The Leasehold Reform Act is the first step in the UK Government’s aim to make leasehold property a fairer and more affordable deal for leaseholders.
The act means that from June 2022 it has been illegal to charge ground rent on new residential long leases (lease agreements of more than 21 years) in England and Wales.
As it stands, the act won’t affect existing leases, although they may be addressed in future reforms. Freehold owners who choose to regrant, renegotiate or extend an existing lease should be very careful to comply with new regulations.
Anyone found charging ground rent fees in violation of the rules of the Leasehold Reform Act could face fines of up to £30,000.