
25(i) is prepared in accordance with specified standards for
the review of financial information, and
(ii) includes a statement by the accountant, in a specified
form and manner, that the report is a faithful
representation of what it purports to represent;
30(c) that the landlord must provide adequate accounts, receipts or
other documents or explanations to the accountant to enable
them to provide the report;
(d) that, if the landlord incurs costs in obtaining the report, the
35
tenant must pay the landlord a fair and reasonable contribution
to those costs.
“Specified” means specified in regulations made by the appropriate
authority.
(3) An “accounting period” is—
(a)
40
a period of 12 months specified in the lease as an accounting
period, or
(b) if no such period is specified in the lease, a period of 12 months
beginning with 1 April.
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(4) The “account date” for an accounting period is the final day of the
period of six months beginning with the day after the final day of the
accounting period.
(5) An amount payable under the term implied by subsection (2)(d)—
5(a) is a variable service charge for the purposes of section 18, and
the provisions of this Act relating to service charges apply
accordingly;
(b) is payable irrespective of whether a lease, contract or other
arrangement provides for it to be payable as a service charge.
10(6) The appropriate authority may by regulations provide for
circumstances in which a term in subsection (2)—
(a) is not to be implied into a lease, or
(b) is to be implied into a lease in a modified form.
(7) Regulations under this section—
15(a) are to be made by statutory instrument;
(b) may make provision generally or only in relation to specific
cases;
(c) may make different provision for different purposes;
(d)
20
may include supplementary, incidental, transitional or saving
provision.
(8) A statutory instrument containing regulations under this section is
subject to the negative procedure.
21E Annual reports
(1)
25
A landlord must, on or before the report date for an accounting period,
provide the tenant with a report in respect of service charges arising
in that period.
(2) The appropriate authority may by regulations make provision as to—
(a) the information to be contained in the report in respect of those
service charges;
30(b) the form of the report;
(c) the manner in which the report is to be provided.
(3) The appropriate authority may by regulations also make provision
requiring information to be contained in the report in respect of other
35
matters which the appropriate authority considers are likely to be of
interest to a tenant, whether or not they directly relate to service
charges or to service charges arising in the period.
(4) An “accounting period” is—
(a) a period of 12 months specified in the lease as an accounting
period, or
40(b) if no such period is specified in the lease, a period of 12 months
beginning with 1 April.
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(5) The “report date” for an accounting period is the final day of the
period of one month beginning with the day after the final day of the
accounting period.
(6)
5
The appropriate authority may by regulations provide for exceptions
from the duty in subsection (1) by reference to—
(a) descriptions of landlord;
(b) descriptions of service charge;
(c) any other matter.
(7) Regulations under this section—
10(a) are to be made by statutory instrument;
(b) may make provision generally or only in relation to specific
cases;
(c) may make different provision for different purposes;
(d)
15
may include supplementary, incidental, transitional or saving
provision.
(8) A statutory instrument containing regulations under this section is
subject to the negative procedure.”
(3) In section 28 (meaning of “qualified accountant”)—
(a)
20
in subsection (1), for the words from “in section” to “person” substitute
“in section 21D(2)(b) (report on service charge account) is to a person”;
(b) for subsection (2) substitute—
“(2) A person has the necessary qualification if the person—
(a) is eligible for appointment as a statutory auditor under
Part 42 of the Companies Act 2006, or
25(b) satisfies such other requirement or requirements as may
be specified in regulations made by the appropriate
authority.”;
(c) in subsection (4)(d), for the words from “covered” to the end substitute
“covered by the statement of account in question relate”.
30(d) after subsection (6) insert—
“(7) Regulations under this section—
(a) are to be made by statutory instrument;
(b) may make provision generally or only in relation to
specific cases;
35(c) may make different provision for different purposes;
(d) may include supplementary, incidental, transitional or
saving provision.
(8) A statutory instrument containing regulations under this section
40
(whether alone or with other provision) is subject to the
affirmative procedure.”
(4) In section 39 (index of defined expressions), in the entry for “qualified
accountant”, for “section 21(6)” substitute “section 21D(2)(b)”.
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56 Right to obtain information on request
(1) The LTA 1985 is amended as follows.
(2) After section 21E (as inserted by section 55) insert—
“21F Right to obtain information on request
5(1) A tenant may require the landlord to provide information specified
in regulations made by the appropriate authority.
(2) The appropriate authority may specify information for the purposes
of subsection (1) only if it relates to—
(a) service charges, or
10(b) services, repairs, maintenance, improvements, insurance, or
management of dwellings.
(3) The landlord must provide the tenant with any of the information
requested that is within the landlord’s possession.
(4) The landlord must request information from another person if—
15(a) the information has been requested from the landlord under
subsection (1),
(b) the landlord does not possess the information when the request
is made, and
(c)
20
the landlord believes that the other person possesses the
information.
(5) That person must provide the landlord with any of the information
requested that is within that person’s possession.
(6) A person (“A”) must request information from another person (“B”)
if—
25(a) the information has been requested from A under subsection
(4) or this subsection,
(b) A does not possess the information when the request is made,
and
(c) A believes that B possesses the information.
30(7) B must provide A with any of the information requested that is within
B’s possession.
(8) The appropriate authority may by regulations—
(a) provide for how a request is to be made under this section;
(b)
35
provide that a request under this section may not be made
until the end of a particular period, or until another condition
is met;
(c) make provision as to the period within which a request under
subsection (4) or (6) must be made;
(d)
40
provide for circumstances in which a duty to comply with a
request under this section does not apply.
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(9) Section 21G makes further provision about requests under this section.
(10) For the purposes of this section—
(a) “information” includes a document containing information,
and a copy of such a document;
5(b) references to a tenant include the secretary of a recognised
tenants’ association representing the tenant, in circumstances
where the tenant has consented to the association acting on
the tenant’s behalf for the purposes of this section.
(11) Regulations under this section—
10(a) are to be made by statutory instrument;
(b) may make provision generally or only in relation to specific
cases;
(c) may make different provision for different purposes;
(d)
15
may include supplementary, incidental, transitional or saving
provision.
(12) A statutory instrument containing regulations under this section is
subject to the negative procedure.
21G Requests under section 21F: further provision
(1)
20
Subsections (2) to (6) apply where a person (“R”) requests information
under section 21F from another person (“P”).
(2) R may request that P provide the information to R by allowing R
access to premises where R may inspect the information and make
and remove a copy of the information.
(3)
25
P must provide information which P is required to provide under
section 21F—
(a) before the end of a specified period beginning with the day
the request is made, and
(b) if R has made a request under subsection (2), by allowing R
the access requested during a specified period.
30“Specified” means specified in regulations made by the appropriate
authority.
(4) P may charge R for the costs of doing anything required under section
21F or this section.
(5)
35
But, if P is a landlord, P may not charge the tenant for the costs of
allowing the tenant access to premises to inspect information (but may
charge for the making of copies).
(6) The costs referred to in subsection (4) may be relevant costs for the
purposes of a variable service charge (whether charged to the tenant
making the request under section 21F(1) or another tenant).
40(7) Regulations under subsection (3) may provide for circumstances in
which a specified period is to be extended.
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(8) The appropriate authority may by regulations make further provision
as to how information requested under section 21F is to be provided.
(9) Regulations under this section—
(a) are to be made by statutory instrument;
5(b) may make provision generally or only in relation to specific
cases;
(c) may make different provision for different purposes;
(d) may include supplementary, incidental, transitional or saving
provision.
10(10) A statutory instrument containing regulations under this section is
subject to the negative procedure.
21H Effect of assignment on requests under section 21F
(1) The assignment of a tenancy does not affect an obligation arising as
a result of a request made under section 21F before the assignment.
15(2) But, in the circumstances of such an assignment, a person is not obliged
to provide the same information more than once in respect of the same
dwelling.”
(3) Omit the following sections—
(a) section 22 (request to inspect supporting accounts);
20(b) section 23 (request relating to information held by superior landlord);
(c) section 24 (effect of assignment on request).
57 Enforcement of duties relating to service charges
(1) The LTA 1985 is amended as follows.
(2) Omit section 25 (offences).
25(3) Before section 26 insert—
“25A Enforcement of duties relating to service charges
(1) A tenant may make an application to the appropriate tribunal on the
ground that the landlord—
(a)
30
demanded the payment of a service charge otherwise than in
accordance with section 21C(1);
(b) failed to provide a report in accordance with section 21E.
(2) On an application made under subsection (1), the tribunal may make
one or more of the following orders—
(a)
35
an order that the landlord must, before the end of the period
of 14 days beginning with the day after the date of the order—
(i) demand the payment of a service charge in accordance
with section 21C(1);
(ii) provide a report in accordance with section 21E;
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(b) an order that the landlord pay damages to the tenant for the
failure;
(c) any other order which the tribunal considers consequential on
an order under paragraph (a) or (b).
5(3) A person (“C”) may make an application to the appropriate tribunal
on the ground that another person (“D”) failed to comply with a
requirement under section 21F or 21G.
(4) On an application made under subsection (3), the tribunal may make
one or more of the following orders—
10(a) an order that D comply with the requirement before the end
of the period of 14 days beginning with the day after the date
of the order;
(b) an order that D pay damages to C for the failure;
(c)
15
any other order which the tribunal considers consequential on
an order under paragraph (a) or (b).
(5) Damages under this section may not exceed £5,000.
(6) The appropriate authority may by regulations amend the amount in
subsection (5) if the appropriate authority considers it expedient to
do so to reflect changes in the value of money.
20(7) A landlord may not for any purpose set off damages payable by the
landlord to a tenant under this section against any present or future
liability of the tenant to the landlord.
(8) Where a landlord is “the payee” for the purposes of section 42 of the
25
Landlord and Tenant Act 1987, and the landlord uses sums that are
held on trust under that section to pay damages under this section,
such use is a breach of that trust.
(9) Amounts payable by way of damages under this section are not to be
regarded as relevant costs to be taken into account in determining the
30
amount of any variable service charge payable by a tenant (whether
or not a tenant to whom the damages are paid).
(10) A lease, contract or other arrangement is of no effect to the extent that
it would make provision contrary to subsections (7) to (9).
(11) Regulations under this section—
(a) are to be made by statutory instrument;
35(b) may make provision generally or only in relation to specific
cases;
(c) may make different provision for different purposes;
(d) may include supplementary, incidental, transitional or saving
provision.
40(12) A statutory instrument containing regulations under this section is
subject to the negative procedure.”
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Insurance
58 Limitation on ability of landlord to charge insurance costs
After section 20F of the LTA 1985 insert—
“20G Limitation of variable service charges: insurance costs
5(1) Excluded insurance costs are not to be regarded as relevant costs to
be taken into account in determining the amount of any variable
service charge payable by a tenant.
(2) “Excluded insurance costs” are any costs (whether or not they are
expressed as forming part of an insurance premium) that—
10(a) are attributable to payments made, or to be made, to arrange
or manage insurance, and
(b) are not attributable to a permitted insurance payment.
(3) Payments made to arrange or manage insurance include payments
made—
15(a) for the purpose of providing an incentive to enter into, or
arrange for another person to enter into, a particular contract
of insurance;
(b) as remuneration for any work done, however described, in
relation to—
20(i) a contract of insurance before or after it has been
entered into, or
(ii) insurance generally without a particular contract of
insurance in contemplation.
(4)
25
A “permitted insurance payment” is a payment of a description
specified in regulations made by the appropriate authority.
(5) The regulations may provide that a payment is a permitted insurance
payment by reference to—
(a) the kind of person to or in respect of which the payment is
made;
30(b) the circumstances in which the payment is made;
(c) the method by which the amount of the payment is calculated
(which may be a method specified in the regulations);
(d) the nature of its connection with work done, costs incurred or
time spent;
35(e) any other matter.
(6) In this section, a reference to a payment includes—
(a) a non-monetary benefit;
(b) a right to retain money or a non-monetary benefit instead of
paying or giving it to another person.
40(7) Regulations under this section—
(a) are to be made by statutory instrument;
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(b) may make provision generally or only in relation to specific
cases;
(c) may make different provision for different purposes;
(d)
5
may include supplementary, incidental, transitional or saving
provision.
(8) A statutory instrument containing regulations under this section
(whether alone or with other provision) is subject to the affirmative
procedure.
20H Right to claim where excluded insurance costs charged
10(1) This section applies if, despite section 20G(1), a tenant pays a
prohibited amount to any person.
(2) For the purposes of this section, a “prohibited amount” is an amount
that is—
(a) demanded as a variable service charge, and
15(b) attributable to excluded insurance costs.
(3) The appropriate tribunal may, on the application of the tenant—
(a) order the person to which the prohibited amount was paid to
return all or any part of the amount to the tenant;
(b) order—
20(i) the tenant’s landlord,
(ii) a person that benefited from the payment of the
prohibited amount, or
(iii) a person that benefited from a payment to which the
excluded insurance costs are attributable,
25to pay damages to the tenant.
(4) Damages under subsection (3)(b) must—
(a) equal or exceed the prohibited amount paid;
(b) not exceed an amount that is three times the prohibited amount
paid.
30(5) If the appropriate tribunal orders that more than one person is to pay
damages to the tenant under subsection (3)(b)—
(a) the tribunal may order that those persons are to be jointly,
severally, or jointly and severally liable to pay the damages,
and
35(b) the references in subsection (4) and paragraph (a) to the
damages are to the damages payable by all of those persons
taken together.
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