Part 1Leasehold houses

Regulation of permitted leases

10Permitted leases: transaction warning conditions

1

A person may not, on or after the day on which section 1 comes into force—

a

enter into an agreement to grant a permitted lease unless the transaction warning conditions are met in relation to the agreement, or

b

subject to subsection (5), grant a permitted lease unless the transaction warning conditions are met in relation to the lease.

2

The “transaction warning conditions” are as follows—

a

at least 7 days before the relevant date the grantor must give a warning notice relating to the permitted lease—

i

to the proposed tenant, or

ii

where there is more than one proposed tenant, to each of them;

b

a notice of receipt of the warning notice must be given to the grantor—

i

by the proposed tenant, or

ii

where there is more than one proposed tenant, jointly by all of the proposed tenants;

c

a reference to the warning notice and the notice of receipt must be included in or endorsed on the relevant instrument in the specified manner.

3

A “warning notice” is a notice provided in a specified form and manner and containing—

a

sufficient information to identify the house to be comprised in the lease,

b

if the lease falls within Part 1 of Schedule 1, a copy of the permitted lease certificate,

c

if the lease falls into one or more of the categories set out in Part 2 of Schedule 1, a statement identifying that category or those categories,

d

if both paragraphs (b) and (c) apply to the lease, the information required under both those paragraphs, and

e

such other information as may be specified.

4

A “notice of receipt” is a notice provided in a specified form and manner and containing such information as may be specified.

5

A person does not breach subsection (1) in relation to the grant of a lease if—

a

the person previously entered into an agreement to grant that lease,

b

the transaction warning conditions were met in relation to that agreement, and

c

a reference to the warning notice and the notice of receipt relating to that agreement is included in or endorsed on the instrument creating the lease.

6

This section does not apply to the grant of a permitted lease which falls within paragraph 6 of Schedule 1 (leases agreed before commencement).

7

This section does not affect—

a

the validity of a lease granted in breach of subsection (1), and does not affect the powers of a person to grant such a lease (whether under section 23(1) of the Land Registration Act 2002 or otherwise);

b

any contractual rights of a party to an agreement entered into in breach of subsection (1).

8

In this section—

  • “grantor”, in relation to a lease, means the person proposing to grant the lease (whether or not that person holds the freehold or leasehold title out of which the lease will be granted);

  • “proposed tenant”, in relation to a lease, means the proposed tenant of the house to be comprised in the lease;

  • “relevant date” means—

    1. a

      in the case of an agreement to grant a lease, the day on which the agreement is entered into, and

    2. b

      in the case of a grant of a lease, the day on which the lease is granted;

  • “relevant instrument” means—

    1. a

      in the case of an agreement to grant a lease, that agreement, and

    2. b

      in the case of a grant of a lease, the instrument creating that lease;

  • “specified” means specified or described in regulations made—

    1. a

      in relation to a lease of a house in England, by the Secretary of State;

    2. b

      in relation to a lease of a house in Wales, by the Welsh Ministers.

9

A statutory instrument containing regulations under this section is subject to the negative procedure.