As part of the previous government’s Leasehold and Freehold Reform Act, leaseholders will be able to see what they are being charged for, how service charges are being spent and challenge unfair costs.
Landlords will be required to give leaseholders an annual report on the condition of their building and plans for major works, and leaseholders will be given a new service charge demand form, detailing payments and what they cover.
Where there are disputes, leaseholders will be protected from covering their landlords’ legal bills without challenge and be able to apply to recover their own costs.
Landlords will be required to provide certain building information on request, such as fire safety information and invoices for maintenance works.
The changes could come into effect as soon as next year.
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Matthew Pennycook, housing minister, said: “As we bring the feudal leasehold system to an end and move towards a commonhold future, existing leaseholders will not be left behind.
“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.”
The government said the changes would complement the upcoming Commonhold and Leasehold Reform Bill, which includes measures such as a ban on new leasehold flats and a £250 cap on ground rents.
This week, the Housing Committee urged the government to publish the final draft of the Commonhold and Leasehold Reform Bill by autumn, despite failing to respond to its report on the draft bill by the set deadline.
