The Leasehold and Freehold Reform Act 2024 received Royal Assent in May 2024, representing the most significant reform to leasehold law in England and Wales for over two decades. While many provisions are still coming into force via secondary legislation, property managers need to understand what's changing and how it affects their operations.
### 1. Lease Extension Made Easier
The Act removes the two-year ownership requirement before leaseholders can extend their lease. Previously, new leaseholders had to wait two years before being eligible for a statutory lease extension.
Impact for property managers: New leaseholders may request lease extensions sooner. Managing agents and RTM companies should be aware this may affect block finances if ground rents are involved.
### 2. Ground Rent Restrictions
The Act builds on the Leasehold Reform (Ground Rent) Act 2022 by extending restrictions on ground rents. Zero ground rent provisions now apply more broadly.
Impact for property managers: Review any existing ground rent collection processes. Charging prohibited ground rents carries significant penalties.
### 3. Service Charge Transparency
The Act strengthens leaseholders' rights to information about service charges, including:
Impact for property managers: Expect increased scrutiny of service charge accounts. Using software that produces clear, transparent accounts is more important than ever.
### 4. Right to Manage Improvements
The Act makes RTM easier to acquire by:
Impact for property managers: More buildings will qualify for RTM. Managing agents should expect more leaseholders to explore self-management.
### 5. Building Safety Act Integration
The Act aligns with the Building Safety Act 2022, strengthening protections for leaseholders in buildings with fire safety defects.
Impact for property managers: Managing agents and RTM companies must ensure they are compliant with Building Safety Act requirements, particularly for buildings over 11 metres.
Not all provisions of the Act are yet in force. Secondary legislation is still being developed for:
Property managers should monitor updates from DLUHC (Department for Levelling Up, Housing and Communities) and professional bodies such as RICS and ARMA.
1. Review your service charge accounting processes
With greater scrutiny coming, now is the time to ensure your accounts are transparent, timely, and properly presented. Software like PropLinker produces accounts in a clear format that can be shared directly with leaseholders.
2. Check your Section 20 consultation procedures
The Act may bring changes to major works consultation. Ensure your procedures are up to date.
3. Understand RTM implications
If you manage blocks where leaseholders might exercise RTM, understand the process and what happens to existing management contracts.
4. Stay informed
Join industry bodies such as ARMA (Association of Residential Managing Agents) or IRPM (Institute of Residential Property Management) to receive updates as secondary legislation is introduced.
For RTM companies, the 2024 Act is broadly positive. The relaxation of qualifying criteria means more buildings can self-manage, and the increased service charge transparency requirements align with the best practices that well-run RTM companies already follow.
The Act reinforces the direction of travel: leaseholders having more rights, more information, and more control over their buildings.
The Leasehold and Freehold Reform Act 2024 is a significant but evolving piece of legislation. Property managers — whether professional agents or volunteer RTM directors — need to keep up with the changes as they come into force.
The core principle is clear: service charge transparency and leaseholder rights are being strengthened. Managing agents and RTM companies that already operate to a high standard of transparency have little to fear — and much to gain from leaseholders who trust their management.
PropLinker is designed to help property managers meet these transparency standards, with clear financial reporting and direct leaseholder communication built in.
PropLinker handles service charges, GoCardless payments and accounting — built for UK RTM companies.