01 Apr 2022
Guest post by Tim Bishop, Senior partner of Bonallack & Bishop
Yes, at long last, the Government have confirmed, informally, that the long-awaited new ground rent ban will come into operation in June 30.
The information has not yet been confirmed on the government website or in any official communication, but ALEP (the Association of Leasehold Enfranchisement Practitioners – the specialist organisation for leasehold surveyors and solicitors which my law firm is a member of) has been asked to advise their members that the Leasehold Reform (Ground Rent) Act 2022 will come into effect on 30/06/2022 (except retirement properties where policy won’t apply before 01/04/23).
Needless to say there is much more detail in the act – and now we have an actual start date, I’ll post in more detail on this in due course. But this is particularly significant for any of you who are looking to sell new flats.
Developers may want to consider whether they decide to change all plot leases to a peppercorn ground rent (i.e. zero) in anticipation of the Act.
They might also consider how they will dispose of their freehold interest in land now that there is no financial value in ground rent and how to implement a successful exit strategy.
And watch out – there are some nasty penalties for nought non-compliance. If a landlord demands a ground rent in breach of the LRGRA 2022 and/or any payment is not returned to the tenant within 28 days of receipt, Trading Standards Authorities have the power to impose fines of between £500 and £30,000 on the landlord.
Thank you for reading
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