Royal Assent for Leasehold Reform (Amendment) Act 2014

14 March, 2014
by: Cripps Pemberton Greenish

On 13 March 2014 the Leasehold Reform (Amendment) Act 2014 (“the 2014 Act”) received Royal Assent and will come into force on 13 May 2014.

The Act makes one very simple, yet important, change to how notices of claim in relation to lease extension and collective enfranchisement claims can be signed.  Previously the Leasehold Reform, Housing and Urban Development Act 1993 (“the 1993 Act”) provided that these notices had to be signed personally by the tenant(s) exercising the relevant right.  This turned out to be a real problem in certain circumstances.  For example if a tenant lost mental capacity, or was unable to physically sign the notice, the notice would be invalid even if signed on behalf of the tenant by an individual acting under a power of attorney.  This is clearly an unfair situation and may even have been capable of challenge under the Human Rights Act.  Equally, in very large blocks where a significant number of tenants were exercising the right to purchase the freehold of their block (collective enfranchisement), this requirement could cause major delay whilst the notice was signed by each tenant.  However, the 2014 Act now allows these notices of claim to be signed on behalf of the tenant(s) exercising the right.  Not only will this allow attorneys to sign, but solicitors may also sign on behalf of their clients.

As well as dealing with the potential unfairness of the existing legislation, this amendment also removes a major stumbling block for tenants as the failure of the tenant to sign the notice personally was a common reason for rejection of notices of claim.  Equally, this amendment has the potential to allow service of notices far more quickly and consequently fix the valuation date at an earlier point, which may be particularly important in today’s rapidly improving property market.

There is one slight caveat to the above, namely that the amendment does not apply to Wales.  Housing is a devolved matter and, therefore, similar legislation will need to be passed by the Welsh Assembly before this provision will apply to property in Wales.