A group of landowners, freeholders and reversionary landlords collectively brought a claim asking the Court to declare that amendments to existing legislation under the new Leasehold and Freehold Reform Act 2024 (“LFRA 2024”) were incompatible with human rights. Specifically, Article 1 of the First Protocol (“A1P1”), the right to protection of property. Not all sections of the LFRA 2024 have been implemented yet, those sections being the root of the claim brought against the Government.
The three main points of the case concerned:
- Abolishing the landlords right to receive 50% of any marriage value payable
- Capping ground rent when calculating premiums payable on lease extensions
- The right for a landlord to have their non-litigation costs paid by the leaseholder
The group of landlords argued that the reforms set out above breached A1P1 as they were not being fairly compensated for financial losses they are likely to suffer. The group of landlords lost the case on all arguments with the Court deciding that any infringements on the landlords rights under A1P1 were not sufficient enough when weighed up against the rights of millions of leaseholders. The intention of the LFRA 2024 is to make it easier, and cheaper for leaseholders to extend their leases and enfranchise. It remains to be seen whether the claimants will appeal the decision, further delaying reforms intended to benefit millions of leaseholders.
Whilst this is a win for the Government and seemingly a step forward in leasehold reform, there will be further consultations to take place in order to implement the remaining sections of the LFRA 2024.
If you have questions about your leasehold property please contact Rosanna Sayers.
