Ladybird Living – Your London Estate Agent
Feb 2024: Leasehold and Freehold Reform Bill and more
This blog will outline the following top 3 things your real estate agency should be aware of this February 2024:
- Leasehold and Freehold Reform Bill
- Increase in Fines for Right to Rent Violations
- Government Assistance for Flood-Affected Communities
- Leasehold and Freehold Reform Bill:
The Leasehold and Freehold Reform Bill, initially presented in November 2023, is set to impact England and Wales with the aim of “enhancing consumer options and equity in leasehold to combat unjust practices in the leasehold sector.”
As part of this legislation, the government is considering implementing a cap on ground rent.
During the committee stage in January, the Labour Party proposed amendments to the Leasehold and Freehold Reform Bill. These modifications include the introduction of a Leasehold Reform Bill in Labour’s initial King’s Speech if the Conservative government does not proceed with the current bill. Additionally, they have committed to adopting suggestions from the Law Commission to simplify the process for leaseholders to purchase or extend their leases.
The development of the Bill is expected to continue in the coming months.
2. Increase in Fines for Right to Rent Violations:
As a component of the Immigration Act 2014, landlords and letting agents are legally obligated not to lease their properties to tenants lacking the right to reside in England. Those who knowingly rent to individuals with lawful immigration status can incur civil penalties.
Effective February 13, these fines will see a substantial rise. First-time breaches will escalate from £80 per lodger and £1,000 per occupier to a maximum of £5,000 per lodger and £10,000 per occupier. Repeat offenses could now result in a maximum fine of £10,000 per lodger and £20,000 per occupier.
To accurately verify a tenant’s immigration status, landlords must inspect original immigration documents, create copies, and retain them for 12 months post-tenancy. Letting agents are required to confirm that all occupants have legal status to reside in the UK.
This Right to Rent penalty scheme is applicable to landlords and letting agents and is currently compulsory only in England for properties within the country.
3. Government Assistance for Flood-Affected Communities:
Communities impacted by ‘exceptional localized flooding’ during Storm Henk (2 to 12 January) can seek financial aid through the Flood Recovery Framework.
With over 30 flood warnings during Storm Henk, approximately 2,000 properties were damaged, resulting in insured losses exceeding £150 million.
The government is offering support as follows:
- Flooded households can request up to £500 to cover immediate costs.
- Households significantly affected are eligible for 100% council tax relief for at least 3 months.
- Eligible property owners affected by flooding can apply for up to £5,000 to enhance their homes’ resilience to future flooding.
The government aims to invest £5.3 billion to protect properties and prevent future flood damages. Details on eligibility and support are available through local councils.
The information in this post is valid to the best of our knowledge on the date of posting. It is advised that you seek independent advice based on your individual circumstances.
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