Leaseholders have failed in their attempt to stop freeholders from challenging the Leasehold and Freehold Reform Act.
A group of six freeholders, including the Duke of Westminster (main image, inset) and the Earl of Cadogan, believe the Act is incompatible with their human rights and infringes their right to enjoy their private property interests in leaseholders’ homes because it does not strike a fair balance between them and the leaseholders.
A Court of Appeal (main image) judge has rejected Leasehold Knowledge Partnership’s (LKP) written submissions, which says the review is now likely to be confined to the narrow, dry legal question of human rights and property rather than considering political matters such as whether the government should have gone further in its reforms.
Freeholders are arguing against the ending of marriage value in the Act – whereby they get half of any notional increase in value that leaseholders have paid for by extending their leases – the 0.1% cap on ground rents in enfranchisement calculations and having to pay their own legal costs for the process.
However, LKP believes the 2024 Act does not go far enough. “LKP believes marriage value to be a try-on too far that should never have been accepted, and giving freeholders the opportunity to load the enfranchisement process with its alleged legal costs was always likely to be thoroughly gamed,” it explains.
The group says the freeholders’ judicial review will be heard on 15th-18th July, and those who were unfortunate enough simply to have bought a flat in England and Wales and inadvertently became the long-term tenant of a usually anonymous freehold owner “determined to monetise them”, will have to keep their fingers crossed that the court kicks it out.
LKP fears that this litigation will continue to run for many more years, it adds. “Deep-pocketed freeholders – who with the 2024 Act failed to nobble Parliament as they so successfully did with the 2002 Commonhold and Leasehold Reform Act – will doubtless be hoping that by stringing out litigation long enough the government will be dissuaded from pursuing these reforms to their conclusion.”
The Leasehold and Freehold Reform Act 2024 was launched and enacted by the most recent Tory government largely driven by Michael Gove, the then housing secretary. After much political ping-poing Gove's measures within the Act were watered down before it became law just before the General Election. Labour is now seeking to make good those 'water down' changes with its own legislation, the Leasehold and Commonhold Reform Bill, which is due to go live later this year.
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