More than three million leaseholders will gain stronger rights over service charges from April next year as the government begins implementing the Leasehold and Freehold Reform Act 2024.
From 1 April 2027, freeholders will no longer have the automatic right to pass on their legal costs to leaseholders who challenge service charges.
Instead, freeholders will need approval from a court or tribunal before recovering those costs.
Leaseholders will also gain a new right to seek recovery of their own legal expenses.
They will also have the right to request more information about their service charges, including details relating to previous years.
Freeholders will need a valid reason to refuse requests for information about how buildings are managed, maintained, repaired and insured.
A further tranche of reforms will take effect from 1 November 2027.
Leaseholders will automatically receive more detailed information about service charges, building insurance and administration fees, whether their building is owned by a private freeholder, council or housing association.
Private freeholders will also be required to use standardised service charge demand forms and provide financial accounts and annual reports setting out how leaseholders’ money has been spent.
Councils and housing associations will be required to provide the same standardised service charge demands, accounts and annual reports from 1 November 2028.
Further reforms are planned through the Commonhold and Leasehold Reform Bill, which is due to be introduced in Parliament before Christmas.
Housing minister Matthew Pennycook says: “Rapidly escalating and frequently opaque service charges are placing huge financial strain on hard-pressed leaseholders across the country.
“Today, we’re acting to protect them by introducing regulations that will improve the fairness and transparency of service charges so that unreasonable increases can be more easily challenged.”
Leasehold Advisory Service chief executive Kion Ahadi says: “Service charges are the most common issue leaseholders contact us about.
“Better access to that information and stronger protection from landlords’
