Leasehold consultation to close this week
**UPDATE** The consultation deadline has been extended to 23:59 on Sunday 7 April.
A consultation which could increase the number of properties couples can hold to qualify for building safety protections will close on Sunday 7 April.
At present a loophole in the legislation means that couples who own properties individually can hold up to five properties in total, and still qualify for financial support as ‘qualifying leaseholders’. For individuals the limit is three.
What is a qualifying leaseholder?
The Building Safety Act 2022 introduced a cap on the costs of remediating fire safety defects for some leaseholders. These are known as leaseholder protections.
However, only ‘qualifying leaseholders’ are able to benefit from the protections.
To qualify leaseholders must:
- Own a property in a ‘relevant building’ (that is one that is over 11m high or five storeys tall that contains at least two residential dwellings)
- Have a lease that was already in existence before 14 February, 2022
- Own no more than three residential properties in the UK – including their own home.
The anomaly has come about due to the way in which properties are held. It means that where a couple own a single property jointly – for example their own home – under current rules they are BOTH allowed to own two additional properties each as individuals.
Were these properties all owned jointly, they would not qualify for protections.
What is the Government planning to do?
The Government is exploring two options:
- Reducing the total number of properties a couple can hold, regardless of the ownership structure, to three (including the home they live in).
- Increasing the total number of additional properties a couple can hold, regardless of the ownership structure, to five (again, including the home they live in).
It is understood the second option is the Government’s preferred way forward.
What does the NRLA want?
The NRLA would like to see the qualifying leaseholder rules scrapped altogether to make support available to landlords across the board, regardless of how many properties they own and how they are held.
However, of the options currently on the table, we would like to see the scheme opened up to those with a total of five properties, to make it as fair as possible.
If you are affected you can respond to the call for evidence here.
More information
To download the NRLA guide on qualifying leaseholders click here.
For the latest on the progress of the Leasehold Reform Bill currently making its way through the Lords, click here.
