The UK Government has published a consultation on ground rents for existing leaseholders in the same week that they published new guidance on freehold estates.
The consultation on ground rents will consider the following five options for reforming existing leaseholds:
- Setting ground rents at a peppercorn.
- Putting in place a maximum financial value which ground rents could never exceed.
- Capping ground rents at a percentage of the property value.
- Limiting ground rent in existing leases to the original amount when the lease was granted.
- Freezing ground rent at current levels.
Voice your opinion
The CLA is keen to understand how many of our members’ rural portfolios will be affected by these changes. You can read the full consultation on the government website. If your rural portfolio will be affected by these changes, please email firstname.lastname@example.org by 22 of November.
Freehold estates are areas of land where communal spaces, such as roads and green areas, are not owned or looked after by the council. On these estates, residents will often pay for upkeep through an estate service charge. The government, through its publication of new guidance, has indicated that it will:
- Give residents on freehold estates the right to challenge the reasonableness of service charges they pay at the First-tier Tribunal (Property Chamber).
- Give residents the legal right to apply to the First-tier Tribunal (Property Chamber) to appoint or replace a managing agent to manage the facilities or services that they pay for.
- Require all estate management companies who do not employ a managing agent to belong to a redress scheme.
- Consider introducing measures to give homeowners the legal right to take on management of their estates themselves, after it has first considered the Law Commission’s report on how to improve the Right to Manage (RTM) for leaseholders.
We suspect these proposals will affect some CLA members’ rural portfolios. The government has said it will introduce legislation as soon as parliamentary time allows, but please email email@example.com with case studies. We are interested in the freehold estates you may hold, so that we can effectively brief.