Government announces new protections to help leaseholders challenge service charges

More than three million leaseholders will gain stronger rights to challenge unfair service charges.

The government has announced, from 1^st April next year, leaseholders will have new powers to demand information about their service charges, making it easier to see what they are paying for and why.

They will also be able to request information from previous years, with landlords required to give a valid reason if they refuse.

From the same date, leaseholders will receive greater protection against being forced to pay their landlord’s legal costs when challenging a service charge.

Won’t leave existing leaseholders behind

The government says the changes will remove a major barrier to challenging unfair charges by preventing landlords from passing on their legal fees to leaseholders, whether they win or lose their case.

Landlords will need court or tribunal approval to pass on any legal costs to leaseholders and, leaseholders will get the new right to claw back their own legal expenses too.

Prime Minister Andy Burnham said: “It is simply wrong that millions of leaseholders can be hit with unfair charges, then face another bill just for challenging them. That isn’t right, and where we can act quickly to change it, we will.

“Today’s changes are only the beginning. We’re giving leaseholders stronger rights now, while we press ahead with the bigger reforms needed to put power back in homeowners’ hands and end the feudal leasehold system for good.”

Housing Minister Matthew Pennycook MP said: “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.

“As we work to dismantle the feudal leasehold system in this Parliament, we won’t leave existing leaseholders behind.”

Additional requirements for landlords

The government has also announced that, from November 2027, leaseholders will automatically receive clearer information about the charges they are being asked to pay, regardless of whether their building is owned by a private landlord, council or housing association.

This will include detailed information about the building insurance they contribute towards, alongside stronger protections against excessive or unreasonable fees for arranging and managing insurance. Leaseholders will also receive a clear breakdown of any administration fees they may be charged.

Private landlords will face additional requirements, including using simpler, standardised service charge demand forms and providing financial accounts and annual reports.

From 1 November 2028, councils and housing associations will also be required to provide leaseholders with the new standardised service charge demand forms, financial accounts and annual reports.