Landlords to be “held to account” – Government announces consultation on the Leasehold and Freehold Reform Act 2024
The Government has today announced a wide-ranging consultation on proposals to strengthen leaseholder protections and hold residential landlords and managing agents to account.
The extensive consultation includes 205 questions about measures in the Leasehold and Freehold Reform Act 2024 (“LAFRA 2024”), as well as proposals beyond the scope of those already in the LAFRA 2024.
The Government’s clear aim is to increase protection for leaseholders by improving fairness and transparency in the calculation of service charge demands, regulating unscrupulous managing agents and empowering leaseholders to challenge poor practice and unreasonable fees.
Key proposals include:-
- Standardised service charge demands and accounts
- An annual report setting out what leaseholders are paying for and providing key information for the year ahead, including advanced notice of planned major works
- An advance service charge demand at the beginning of the accounting year, followed by a standard interim service charge demand six months into the year
- The introduction of a “future demand notice” giving warning of future costs and when the bill might arrive
- Better information on buildings insurance
- Changes to the s.20 consultation procedure on major works
- Further restrictions on landlords’ ability to recover legal costs from leaseholders in Tribunal proceedings, even when there is a cost recovery clause in the lease
- The ability for leaseholders to apply to recover their legal costs of Tribunal proceedings from their landlord
- Better regulation of managing agents, including mandatory qualifications
It appears that many of the proposals would override express provisions in leases concerning the way in which service charges are demanded and the recovery of costs, rendering these clauses obsolete.
Whilst the Government recognises that buildings must be properly maintained (and that to do so landlords must be able to recover service charges from leaseholders) there is no doubt that these new proposals would tip the balance of power firmly in favour of leaseholders.
The consultation is open until 26 September 2025.
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