Leasehold and Freehold Act Provisions in Force – latest update March 2025

Leasehold and freehold act provisions are in force. The new law, the leasehold and freehold reform act has new provisions which have come into force as of 3 March 2025. For leaseholders in mixed use properties the new provisions allow for qualification for right to manage (RTM) when the Commercial part of the property is up to 50% which is an increase on the previous legislation which was 25%. This relates to RTM only and is not a change to the 1993 act for collective enfranchisement.

Another advantage for leaseholders is that they will no longer be obliged to pay legal fees either valuation or legal that the freeholder has incurred. This means freeholders will have to pay for their own professional representation. The housing minister, Matthew Pennycook, has described the changes as making it easier and cheaper for leaseholders to take control of the management of their buildings. Leaseholders will need to manage the process effectively and take on new responsibilities such as Finance and Maintenance.

There are a number of further challenges for leaseholders including fragmentation of ownership which is the benefit of the existing system. This will be particularly so with the ownership of mixed-use properties which could lead to poor management and reduced future investment. Leaseholders looking to make an application for RTM should seek professional support to ensure errors are avoided and the best outcome is achieved.