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Thousands sign petition against service charge abuse

  • 15/04/2024
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Thousands sign petition against service charge abuse
Thousands of people have signed a petition against excessive service charges, meaning a government response on the issue could be imminent.

The petition has had over 9,000 signatures, fewer than a thousand shy of the 10,000 threshold required to get a government reply.

Suzanne Muna from the Social Housing Action Campaign (SHAC) created the petition, which hopes to introduce a new legal body to regulate private and council service charges.

The body will also have the power to dish out penalties to any non-complying property owners.

In it, she writes that a regulator should also provide free support to people who want to dispute charges.


‘Scandal of service charge abuse’

Muna wrote: “We believe there is a scandal of service charge abuse in the housing sector; with extortionate annual rises in service costs, far exceeding inflation, and charges for services that have not, or could not, be provided.”

“Service charge abuse can cause immense financial strain, as well as emotional and physical damage to people who pay their charges directly. It also creates indirect costs for taxpayers when charges are paid via benefits.”

If the petition garners 100,000 signatures, the issue can be debated in Parliament.

As it stands, some property owners cap their service charge at 5% plus the rate of inflation, but this isn’t something they are legally required to do.


What is a service charge?

The fee is paid by a leaseholder to a landlord and covers a range of costs the owner needs to do for the property. These can range from cleaning costs to garden maintenance and various insurances.

The landlord must enlist these in the tenancy agreement and, as long as the fees are included, landlords can charge whatever they want.

Meanwhile, service charges have shot up in recent years. On average, service charges for flats in England and Wales have surged by 52% since 2018, mostly due to additional fire safety measures since the Grenfell Tower block fire in 2017.


Leasehold and Freehold Reforms Bill

In a bid to address unfair charge amounts, Michael Gove helped create a Leasehold and Freehold Reforms Bill.

The Bill from the Department for Levelling Up, Housing and Communities (DLUHC) has since been introduced to Parliament and is awaiting its final amendments before being implemented.

Measures in the bill include greater transparency over service charges, plus measures to make it easier for people to extend their lease or buy their freehold. It also aims to extend the standard lease extension term to 990 years for houses and flats.

If the bill passes, leaseholders will no longer have to forfeit their home if they owe as little as £350, as is the case with the current law.

Also, leasehold houses would be banned, with more opportunities for leaseholders to purchase their freehold in the future also being part of the mooted reforms.

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