New leasehold rules are set to become law after the final legislative amendments were agreed in the House of Lords on Monday.
The introduction of the Leasehold Reform (Ground Rent) Bill will lead to "fairer, more transparent homeownership for thousands of future leaseholders", according to a minister.
The new legislation will restrict ground rents on most newly-created long residential leases in England and Wales to a token one peppercorn per year, effectively restricting them to zero financial value.
After amendments made in the House of Commons passed the Lords without an opposition vote, the proposals are now set to go for royal assent.
Communities minister Lord Greenhalgh said: “The Bill will put an end to ground rents for most new residential leasehold properties as part of the most significant changes to property law in a generation.
“This Bill’s provisions will lead to fairer, more transparent homeownership for thousands of future leaseholders.”
According to the legislation, a breach of the ground rent restriction will be a civil offence carrying a fine of between £500 and £30,000.
The Bill also prohibits the charging of administration fees for peppercorn rents and makes provision for leaseholders to recover unlawfully charged ground rents.
It has not yet been announced when the new laws would come into force.
Liberal Democrat peer Lord Stunell warned that “unscrupulous” landlords could agree new terms with their tenants before the legislation takes effect.
Lord Stunell said he was “disappointed” the government removed a Lords amendment that would have put a “duty to inform” on landlords, so that if entering negotiations with tenants they would have to inform them of the existence of the Bill and the changes it would bring in.
Labour frontbencher Baroness Hayman of Ullock said that without Lord Stunell’s proposed change, which was not put to a vote, “the legislation remains flawed”.
Lord Greenhalgh said the government would ensure “the widest number of people are aware of the dangers and the risks of carrying out a lease extension in that window in a way that would be detrimental to their interests”.
He said the government understands the need to make sure the changes “are publicised for the good of leaseholders”, and said it is developing a “suite of communications activities from social media to encouraging the broader press to cover these changes”.
The minister said the government would also work closely with those in the industry to “raise awareness of the coming changes”.
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