Leasehold and Freehold Reform Act 2024

Section 37

Schedule 7 Amendments consequential on sections 35 to 37 and Schedules 4 to 6

Involvement of other landlords: the LRA 1967

1 (1) Schedule 1 to the LRA 1967 (enfranchisement and extension by sub-tenants) is amended as follows.

(2) In paragraph 4—

(a) in sub-paragraph (1)—

(i) omit “and” at the end of sub-paragraph (a);

(ii) after sub-paragraph (b) insert—

“(c) agree the price payable;

(d) receive the whole of the price payable on behalf and in the name of all of the other landlords and, where the reversioner does so, hold that amount for themselves and the other landlords pending determination of the matters dealt with in Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.”;

(b) after sub-paragraph (1) insert—

“(1A) If the reversioner receives the whole of the price payable (including where required to do so under paragraph 5), the reversioner’s written receipt for payment of that amount is a complete discharge to the claimant.

(1B) Sub-paragraphs (1)(d) and (1A) do not apply if the price payable is required to be paid into the tribunal by virtue of paragraph 5(3A).”

(c) in sub-paragraph (3), omit paragraph (c).

(3) In paragraph 5—

(a) in sub-paragraph (1), for “under section 9 of this Act” substitute “in accordance with section 9 or 14A”;

(b) after sub-paragraph (2) insert—

“(2A) If required to do so by the claimant, the reversioner must receive the whole of the price payable, on behalf and in the name of all of the other landlords.

(2B) But the claimant may not impose such a requirement—

(a) if the terms of the acquisition of the freehold or grant of the lease, including the price payable, have not been agreed or determined (whether or not the matters dealt with in Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024 have been determined); or

(b) if, or to the extent that, the claimant is required to pay the price payable into the tribunal.

(2C) Sub-paragraph (2D) applies if the whole of the price payable is to be—

(a) received by the reversioner, or

(b) paid into the tribunal.

(2D) If required to do so by the claimant—

(a) the reversioner must, on behalf and in the name of all or (as the case may be) any of the other landlords execute the conveyance required by section 8(1) or the grant of the tenancy required by section 14(1);

(b) a landlord who has given notice under sub-paragraph (2) must deduce, evidence or verify their title for the purpose of the reversioner executing the conveyance or grant.”;

(c) for sub-paragraph (3) substitute—

“(3) Any of the other landlords may require the reversioner to apply to the appropriate tribunal for the price payable to be determined by the appropriate tribunal.”;

(d) after sub-paragraph (3) insert—

“(3A) Any of the other landlords may, by giving notice to the claimant and the reversioner, require the claimant to pay into the tribunal the whole price payable.

(3B) The court or the appropriate tribunal may order a landlord to pay to the reversioner the costs, or a contribution to the costs, incurred by the reversioner in obtaining from the appropriate tribunal money that has been paid into it in compliance with a requirement imposed under sub-paragraph (3A) if—

(a) the landlord imposed the requirement, and

(b) the reversioner shows that it was unreasonable for the landlord to impose the requirement.

(3C) The court or the appropriate tribunal may order the reversioner to pay to a landlord the costs, or a contribution to the costs, incurred by the landlord in obtaining from the appropriate tribunal money that has been paid into it in compliance with a requirement imposed under sub-paragraph (3A) if—

(a) the landlord imposed the requirement, and

(b) the landlord shows that the requirement was imposed because of unreasonable conduct by the reversioner.”;

(e) omit sub-paragraph (4);

(f) in sub-paragraph (5), in the words before paragraph (a), after “landlords” insert “(whether or not any entitlements to shares of the purchase price under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024 have been determined)”.

(4) After paragraph 6 insert—

“6A(1) Any of the other landlords may apply to the appropriate tribunal for the determination of their entitlement to a share of the purchase price under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.

(2) This paragraph does not limit the power of the reversioner to apply to the appropriate tribunal for the determination of any person’s entitlement to a share of the purchase price under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.”

(5) In paragraph 7(1)—

(a) omit paragraph (b);

(b) in paragraph (c), for “price payable for” substitute “share of the purchase price, as determined under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024, that is payable to the owner of”;

(c) in paragraph (d), for “the price payable for” substitute “each share of the purchase price, as determined under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024, that is payable to the owner of”;

(d) at the end of paragraph (d), insert “; and

(e) if the sum payable for the redemption of a rentcharge under section 11 or the discharge of a charge under section 12 cannot be ascertained because the share of the purchase price payable to the relevant landlord has not been agreed or determined under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024, the tenant may pay the whole of the price payable into the tribunal.”

(6) Omit paragraph 7A (minor superior tenancies).

Involvement of other landlords: collective enfranchisement under the LRHUDA 1993

2 In section 24 of the LRHUDA 1993 (applications where terms in dispute or failure to enter contract), after subsection (8) insert—

“(9) But the “terms of acquisition” do not include any terms which relate to matters dealt with in Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.”

3 (1) Schedule 1 to the LRHUDA 1993 (conduct of proceedings by reversioner on behalf of other landlords) is amended as follows.

(2) In paragraph 6 (acts of reversioner binding on other landlords)—

(a) in sub-paragraph (1)—

(i) in paragraph (b)(iv), for “for the acquisition of any interest” substitute “and, where the reversioner does so, hold that amount for themselves and the other landlords pending determination of the matters dealt with in Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024”;

(ii) at the end of paragraph (b) insert “and

(c) if the reversioner receives the price payable, the reversioner’s written receipt for payment of that amount is a complete discharge to the claimant;

but paragraphs (b)(iv) and (c) do not apply if the price payable is required to be paid into the tribunal by virtue of paragraph 7(3A).;

(b) in sub-paragraph (3), omit paragraph (c) (and the “and” preceding it).

(3) In paragraph 7 (which gives a landlord who is not the reversioner certain powers in relation to conduct of the claim)—

(a) in sub-paragraph (1)(a), at the end insert “, except the price payable”;

(b) in sub-paragraph (3), at the end insert “, except determination of the share of the price payable to which the landlord is entitled under Part 6 of Schedule 4 to the Freehold and Leasehold Reform Act 2024”;

(c) after sub-paragraph (3) insert—

“(3A) Any of the other relevant landlords may, by giving notice to the nominee purchaser and the reversioner, require the nominee purchaser to pay into the tribunal the whole of the price payable.

(3B) The court or the appropriate tribunal may order a relevant landlord to pay to the reversioner the costs, or a contribution to the costs, incurred by the reversioner in obtaining from the appropriate tribunal money that has been paid into it in compliance with a requirement imposed under sub-paragraph (3A) if—

(a) the relevant landlord imposed the requirement, and

(b) the reversioner shows that it was unreasonable for the landlord to impose the requirement.

(3C) The court or the appropriate tribunal may order the reversioner to pay to a relevant landlord the costs, or a contribution to the costs, incurred by the relevant landlord in obtaining from the appropriate tribunal money that has been paid into it in compliance with a requirement imposed under sub-paragraph (3A) if—

(a) the relevant landlord imposed the requirement, and

(b) the relevant landlord shows that the requirement was imposed because of unreasonable conduct by the reversioner.”;

(d) omit sub-paragraph (4).

(4) In paragraph 8 (obligations of other landlords to reversioner), in sub-paragraph (1), after “landlords” insert “(whether or not any entitlements to shares of the purchase price under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024 have been determined)”.

(5) After paragraph 9 insert—

“Entitlement to shares of the purchase price

10 (1) Any of the other relevant landlords may apply to the appropriate tribunal for the determination of their entitlement to a share of the purchase price under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.

(2) This paragraph does not limit the power of the reversioner to apply to the appropriate tribunal for the determination of any person’s entitlement to a share of the purchase price under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.”

4 In Schedule 8 to the LRHUDA 1993 (discharge of mortgages etc)—

(a) in paragraph 1, for the definition of “the consideration payable” substitute—

• ““the consideration payable” means the share payable to the landlord, as determined under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024, of the purchase price for the acquisition of the relevant interest;”;

(b) in paragraph 4, after sub-paragraph (3) insert—

“(4) If the amount to be applied for the redemption of a mortgage under paragraph 2, or that may be paid into the tribunal under sub-paragraph (1), cannot be ascertained because the share of the purchase price payable to the relevant landlord has not been agreed or determined under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024, the nominee purchaser may pay the whole of the price payable into the tribunal.”

Involvement of other landlords: new lease under the LRHUDA 1993

5 In section 48 of the LRHUDA 1993 (applications where terms in dispute or failure to enter into new lease), after subsection (7) insert—

“(8) But the “terms of acquisition” do not include any terms which relate to matters dealt with in Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.”

6 (1) Schedule 11 to the LRHUDA 1993 (procedure where competent landlord is not tenant’s immediate landlord) is amended as follows.

(2) In paragraph 6 (acts of competent landlord binding on other landlords), for sub-paragraph (2) substitute—

“(2) The authority given to the competent landlord by section 40(2) shall extend to receiving the whole of the price payable and, where the competent landlord does so, holding that amount for themselves and the other landlords pending determination of the matters dealt with in Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.

(2A) If the competent landlord receives the price payable, the competent landlord’s written receipt for payment of that amount is a complete discharge to the tenant.

(2B) Sub-paragraphs (2) and (2A) do not apply if the price payable is required to be paid into the tribunal by virtue of paragraph 7(2B).”

(3) In paragraph 7 (other landlords acting independently)—

(a) in sub-paragraph (1)(b), for “any amount payable to him by virtue of Schedule 13” substitute “the price payable”;

(b) omit sub-paragraph (2) and after it insert—

“(2A) Any of the other landlords may, by giving notice to the tenant and the competent landlord, require the tenant to pay into the tribunal the whole price payable and any sums payable to that other landlord under section 56(3).

(2B) The court or the appropriate tribunal may order a landlord to pay to the competent landlord the costs, or a contribution to the costs, incurred by the competent landlord in obtaining from the appropriate tribunal money that has been paid into it in compliance with a requirement imposed under sub-paragraph (2A) if—

(a) the landlord imposed the requirement, and

(b) the competent landlord shows that it was unreasonable for the landlord to impose the requirement.

(2C) The court or the appropriate tribunal may order the competent landlord to pay to a landlord the costs, or a contribution to the costs, incurred by the landlord in obtaining from the appropriate tribunal money that has been paid into it in compliance with a requirement imposed under sub-paragraph (2A) if—

(a) the landlord imposed the requirement, and

(b) the landlord shows that the requirement was imposed because of unreasonable conduct by the competent landlord.”

(4) After paragraph 9 insert—

“Entitlement to shares of the purchase price

9A (1) Any of the other landlords may apply to the appropriate tribunal for the determination of their entitlement to a share of the purchase price under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.

(2) This paragraph does not limit the power of the competent landlord to apply to the appropriate tribunal for the determination of any person’s entitlement to a share of the purchase price under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024.”

Other consequential amendments to the LRA 1967

7 The LRA 1967 is amended in accordance with paragraphs 8 to 13.

8 In section 8(1) (obligation to enfranchise), after “price” insert “payable in accordance with section 9”.

9 Omit section 9A (compensation payable in cases where right to enfranchisement arises by virtue of section 1A or 1B).

10 In section 19(10)(b) (price subject to local management scheme), for “under” substitute “in accordance with”.

11 In section 23(5)(b) (terms of extended tenancy), omit “section 9(1) and (1A) above,”.

12 In section 24(1) (application of price), for “under section 9 above” substitute “in accordance with section 9”.

13 In section 31 (ecclesiastical property)—

(a) in subsection (2)(a), after “payable” insert “in accordance with section 9 or 14A”;

(b) in subsection (3), for “under section 9 above” substitute “in accordance with section 9 or 14A”;

(c) in subsection (4)(c), for “under section 9 above” substitute “in accordance with section 9 or 14A”.

Other consequential amendments to the LRHUDA 1993

14 The LRHUDA 1993 is amended in accordance with paragraphs 15 to 29.

15 In section 13(3) (initial notice), for paragraph (d) substitute—

“(d) specify the proposed purchase price payable in accordance with section 32(1);”.

16 In section 18(2) (duty to disclose agreements)—

(a) in paragraph (a), for the words from “to the reversioner” to “for the purposes of Schedule 6” substitute “is determined in accordance with section 32(1)”;

(b) in the words after paragraph (b), for the words from “to the reversioner” to “relevant landlord” substitute “in addition to the price so determined”.

17 In section 27 (vesting orders under section 26: supplementary provision)—

(a) in subsection (3), omit “in respect of each of those interests”;

(b) in subsection (5)—

(i) in the words before paragraph (a), omit “in respect of any interest”;

(ii) in paragraph (a), for the words from “in respect of that interest” to “subsection (1)(b)” substitute “in accordance with section 32(1) if the interests referred to in subsection (1) were being acquired in pursuance of a notice under section 13”;

(iii) in paragraph (b), for “that interest” substitute “the transferor’s interest”;

(c) in subsection (6)—

(i) omit “in respect of that interest”;

(ii) omit “for the acquisition of that interest”.

18 In section 32 (determination of price)—

(a) in subsection (2), for “any such interest” substitute “the freehold or any other interest to be acquired by the nominee purchaser in accordance with this Chapter”;

(b) for subsection (5) substitute—

“(5) The nominee purchaser is to be treated for all purposes as a purchaser for valuable consideration in money or money’s worth of the freehold or other interest, even if the price payable by the nominee purchaser in accordance with section 32(1), or the share of the purchase price payable to the owner of the interest under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024, is zero or only a nominal amount.”

19 In section 39(1) (right to acquire new lease), for “a premium” substitute “the price”.

20 In section 42(3)(c) (notice to acquire new lease)—

(a) for “premium” substitute “price”;

(b) omit the words from “and, where” to the end.

21 In section 48(7) (applications where terms in dispute etc), for the words from “the premium” to “Schedule 13” substitute “the price payable in accordance with section 56(1)”.

22 In section 51 (vesting orders under section 50: supplementary provision)—

(a) in subsection (5)—

(i) in paragraph (a), for “premium which is payable under Schedule 13” substitute “price which is payable in accordance with section 56(1)”;

(ii) at the end of paragraph (a) insert “and”;

(iii) omit paragraph (b);

(b) in subsection (6), for the words from “premium” to the end substitute “price payable”.

23 In section 56 (obligation to grant new lease)—

(a) omit subsection (2);

(b) in subsection (3), for the words from “amount of any such premium” to “Schedule 13” substitute “price payable”;

(c) in subsection (4), for “7(2)” substitute “7(2A)”.

24 Omit section 66 (amendments to the LRA 1967).

25 In section 70(12) (estate management schemes)—

(a) in paragraph (b), for “under section 9” substitute “in accordance with section 9”;

(b) in paragraph (c), for “under Schedule 6 to this Act” substitute “in accordance with section 32(1)”.

26 In section 73(10) (applications for estate management schemes), for the words from the beginning to “it shall” substitute “For the purposes of Schedule 4 to the Leasehold and Freehold Reform Act 2024 as it applies in relation to an acquisition mentioned in section 69(1)(a) or (b), it is to”.

27 (1) Schedule 2 (special categories of landlords) is amended as follows.

(2) In paragraph 1 (interpretation), omit sub-paragraph (2).

(3) In paragraph 5 (trustees)—

(a) in sub-paragraph (1), for the words from “sum” to “Chapter I” substitute “share payable to the landlord, as determined under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024, of the purchase price in respect of the acquisition of the interest,”;

(b) in sub-paragraph (2)(a), for “premium” substitute “share of the price payable”.

(4) In paragraph 7 (universities and colleges)—

(a) in sub-paragraph (1), for the words from “sum” to “Chapter I” substitute “share payable to the landlord, as determined under Part 6 of Schedule 4 to the Leasehold and Freehold Reform Act 2024, of the purchase price in respect of the acquisition of the interest”;

(b) in sub-paragraph (2)(a), for “premium” substitute “share of the price payable”.

(5) In paragraph 8 (ecclesiastical landlords)—

(a) in sub-paragraph (2)(a), omit “or premium”;

(b) in sub-paragraph (3)(a)—

(i) in the words before paragraph (i), after “by way of” insert “a share of”;

(ii) in paragraph (i), for “for any interest in the property on its acquisition” substitute “in respect of the acquisition of any interest in the property”;

(iii) in paragraph (ii), for “a premium” substitute “the price payable”;

(c) in sub-paragraph (4)(b)—

(i) in the words before paragraph (i), after “by way of” insert “a share of”;

(ii) in paragraph (i), for “for any interest in property on its acquisition” substitute “in respect of the acquisition of any interest in property”;

(iii) in paragraph (ii), for “a premium” substitute “the price payable”.

28 (1) Schedule 5 (vesting orders under sections 24 and 25) is amended as follows.

(2) In paragraph 2(1) (execution of conveyance), omit “in respect of each of those interests”.

(3) In paragraph 3(1) (the appropriate sum)—

(a) in the words before paragraph (a), omit “in respect of any interest”;

(b) in paragraph (a), for “Schedule 6 in respect of that interest” substitute “section 32(1)”;

(c) in paragraph (b), for “that interest” substitute “the transferor’s interest”.

(4) In paragraph 4 (effect of payment of appropriate sum)—

(a) omit “in respect of that interest”;

(b) omit “for the acquisition of that interest”.

29 Omit Schedule 15 (section 9 of the LRA 1967 as amended by section 66).