The leaseholder protection provisions of the Building Safety Act 2022 ("the BSA") have attracted a vast amount of criticism. In particular, the concept of "qualifying leases". This provision compounded the complexity of the BSA by confirming that if a leaseholder owns a qualifying lease, they benefit from the leasehold protection provisions – including being exempt from paying some categories of service charge relating to building safety defects. To be a qualifying lease, among other things, the lease must have been granted before 14 February 2022.

The issue that the BSA created here was that leases that were extended voluntarily by agreement with the landlord, or through the exercise of statutory rights under Leasehold Reform, Housing and Urban Development Act 1993, it would no longer be a qualifying lease if the extension completed after 14 February 2022.

Not only did this leave the leaseholder potentially liable for large service charge costs (where applicable), it proved to prejudice their position to be able to sell the property.

The Levelling Up and Regeneration Act 2023 became law on 26 October 2023. It provided new sections 119(3A) and 119A to the Building Safety Act 2022, which solves the lease extension problem by ensuring that a "connected replacement lease" will also be a qualifying lease. This provision is retrospective, so will be treated as if it were enforceable on 28 June 2022 (the date s.119 of the BSA came into force).

A connected replacement lease is a new lease, where the tenant is required to pay a service charge, granted on or after 14 February 2022 which replaces another lease which is a qualifying lease, or other leases where at least one lease is qualifying. In order for the new lease to replace the existing lease, the term of the new lease must begin at the end of the term of the existing lease, or the term of the new lease must begin during the term of the existing lease. There is also a requirement for continuity in the property that is let, which means that the property that is let must be the same as the property that is already let, with the exception of additional or reduced property or if a new lease rectifies an error in the lease that is replaced.

Despite the new definitions being less than straightforward, this amendment is a welcome change for leaseholders who were concerned about their position.

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