Following the tragic event at Grenfell Tower in 2017 and recent safety issues with high-rise buildings, the government introduced the Building Safety Act 2022 (BSA 2022) which came into force in April 2023.
The legislation aims to improve the design, construction and management of higher-risk buildings, provide protection to long leaseholders and ensure remediation costs are borne by developers of the buildings.
Whilst the legislation aims to resolve an important part of one of many leasehold problems, it has created another problem for leaseholders, housing associations, freeholders and last but not least, solicitors – lease extension.
Qualifying Lease/leaseholder
Under BSA 2022, a qualifying lease/leaseholder is one with a property in a high-risk building (above 11m or 5 storeys) on 14 February 2022.
The challenge the Act poses for leaseholders looking to extend their lease in 2023 for example is that a new date is entered in the leasehold title in line with the lease extension and that, by the letter of the legislation, disqualifies the lease from being a qualifying lease. With no guidance on how this emerging problem can be resolved, it is once again, left to solicitors to find a temporary solution while the legislation is developed.
The practical approach is to include a clause to protect the old lease (extended lease) as a qualifying lease. Some housing associations and freeholders adopt this approach and though there are challenges in certain quarters, it is obvious that this approach will temporarily protect the essence of the legislation which is to protect leaseholders until a permanent solution is found.
If you require further information on this article, please do not hesitate to contact the writer on Bernard.Arhin@lawcomm.co.uk or 01489864125.
