Real Estate

Another year of change? How property law will evolve in 2024

Yulia Barnes is founder and managing partner of Barnes Law

2024 is set to be another significant year for the property sector, with many legislative changes, consultations and reviews underway.

As the industry continues to grow increasingly more complex, it is vital to be aware of developments and how they might affect you.

Here are some of the key upcoming changes that will see property law evolve in 2024.

The Immediate Exchange Protocol

The code for signing and exchanging property contracts is likely changing in 2024, as The Law Society is introducing a code of practice for exchange of property contracts to ensure digital transactions are made easier.

The society is consulting on the code with conveyancers and solicitors to ensure it is workable and will be widely used.

While the date and month of effect is currently unknown, the code is set to modernise the way commercial and residential property lawyers do business, save them time, and provide much-needed clarity to help them move towards exchanging digitally in a way that is fit for the 21st century.

Both sales contracts and leases will be covered by the code, and protocols on immediate exchange and release of contracts will be followed by solicitors who agree to adopt it.

Renters Reform Bill

The Queen’s Speech in 2022 committed to a Renters’ Reform Bill being passed in 2022-23.

The Bill was delayed due to disruptions caused by changes of government, but it finally arrived in the House of Commons in May 2023 after the King’s Coronation.

The wide-reaching reforms have been described by the government as a ‘once-in-a-generation overhaul’ of housing law, with changes including a ban on no-fault evictions and improving the rights of tenants to have pets.

Currently, the Renters’ Reform Bill is in the Committee stages, with no official date yet confirmed by the government. However, it is estimated that it will come into law on 1st October 2024.

Once it becomes law, the Bill will initially only affect new tenancies, and pre-existing tenancies will be included 12 months later.

The Leasehold and Freehold Reform Bill

The Leasehold and Freehold Reform Bill was introduced to Parliament on Monday 27th November. It seeks to extend tenant rights in terms of freehold enfranchisement and lease extensions by amending the existing legislation – the Leasehold Reform Act 1967 [1967 Act] and the Leasehold Reform, Housing and Urban Development Act 1993 [1993 Act].

The Bill makes it easier for leaseholders to purchase their freehold and tackle punitive service charges.

Under the reform, the standard lease extension term will be increased from 90 years to 990 years for both houses and flats, with ground rent reduced to £0, and requirements for a new leaseholder to have owned their house or flat for two years before they can extend their lease or buy their freehold will be eliminated.

In addition, the Bill will ban the sale of new leasehold houses in England and Wales, but it does not limit the sale of new leasehold flats. It will also rebalance the legal costs regime and remove barriers for leaseholders to challenge their landlords’ unreasonable charges in court.

The new rules will scrap the presumption that leaseholders pay their freeholders’ legal costs and will ensure leaseholders are protected from making payments that require no benefit or service in return and can cause issues when homeowners want to sell up.

The reform also aims to make buying or selling a leasehold property quicker and easier by setting a maximum time and fee for home buying and selling information.

It is expected that the Bill will be passed by the next general election in 2024.

Conclusion

Property is one of the most vast and complex areas of law and, while some of it is rooted in ancient laws, case law is constantly changing.

As a result, navigating this legal landscape might seem daunting.

If in doubt, it is always advisable to consult with a qualified property lawyer who can further explain the new legislation and how you may be impacted.

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