Leasehold and Freehold Reform Act 2024 – What has commenced?
The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024, 5 sections of the act commenced alongside this date:
- Section 113 (regulation of remedies for rentcharge arrears).
- Section 117 (recovery of legal costs etc through service charge).
- Section 118 (repeal of section 125 of the BSA 2022).
- Section 119 (higher-risk and relevant buildings: notifications in connection with insolvency).
Section 113 – regulation of remedies for rent charge arrears
Rent charges are annual charges on freehold properties payable to third parties called rent owners who have no interest in the property themselves. They are common in private estates. These charges are usually paid by the homeowner to a management entity for maintenance, such as for example, the maintenance of a private garden on the estate or a private road. Rent charges are registrable against the title to the property.
Prior to s113, the main piece of legislation for rentcharges came in 1977 under the Rentcharges Act that provided that no new rentcharges could be created on or after 22 August 1977 and any existing rentcharges would automatically be extinguished by 2037 with an expiry date of 60 years from the date when the rentcharge first became payable.
The new provisions regulate the enforcement remedies available to rent owners. Before the introduction of the 2024 act all rent owners were able to create an action in debt to obtain any monies due; if the deed in which the rentcharge was created had come into effect after the 31st of December 1881, the rent owner had right of possession until the monies were paid under the Law of Property Act 1925, being able to grant a lease to trustees in order to recover the outstanding amounts; finally if within the deed in which the rentcharge was created the powers of re-entry are given to the rentowner, the rentowner can remedy via forfeiture for non-payment.
This new Act removes the rights to possession of the property in order to enforce the rentcharge.
The changes mean the rent owner must now serve the homeowner a demand including the rent owners’: name, address, calculations of the arrears, details on how the payment should be made and a copy of the deed that evidences the rentcharge. Once this information has been served, the rentowner must wait 30 days before continuing to take further action in the recovery of monies.
Though some may ask whether making a regulation for something approaching the end of its relevance has a point, I believe that its dwindling applicability is why it is important to keep regulated. The rentcharge is old and losing relevance this would leave many uninformed of its existence though potentially liable. These provisions mean that if you are served with a demand for payment, the process to defend or pay the fee is more streamlined and gives time to the recipient to consider their legal rights.
Section 117 – recovery of legal costs etc through service charge
Section 117 adds the defined terms of Residential Management Companies (RMCs) and Right to Manage companies (RTMs) to schedule 8 of the Building Safety Act 2022 (“BSA”). RMCs are defined as corporate bodies that are party to a lease of a building where they are limited by guarantee and the members of that body are leaseholders in the building or when the majority of the corporate body are held by leaseholders. RTM companies are made up of at least 50% of leaseholders in a block that assembled in order to obtain the right (given under the Commonhold and Leasehold Reform Act 2002) that allows for property decision making to be made by the leaseholders within the company.
The inclusion of these terms allows these bodies to charge a service charge after dealing with legal or other professional services for matters within the scope of the BSA 2022. As these types of bodies are unable to act for any sort of finance, the service charge creates equality in the financial burden involved.
Section 118 – repeal of section 125 of the BSA 2022, remediation costs under the Building Safety Act 2022
Previously, section 125 of the Building Safety Act 2022 gave the court power to order associated companies of an insolvent landlord to contribute to remediation costs of a defective building. Section 118 now repeals this provision and creates protection for leaseholders, with the effect that all funds will go towards the necessary remediation instead of helping creditors of any insolvent landlord.
Section 119 – higher-risk and relevant buildings: notifications in connection with insolvency
Section 119 also refers to insolvency, in this context, it amends section 125A of the BSA 2022. This section imposes a new duty on any insolvency practitioners who are appointed in an insolvency dealing with properties that are 5 storeys or over 11 meters high or as they are called by the BSA “relevant buildings”. The duty requires them to notify local regulators of their appointment within 14 days. In cases where the buildings involved are 7+ storeys or over 18 meters high there is the added requirement to advise building safety regulators. These provisions ensure the safety of a building for all leaseholders during their tenure despite the insolvency of their landlord.
The next set of provisions were then brought into force on the 31st of October 2024 these provisions were:
- Section 114 (Steps relating to remediation of defects)
- Section 115 (Remediation Orders)
- Section 116 (Remediation Contribution Orders)
Like the previous 3 explained sections, these provisions concern themselves with the Building Safety Act 2022.
Section 114 – Steps relating to remediation of defects
Section 114 amends section 120 of the BSA. The original provision defined “relevant defects” within the context of buildings. This was defined as something that:
(a)arises as a result of anything done (or not done), or anything used (or not used), in connection with relevant works, and
(b)causes a building safety risk.
Section 114 adds a definition for “relevant steps” as S120(4A) of the original provision, stating that:
“Relevant steps”, in relation to a relevant defect, means steps which have as their purpose—
(a)preventing or reducing the likelihood of a fire or collapse of the building (or any part of it) occurring as a result of the relevant defect,
(b)reducing the severity of any such incident, or
(c)preventing or reducing harm to people in or about the building that could result from such an incident.
By defining such matters, the Leasehold and Freehold Reform Act 2024 alongside the BSA set the requirements expected of landlords, creating safer living environments for leaseholders and allowing for easier remediation if things go astray.
S115 – Remediation Orders
This provision amends Section 123 of the BSA. It gives the First Tier Tribunal powers to issue remediation orders on the application of interested persons such as leaseholders and local authorities.
S116 – Remediation Contribution Orders
Section 116 amends Section 124 of the BSA. It gives the First Tier Tribunal powers to make a remediation contribution order against parties with a financial connection to the building, on the application of an interested party such as a leaseholder or local authority.
As of November 2025, there is only 1 more provision that has commenced from The Leasehold and Freehold Reform Act 2024. On January 31st, 2025, S27 (Removal of qualifying period before enfranchisement and extension claims) of the act came into action.
S27 – Removal of qualifying period before enfranchisement and extension claims
This provision amends two different statutes: (1) Leasehold Reform Act 1967 (LRA) and the (2) Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA).
Section 1 of the LRA gave tenants the right to acquire the freehold, or an extension to their lease. It used to be the case that there was a right to agree fair terms when there was a long tenancy at a low rent.
The next part of section 27 consists of changes to section 39 of LRHUDA – this section lists what is needed to acquire a new lease. Once again this omits all mentions of qualifying time periods as well as the right of personal representatives.
The final part of section 27 also omits the ability for notices to be given by personal representatives from section 42 of LRHUDA.
The removal of all time requirements vastly increases the accessibility for tenants to acquire the freehold or obtain a lease extension.
At Benchmark Solicitors, we deal with disputes involving landlord and tenants, and other property disputes. Should you require any assistance with your property please do not hesitate to contact us.
10/11/2025 Jack Wilson, trainee solicitor