On 30th November, the House of Commons Public Bill Committee published an invitation to submit written views on the Leasehold Reform (Ground Rent) Bill.

What’s proposed by the Bill?

The Bill proposes to restrict the ground rent chargeable on new long residential leases to one peppercorn per year.  There are certain exceptions to this for certain types of properties.

This effectively restricts ground rents to zero financial value.

The Bill places a duty on trading standards authorities in England and Wales to enforce the Bill.

A breach of the ground rent restriction will be a civil offence for which enforcement authorities can impose a financial penalty of between £500 and £30,000. The money raised through financial penalties may be kept by authorities to fund their enforcement activities. They will also have the power to order the repayment of any unlawfully charged ground rent, plus interest, to leaseholders.

The Bill also prohibits the charging of administration charges in relation to peppercorn rents and makes provision for leaseholders to recover unlawfully charged ground rents through the First-tier Tribunal in England or the Leasehold Valuation Tribunal in Wales.

If enacted, the main provisions of the Act will come into force on a date to be specified by the relevant Secretary of State. But for retirement home leases (a lease relating to a dwelling that can only be occupied by people aged 55 or over), the Act’s provisions must commence no earlier than 1 April 2023.

Call for evidence

The Bill has now been sent to a Public Bill Committee, which will scrutinise the Bill.

The call for evidence explains that:

  • the first sitting of the Public Bill Committee is expected to be on 7th December 2021 and the Committee is scheduled to report by 9th December 2021
  • evidence may be submitted now until the end of the committee stage, which is scheduled to be 5pm on 9th December 2021, but could conclude earlier.

Submitting  evidence

Details are available here: