Lease Extensions and The Building Safety Act 2022

As a consequence of the Grenfell Tower tragedy and the recommendations from the independent review of Building Regulations and Fire Safety by Dame Judith Hackitt, the Building Safety Act 2022 (the BSA) received Royal Assent in April 2022.

The BSA focuses on the safety standards of all buildings, including historical buildings, new buildings, and buildings currently in construction, with the aim of assuring the safety of high-risk buildings and providing protecting to leaseholders who occupy these buildings.

For leaseholders to benefit from the statutory protections offered by the BSA, their lease will need to be classed as a qualifying lease making them a qualifying leaseholder. A qualifying lease under S119 (2) of the BSA requires the following criteria to be met:

• It is a long lease (more than 21 years in length) of a single dwelling within a building of above 11 metres or at least five storeys
• The leaseholder is responsible for paying a service charge
• The lease was granted before the 14 February 2022
• On 14 February 2022 the dwelling in question was the only or main residence, and the leaseholder did not own more than 3 dwellings in the United Kingdom

However due to drafting errors, leaseholders are experiencing issues when faced with the decision of extending their lease. When a lease is extended, the existing lease will be surrendered and a new lease will be granted, thus providing the leaseholder with a longer lease term.

The problem arises unfortunately, when the new lease is dated after the 14th February 2022, resulting in the new lease failing to meet the necessary criteria mentioned above, and consequently the leaseholder losing their qualifying status under the BSA.

This therefore leaves leaseholders and practitioners in limbo giving residents the choice between a short lease that meets the criteria set out in S119 of the BSA, or a longer lease that falls outside of the BSA.

Whilst concern grows, reform maybe in sight, as the above-mentioned issue was acknowledged during a debate in the House of Lords on 2nd May earlier this year. It is understood that although timescales are uncertain given that the bill will not arrive in Parliament for pre-legislative scrutiny until Parliaments next Session, which begins in the Autumn according to Baroness Scott.

If you are considering renewing your lease prior to the next session of Parliament, and would like some guidance on your options, please do not hesitate to contact our lease extension expert Jake Mowatt who can advise you further.