The Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025
These regulations, effective March 3, 2025, implement several sections of the Leasehold and Freehold Reform Act 2024 related to leaseholders' right to manage.
Specifically, they define non-residential limits on claims, detail cost allocation, ensure compliance with the 2002 Commonhold and Leasehold Reform Act, prohibit initial High Court applications for tribunal matters, and restrict the recovery of certain costs.
The aim is to clarify, simplify, and streamline the right-to-manage process for leaseholders.
Arguments For
Streamlining Leasehold Processes: The regulations simplify and clarify aspects of the right to manage process, making it easier and less costly for leaseholders to collectively manage their buildings. This reduces administrative burden and potential disputes.
Cost Reduction for Leaseholders: By clarifying cost allocation for right to manage claims (section 50), the regulations aim to reduce potential financial burdens on leaseholders pursuing this right.
Improved Compliance with Existing Legislation: The provisions ensure alignment with the Commonhold and Leasehold Reform Act 2002, promoting consistent and effective application of existing legislation. This supports overall fairness and consistency in property management.
Efficiency in Dispute Resolution: Removing first-instance High Court applications in tribunal matters (section 52) speeds up the resolution of disputes, saving time and legal costs for all parties involved.
Arguments Against
Potential for Unintended Consequences: Changes to cost allocation or dispute resolution processes might inadvertently benefit one party over another, leading to unforeseen consequences or creating new loopholes.
Implementation Challenges: Clear and effective communication is crucial for successful implementation. Lack of clarity may lead to confusion or inconsistent application of the regulations amongst different stakeholders.
Limited Scope: The regulations address only specific sections of the 2024 Act. More comprehensive reforms may be required to address all aspects of leasehold reform effectively.
Insufficient Impact Assessment: While an impact assessment exists, concerns may remain regarding potential long-term impacts or effects on specific demographics or property types.
Citation
- These Regulations may be cited as the Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025.
This section simply establishes the official title and citation for these regulations.
It dictates how this legal document will be referred to in future legal or official documents.
Provisions coming into force on 3rd March 2025
The following provisions of the Leasehold and Freehold Reform Act 2024 come into force on 3rd March 2025-
(a) section 49 (change of non-residential limit on right to manage claims);
(b) section 50 (costs of right to manage claims);
(c) section 51 (compliance with obligations arising under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002);
(d) section 52 (no first-instance applications to the High Court in tribunal matters);
(e) section 64 (restriction on recovery of non-litigation costs) insofar as it inserts section 20J of the Landlord and Tenant Act 1985 as regards the right to manage.
This section specifies the sections of the Leasehold and Freehold Reform Act 2024 scheduled to take effect on March 3, 2025.
These sections cover various aspects of leaseholders' right to manage, including the definition of non-residential units, clarifying cost allocation in disputes, ensuring compliance with previous legislation, restricting access to the High Court in certain cases, and limiting recoverable costs.
The specified sections streamline the right to manage process.
EXPLANATORY NOTE (This note is not part of the Regulations) These Regulations bring into force provisions of the Leasehold and Freehold Reform Act 2024 (c. 22) ('the Act') relating to the right to manage. Regulation 2 brings into force sections 49 to 52 of the Act on 3rd March 2025. Section 64 is brought into force insofar as it inserts section 20J of the Landlord and Tenant Act 1985 (c. 70) as regards the right to manage. A full impact assessment has been published in relation the Act and copies can be obtained at https://publications.parliament.uk/pa/bills/cbill/58-04/0013/ LeaseholdandFreeholdReformBillImpactAssessment.pdf or from the Ministry of Housing, Communities and Local Government at 2 Marsham Street, London, SW1P 4DF, United Kingdom.
This explanatory note summarizes the regulations' purpose – the implementation of specific sections of the Leasehold and Freehold Reform Act 2024 concerned with right to manage.
It also provides public access details for a full impact assessment conducted before the Act's introduction.
This assessment helps evaluate the wider societal impact associated with this legal measure.
NOTE AS TO EARLIER COMMENCEMENT REGULATIONS (This note is not part of the Regulations) The following provisions of the Leasehold and Freehold Reform Act 2024 (c. 22) have been brought into force by commencement regulations made before the date of these Regulations. | Provision | Date of Commencement | S.I. No. | |-------------|------------------------|------------| | Section 27 | 31st January 2025 | 2025/57 | | Section 114 | 31st October 2024 | 2024/1018 | | Section 115 | 31st October 2024 | 2024/1018 | | Section 116 | 31st October 2024 | 2024/1018 |
This note provides a list of sections from the 2024 Act that have already been brought into effect through earlier regulations, indicating the commencement date and corresponding statutory instrument number for each.
It demonstrates that this document is not the first set of regulations, and the process of implementing the 2024 Act is ongoing.