Ground Rent

Department for Levelling Up, Housing and Communities written question – answered on 22nd November 2021.

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Photo of Theresa Villiers Theresa Villiers Conservative, Chipping Barnet

To ask the Secretary of State for Levelling Up, Housing and Communities, what assessment he has made of the potential effect of abolishing ground rents on the effectiveness of the Building Safety Bill in ensuring accountability for building safety.

Photo of Theresa Villiers Theresa Villiers Conservative, Chipping Barnet

To ask the Secretary of State for Levelling Up, Housing and Communities, what assessment he has made of the potential impact of the abolition of ground rents on leaseholders' ability to ensure that building owners take responsibility for (a) building safety and (b) responding effectively to fire safety problems.

Photo of Eddie Hughes Eddie Hughes Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

The Leasehold Reform (Ground Rent) Bill currently in Parliament will put an end to ground rents for new residential leasehold properties as part of the most significant changes to property law in a generation. The Bill's provisions will lead to fairer, more transparent homeownership for thousands of future leaseholders. Leaseholders pay ground rent on top of their property purchase price and service charges, yet there's no clear service provided in return.

The Ground Rent Bill is focused entirely on the issue of ground rents. The role of ensuring that the fabric of the building is maintained and safe for residents is an essential part of the relationship between freeholder, leaseholder and in some cases a managing agent. The cost of complying with these obligations is usually recoverable from the leaseholders through the service charge fund. In most cases the lease will allow the freeholder to recover the actual costs of the works, and the freeholder may also pass on the cost of managing or overseeing the works.

The Government is committed to bringing about the biggest improvement in building and fire safety for a generation. The Building Safety Bill contains measures to protect leaseholders by providing a legal requirement for building owners to prove they have tried all routes to cover the cost of essential safety works, along with evidence that this has been done. If this does not happen, leaseholders will be able to challenge these costs in the courts.

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