Millions of leaseholders backed with strengthened rights and protections against excessive service charges
|
Leaseholders to be better protected and more able to
challenge excessive service charges to address cost of living
concerns New reforms proposed to protect leaseholders from large
and unexpected bills, and mandate qualifications for managing
agents who manage the day-to-day running of a building Reforms will
scrap the presumption that leaseholders have to pay their
landlords' litigation costs – even when they win their case – when
service charges are challenged...Request free trial
Millions of leaseholders will receive stronger rights, powers and protections to better challenge extortionate service charges thanks to major reforms to the feudal leasehold system. Leaseholders are required to pay a service charge to cover the upkeep of shared areas in their building, however in too many cases they are left facing very unclear and unaffordable fees. By switching on measures in the Leasehold and Freehold Reform Act 2024, almost five million leaseholders in England and Wales will receive the transparency they need to hold their landlords to account and easily challenge these costs. Leaseholders will receive standardised service charge documentation, which will spell out clear and detailed information about how their service charges are calculated and spent. This will make it easier for them to challenge unreasonable bills and potentially save money where expenses are unjustified, with further reforms to stop them having to automatically pay for landlords' litigation costs even where they have won their case. Housing and Planning Minister, Matthew Pennycook said: “The cost of living remains a pressing concern for leaseholders and many are struggling financially as a result of high and rising service charges, and other opaque and excessive leasehold costs. “This bold package of reforms will arm leaseholders with greater rights and protections and empower them to challenge poor practice and unreasonable charges and fees – driving up leaseholder living standards as we work to bring the feudal leasehold system to an end as part of our Plan for Change”. Demands for service charges are currently only required by law to include a limited amount of details, which can leave leaseholders in the dark over what services or works make up their bill. This can leave leaseholders at risk of being overcharged for poor quality work, or out of pocket for work that has not been carried out in some of the worst cases, on top of existing cost of living pressures. The government is today (Friday) pushing ahead to implement these reforms and is consulting over the best way forward to ensure they are robust, workable and protect leaseholders effectively. Queries about service charges accounted for one in three of all enquiries to the Leasehold Advisory Service (LEASE) last year, showing the need for the government to act and drive-up transparency. Further reforms – in addition to measures in the Act – will see the Section 20 ‘major works' process improved to ensure leaseholders are not hit by one-off, unexpected and very large bills with little or no notice as is the case currently. LEASE will shortly be publishing an insight report into the challenges currently experienced by leaseholders going through this process. Other measures will give leaseholders the power to demand a switch or veto a landlord's choice of managing agent and introduce mandatory qualifications for the role to stamp out bad practice in line with Lord Best's 2019 recommendations. This reform will ensure all managing agents have the knowledge and skills they need to do their jobs effectively, and put an end to leaseholders and residential freeholders suffering abuse and poor service. These reforms will help drive up living standards in our Plan for Change and complement work to bring the feudal leasehold system to an end and make commonhold the default for new flats, ahead of publication of a draft Leasehold and Commonhold Reform Bill later this year. Key points being consulted on:
ENDS Notes to editors:
|