| The Leasehold Reform (Ground Rent) Act 2022 (“the Act”) came into force on the 30th June 2022 and will come into force for retirement properties from the 1st April 2023. The Act brought one of the most significant changes to property law for some years by ending ground rents in new, qualifying extended residential leasehold properties in England and Wales. Once the Act comes into force, ground rents in most new leases cannot (legally) be anything more than a peppercorn, which in effect means that no money should be charged as ground rent in leases regulated by the Act. Landlords will also be prohibited from charging an administration charge for collecting a peppercorn rent. Contracts to grant leases before the Act comes into force are not affected. The Act will apply to any regulated lease, defined as a long lease of a single dwelling. It will be granted for a premium on or after the relevant commencement day, other than in pursuance of a contract made before that day, as long as it is not an excepted lease. The Act imposes fines of between £500 and £30,000, which may be levied where the enforcing authority is satisfied beyond reasonable doubt that there is a breach of the Act. There will be a significant change in how residential leases operate, meaning existing long leases with ground rents may be less attractive to buyers than a new regulated lease. The sale and purchase of an investment in the ground rent reversion of development will no longer be possible. Those who have invested in-ground rent reversion need to take care when a development straddles the Act’s start date to determine whether a ground rent can lawfully charge. For more information, please click on the following link Leasehold Reform (Ground Rent) Act 2022 – GOV.UK |