The Effects of The Building Safety Act 2022 on Lease Extensions - Jonathan Lea Network

The Effects of The Building Safety Act 2022 on Lease Extensions

When the Building Safety Act 2022 came into force on 28 June 2022, we presumed that it would have little effect on the specialist area of enfranchisement and lease extensions.  However, there was a defect in the legislation which means that for leaseholders extending their lease after the 14 February 2022, if their existing lease gave them the benefit of the protections of the Act, these would be lost when entering into a lease extension.

The protections are that the leaseholders are protected from having to pay excessively high bills to remedy defects in any relevant buildings (i.e. cladding or fire safety issues) and that the developers must be responsible for the costs of remedying any defects.

The Government have confirmed that this defect was not intended and they will legislate to remedy the defect.  However, in the meantime they are strongly recommending (but cannot enforce) that freeholders contract around the problem to ensure that leaseholders retain their protections when extending their leases.

For a leaseholder of a “relevant building” (which is a building of at least 11 meters high or at least five storeys high), we would look to include a provision in the lease extension that they will remain a “qualifying leaseholder” for the purposes of the Building Safety Act, although, as stated above, the freeholder would need to agree this amendment or the leaseholder would have to look to the First-Tier Tribunal (FTT) to enforce it.

This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited 2023. 

About Jonathan Lea

Jonathan is a specialist business law solicitor who has been practising for over 18 years, starting at the top international City firms before then spending some time at a couple of smaller practices. In 2013 he started working on a self-employed basis as a consultant solicitor, while in 2019 The Jonathan Lea Network became a SRA regulated law firm itself after Jonathan got tired of spending all day referring clients and work to other law firms.

The Jonathan Lea Network is now a full service firm of solicitors that employs senior and junior solicitors, trainee solicitors, paralegals and administration staff who all work from a modern open plan office in Haywards Heath. This close-knit retained team is enhanced by a trusted network of specialist consultant solicitors who work remotely and, where relevant, combine seamlessly with the central team.

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