Leasehold Reform (Ground Rent) Act 2022

6 Permitted rent: leases replacing pre-commencement leases

(1) This section applies where—

(a) the tenant under a pre-commencement lease is granted a new lease (a “replacement lease”) of premises which consist of, or include, some or all of the premises demised by the pre-commencement lease,

(b) the term of the replacement lease begins before the end of the term of the pre-commencement lease, and

(c) the replacement lease is a regulated lease.

(2) The permitted rent under the replacement lease is—

(a) in respect of the excepted period, a rent not exceeding the rent that would have been payable under the pre-commencement lease in respect of that period;

(b) in respect of the regulated period (if any), a peppercorn rent.

(3) The “excepted period” is the period which—

(a) begins with the first day of the term of the replacement lease, and

(b) ends with the last day of the term of the pre-commencement lease.

(4) The “regulated period” is the period which—

(a) begins immediately after the excepted period, and

(b) ends with the last day of the term of the replacement lease.

(5) Where—

(a) the tenant under a lease to which subsection (2) applies is granted a new lease of premises which consist of, or include, some or all of the premises demised by that lease,

(b) the term of the new lease begins before the end of the term of the pre-commencement lease, and

(c) the new lease is a regulated lease,

subsections (2) to (4) apply to the new lease, reading references to the replacement lease as references to the new lease.

(6) Where the pre-commencement lease is a relevant shared ownership lease, subsection (2)(a) applies as if after “payable” there were inserted “in respect of the tenant’s share in the demised premises”.

(7) Where a lease to which subsection (2) applies is a relevant shared ownership lease—

(a) that subsection applies as if after “replacement lease” there were inserted “in respect of the tenant’s share in the demised premises”, and

(b) the permitted rent in respect of the landlord’s share in the demised premises is any rent.

(8) In this section—

(a) “pre-commencement lease” means a long lease of a dwelling which is granted before the day which is the relevant commencement day in relation to the replacement lease;

(b) references to the end of the term of the pre-commencement lease are to what would have been the end of the term of the pre-commencement lease if the replacement lease had not been granted.

(9) Section 5(3) to (7) applies for the purposes of this section.