The government has confirmed leaseholders will be given clearer information about service charges and stronger protections against unfair costs, in reforms set out in the Leasehold and Freehold Reform Act 2024 (LFRA).
Following consultation with leaseholders, landlords and industry groups, the government will proceed with a series of measures to increase transparency around service charge costs.
The changes, set to come into force from 2027, include a requirement for landlords to provide leaseholders with an annual report detailing the health and condition of their building and any plans for major works.
A new service charge demand form will set out detailed information about service charge payments and what they will cover. When disputes arise, such as over service charges, leaseholders will be protected from having to pay landlord’s legal bills without challenge, and can apply to recover their own costs.
Landlords will also need to provide certain building information on request, such as fire safety information and invoices for maintenance works, going back up to six years and with clear timeframes for responses.
Housing minister Matthew Pennycook said: “We are acting to enable more existing leaseholders to take control of their buildings and more easily convert to commonhold as and when they judge the time is right for them, and we are strengthening protections for existing leaseholders in the here and now by driving up service charge transparency and rebalancing legal costs so that leaseholders are empowered to challenge unreasonable charges.”
Public consultations launched this week on leasehold enfranchisement valuation rates and leasehold enfranchisement process costs aim to make it easier for leaseholders to extend their lease or buy their freehold.
The measures will be implemented “as soon as possible”, the government said, and will complement the upcoming Commonhold and Leasehold Reform Bill, which overhaul home ownership, ban leasehold for new flats and cap ground rents at £250.
