We are pleased to share significant news for conveyancers and clients involved in flat leases. The Renters' Rights Bill was introduced to the House of Commons on 11 September 2024, and it includes a pivotal change that will enhance the conveyancing process.
Key Change: Clause 30
Clause 30 of the Bill proposes the removal of fixed-term leases granted for a term exceeding seven years from the assured tenancy regime. Consequently, such leases, including shared ownership leases, will no longer be classified as assured tenancies once the changes come into effect.
Implications for Conveyancers and Clients
- Streamlined Processes: This legislative change alleviates concerns for property lawyers regarding the risk of possession orders being issued without the right to seek relief. This marks a significant shift in how we approach lease agreements.
- Cost Efficiency: The necessity for deeds of variation to reduce rent or for indemnity insurance to protect against Housing Act 1988 possession claims—particularly concerning rent arrears under ground 8—will likely be diminished.
- Increased Certainty: This development provides greater clarity and security for both buyers and lenders operating in the flat lease market.
Considerations Moving Forward
While this change is undoubtedly positive, it is essential to remain vigilant regarding certain aspects:
- Lenders may not promptly revise their Part 2 requirements for leases with rents exceeding the Assured Tenancy thresholds (£1,000 per annum in Greater London and £250 elsewhere in England).
- It is anticipated that conveyancers and lenders will continue to expect the inclusion of lender notification clauses (often referred to as mortgagee protection) in leases.
- Additionally, leases may still face the risk of forfeiture due to breaches of lessee covenants; however, relief against forfeiture can be sought.
At CDS Mayfair, we welcome this development and are committed to guiding our clients through these changes with expertise and diligence. Our team of seasoned conveyancers is prepared to navigate the implications of this new legislation to ensure seamless transactions.
The legislation is not yet enacted, and as the Bill progresses through Parliament, we will keep you informed about its impact on the property market. Stay connected with CDS Mayfair for further insights on how these changes will shape the future of conveyancing and property transactions.
If you would like further information please contact Simon Saunders +44 (0) 207 758 8170 simonsaunders@cdsmayfair.com
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