THE COMMONHOLD AND LEASEHOLD REFORM BILL

FACT SHEET No 9 VARIATION OF LEASES & APPOINTMENT OF A MANAGER

Leaseholders enjoy rights under Part IV of the Landlord and Tenant Act 1987 to seek variations to their leases.  The Government is aware that these are considered to be difficult to exercise.  The Bill therefore contains measures to improve the operation of the rights.

AMENDMENTS FOR VARIATION OF LEASES WILL: -

transfer jurisdiction for applications to vary leases from county courts to the Leasehold Valuation Tribunals;

clarify and extend the grounds for applying for a variation of a lease, such as leases that did not provide for a building to be insured under a single policy.  In addition the amendments will provide a power to specify further grounds under regulations

provide a right for any party to a lease of a dwelling to apply to a LVT for an order varying the provisions of a lease on the grounds that a fixed administration charge specified in the lease, or a formula for determining such a charge, was unreasonable.

Leaseholders also enjoy rights to seek the appointment of a new manager under Part II of the 1997 Act.  The Bill contains measures to improve the operation of that right.

AMENDMENTS TO THE APPOINTMENT OF A MANAGER REGIME WILL: -

make clear that leaseholders can apply to a LVT for the appointment of a new manager where a lease provides for management functions to be carried out by a third party manager rather than the landlord.

provide that failure to hold service charge funds in trust or in separate client accounts will be a specific ground on which to seek the appointment of a new manager;

restrict the current exemption for resident landlords in converted houses. The exemption would in future not apply if at least half of the flats in the building are held on long leases which are not business tenancies under Part II of the Landlord and Tenant Act 1954.