The Housing Minister Matthew Pennycook has signed regulations to remove the two-year ownership rule for leaseholders contained in the Leasehold and Freehold Reform Act 2024 (LFRA 2024).
In his November ministerial statement Matthew Pennycook indicated that parliament intends to commence the relevant provisions in the LFRA 2024 to remove the ‘two-year rule’ in January.
In a post on ‘X’ he has now said that “I have today signed regulations to remove the two-year ownership rule for leaseholders of flats to extend their lease and leaseholders of houses to extend their lease or buy their freehold.” The change will come into force at the end of this month.
We assume this means the entirety of s.27 of the LFRA 2024 will commence meaning purchasers of properties that are currently entitled to extend their lease pursuant to the Leasehold Reform Housing and Urban Development Act 1993 (LRHUDA 1993) will be able to serve a notice to extend the lease without having to have been registered at the Land Registry as owner for at least two years.
However, we will have to wait to see the details of the regulations and actual effect of them.
There are some uncertainties still and also some significant consequences of “switching on” s.27 of the LFRA 2024.
Section 27 abolishes the express right of personal representatives to give a lease extension notice currently contained in s.39(3A) LRHUDA 1993. This may become superfluous because invariably personal representatives will be looking to the sell the property and the buyers can simply serve a notice themselves.
However, some buyers may not be happy to wait until they are registered at the Land Registry and may still require the seller to serve a notice to be assigned to them. This can likely be overcome by the Land Registry agreeing to expedite an application to register the purchaser to facilitate the buyer serving the new claim.
In addition, not all personal representatives will be looking to sell and will need to extend the lease in any event. Presumably then the personal representatives will simply need to be registered at the Land Registry as legal owners and then serve the notice themselves.
We will await the detail of the regulations .
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at January 2025.