The Building Safety Act 2022 was granted Royal Assent on 28 April 2022. This Act was introduced in response to the Grenfell Fire tragedy in 2017. It aims to manage building safety risks to ensure the safety of people in or about buildings. The Act makes ground-breaking reforms to give residents and homeowners more rights, powers, and protections.
Importantly, since 28 June 2022, qualifying leaseholders in England can no longer be charged for cladding remediation. This means that leaseholders will pay nothing to remove dangerous cladding, subject to certain criteria.
However, it’s crucial to note that before the Levelling Up and Regeneration Act 2023, a “qualifying lease” had to be one that was granted before 14 February 2022. This meant that a leaseholder who extended the term on their lease after that date would not qualify for the protections under the Building Safety Act 2022. This posed a significant challenge for leaseholders contemplating lease extensions, as they risked losing the protections offered by the Building Safety Act 2022.
The recent amendments introduced by the Levelling Up and Regeneration Act 2023 have addressed this issue, ensuring that leaseholders extending their leases retain the protections of the Building Safety Act 2022. This is a significant development that provides much-needed clarity and security for leaseholders.
What’s New: The Concept of “Connected Replacement Lease”
The recent Levelling Up and Regeneration Act 2023 has introduced noteworthy amendments to the Building Safety Act 2022, specifically concerning the definition of a “Qualifying Lease” under section 119 by introducing the idea of a “connected replacement lease” under a new section, 119A. In essence, it defines scenarios where a new lease can be seen as a continuation of a previous qualifying lease, thereby preserving the leaseholder’s rights.
To qualify as a connected replacement lease:
- It must be a lease for a single dwelling in a relevant building.
- The tenant under the new lease should be responsible for a service charge.
- The new lease should have been granted on or after 14 February 2022.
- It replaces either one qualifying lease or multiple leases, of which at least one is a qualifying lease.
- There must be continuity in the property let. This can happen if:
- The property remains exactly the same.
- The new lease includes some, all, or more than the already leased property.
- The new lease covers only a portion of the previously leased property (unless there was a previous property combination).
It’s crucial to note that these provisions will come into effect two months from the date the Act was passed. Given that the Act was passed on 26 October 2023, the effective date for these amendments will be 26 December 2023.
Why It Matters
The most crucial aspect for leaseholders to understand is the safety net this amendment provides. Before this change, leaseholders extending or changing their lease might have been at risk of losing the protections offered by the Building Safety Act 2022 regarding remedial works. With the introduction of the “connected replacement lease” concept:
- Even if a leaseholder decides to extend or modify their lease, they can be confident that their rights and protections remain intact.
- One of the primary concerns of the Building Safety Act 2022 was to ensure that tenants weren’t unfairly burdened with costs related to remedial works on buildings. With this amendment, leaseholders extending their leases will retain this protection.
- The amendment offers clarity and an element of flexibility, allowing for lease renewals, rectifications, or adjustments while retaining the original protections.
In conclusion, if you’re a residential leaseholder contemplating an extension or change to your lease, this amendment safeguards your rights and offers clarity. Always consult with your solicitor to understand fully how these changes affect your specific circumstances. Expert drafting of any new lease is important to ensure that all relevant provisions of the Building Safety Act 2022 and the Levelling Up and Regeneration Act 2023 are properly incorporated and that your rights are fully protected.
Solicitors for Statutory Leasehold Extensions
At Langley Wellington, our experienced residential property solicitors have supported clients across Gloucestershire with their Statutory Leasehold Extensions for many years. To speak to a knowledgeable, friendly and professional solicitor today, please call 01452 521286 (Gloucester) or 01242 269998 (Cheltenham). Alternatively, email firstname.lastname@example.org or fill in this contact form.
This blog is not intended to be taken as advice or acted upon. If you are seeking legal advice, please get in touch with our team of solicitors.