As part of the Leasehold and Freehold Reform Act 2024, this is expected to create transparency for around five million leaseholders in England and Wales, enabling them to hold landlords to account and dispute charges.
With the standardised documentation, the government said leaseholders could save money where expenses were unjustified and avoid automatically paying for landlords’ litigation costs even where they have won their case.
Currently, demands for service charges are only required to have limited information, which can lead to leaseholders paying for poor-quality work or work that has not been completed.
Other measures include giving leaseholders the power to demand a switch or veto a landlord’s choice of managing agent and introduce mandatory qualifications for the role to get rid of bad practice.
This reform should ensure that managing agents have the knowledge and skills to fulfil their roles and stop leaseholders from suffering abuse and poor service.
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The government said these changes would improve living standards and work alongside plans to end the leasehold system and make commonhold the default for flats, ahead of the publication of a draft Leasehold and Commonhold Reform Bill later this year.
Further, the government is consulting on improving transparency around buildings insurance and reforming the Section 20 ‘major works’ procedure that leaseholders must go through when they face large bills for such works.
Matthew Pennycook, housing and planning minister, 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.”
