Major freeholders fail in bid to overturn leasehold reforms
A duke, an earl and the many other major freeholders who had claimed Leasehold and Freehold Reform Act 2024 infringed their human rights have arguments rejected by High Court.
A group of blue-blooded freeholders along with several other major property groups have failed in their High Court bid to ‘neuter’ last year’s leasehold reform legislation.
The freeholders including the Duke of Westminster and Earl of Cadogan, argued in the High Court that the Leasehold and Freehold Reform Act 2024 was incompatible with their human rights and infringes their right to enjoy their private property interests in leaseholders’ homes because it does not strike a ‘fair balance between them and the leaseholders’.
The six big freeholders had portfolio heft on their side, if not winning arguments; between them they control some 200,000 leasehold flats and houses.
Between them they control some 200,000 leasehold flats and houses.”
Three main areas of the act under consideration included reforming the ground rent cap as well as marriage value and the ‘costs recovery’ mechanism, changes which restrict freeholders’ ability to earn income from their estates and recover costs when leaseholders challenge decisions albeit in a one-sided way.
During a lengthy technical and wide-ranging decision document running to 169 pages, the judges rejected all three freeholders’ arguments and in each case said the arguments for reforming each key area of leaseholds was ‘robust’ and ‘balanced’.
The freeholders had also argued that the reform measures had a cumulative effect on them as well as individual, a point which was also rejected.
Inherent unfairness
“Having concluded that each of the three reforms represented a fair and proportionate means of addressing different aspects of the unfairness inherent in the leasehold model of property ownership, and that none had the effect that the particular element of the total amount payable to a landlord on enfranchisement ceased to be reasonably related to market value, we are satisfied that the claimants are no better placed by asking the court to consider the cumulative effects of the three measures in [human rights legislation] terms than in considering them in isolation,” the judgement says.
“We conclude that the measures under challenge, the Ground Rent Cap, the Marriage Value Reform and the Costs Recovery Reform, whether considered individually or cumulatively, including their application to charities, are compatible with [human rights legislation]. Accordingly, each of the claims is dismissed.”
