5 March 2008
We received a petition asking:
"We the undersigned petition the Prime Minister to Abolish Leasehold."
Details of Petition:
"The antiquated leasehold laws date back to the eleventh-century and apply only to England, Wales and Hawaii. Scotland managed to replace residential leasehold with commonhold. It is only fair that England and Wales should be relieved of this feudal law."
Read the Government’s response
Like freehold, leasehold is a long established and extremely common way of owning property in England and Wales. Unlike freehold ownership, however, leasehold ownership is limited in time.
The Government introduced the Commonhold and Leasehold Reform Act 2002 (the 2002 Act). The 2002 Act made significant changes to the rights of leaseholders including making the purchase of the freehold or the extending of the lease of the property easier, introducing a new no fault right to manage, and making the resolution of disputes quicker, easier and cheaper by moving jurisdiction for the majority of disputes from the courts to the leasehold valuation tribunal.
The 2002 Act also introduced a new form of freehold ownership, known as Commonhold, as a voluntary alternative to long leasehold ownership of inter-dependent properties such as flats. Commonhold. is similar to systems in the USA and Australia, but is unique to England and Wales. It is intended to be suitable for developments of all sizes and for mixed use developments.
Commonhold was provided for as an alternative to leasehold as part of Government’s commitment to promote housing choice. Such choice would not be achieved by either imposing a ban on future leasehold development, or abolishing leasehold in general. In addition, banning leasehold in general would require consideration of matters such as whether the landlord, who would lose their interest in the property if leasehold were abolished, was entitled to be recompensed for that loss, and if so, who would be liable to pay.
Currently when leaseholders qualify and wish to buy the freehold they are liable to pay an appropriate premium for it. For example, if all existing leaseholders were required to convert to common hold, it could be argued that this kind of forced conversion would amount to a form of compulsory purchase. The associated interference with the dissenting minority’s property rights and the removal of their statutory protections would give rise to human rights implications. Imposing the costs of conversion on unwilling participants could also be problematic.