The Levelling-up and Regeneration Act 2023 will introduce a change to the definition of "qualifying lease" in the Building Safety Act 2022

The Levelling-up and Regeneration Act 2023 received royal assent on 26 October 2023. When it comes into force, section 243 will insert a new section 119A into The Building Safety Act 2022 (the BSA). 

To meet the current definition of “qualifying lease” in the BSA a lease must have been granted on or before 14 February 2022. On a lease extension, whether statutory or voluntary, the current lease is surrendered and a new lease granted. The practical, and clearly unintended consequence of the current “qualifying lease” definition is that it excludes those new extended leases from qualifying for the raft of service charge protections the BSA offers to qualifying leaseholders. 

In April 2023 Government acknowledged the issue and stated that they were looking to resolve the issue “as soon as Parliamentary time allows". The Government has used The Levelling-up and Regeneration Act 2023 to deal with this issue. 

The new section 119A of the BSA states as follows: 

“A qualifying lease varied, or subject to any surrender and regrant, remains a qualifying lease”. It further states “This section has effect in relation to any qualifying lease varied, or subject to any surrender and regrant, before the coming into force of this section” 

The effect of the section is that where a lease, which falls within the current definition of “qualifying lease” in the BSA, is extended or indeed has already been extended it will not lose its qualifying status under the BSA. It is important to note its retrospective effect here.