Legal challenge begins against leasehold reforms

Major landowners and freeholders have begun a legal challenge to the Government’s leasehold reforms.

Nine freeholders and landowners, including the ARC Time Freehold Income Authorised Fund, The Cadogan and Grosvenor Group, Long Harbour, Albanwise Wallace, John Lyon’s Charity and The Portal Trust are calling for a judicial review of the changes.

Between them, the claimants own the freehold interest in more than 390,000 leasehold flats and houses across England and Wales.

This includes the Duke of Westminster’s Grosvenor Estate and the Earl of Cadogan’s Cadogan Estates.

A four day hearing in the Divisional Court started yesterday and will consider calls for a judicial review.

The claimants are arguing that some of the leasehold reforms impact their human rights.

The group is challenging the removal of the requirement on leaseholders with leases of less than 80 years to pay 50% of the marriage value to the freeholder.

They are also challenging the exclusion of ground rents of more than 0.1% of the freehold vacant possession value from being included in the calculation of the price payable for a lease extension and are unhappy with the removal of the requirement for the leaseholder to pay the freeholder’s costs of an extension.

Leasehold activists are not happy with the claim, unsurprisingly, especially as many of those involved are wealthy landowners.

The Leasehold Knowledge Partnership warned that the court process will be “expensive and long drawn out,” warning that there will be no real progress on leasehold reform until this case is resolved.

The National Leasehold Campaign said in a statement:

“Whilst the lawyers fight this out in the courtroom, leaseholders are nervously awaiting the outcome. There is a real human impact that cannot be underestimated. Time will tell if justice will be served, but in the meantime, leaseholders remain in a state of limbo, trapped by this iniquitous system, with no way out. This really is a David vs Goliath battle.

For too many years, leaseholders have been exploited by feudal leasehold laws which are not fit for the 21st century. It cannot go on. The current status quo must not be maintained, and this is the opportunity for meaningful change. Leaseholders deserve better.”

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