The government has confirmed plans to introduce new rules aimed at improving transparency over service charges and strengthening protections for leaseholders.
The measures, to be implemented from 2027 under the Leasehold and Freehold Reform Act 2024, will require landlords to provide clearer information about how service charges are calculated and spent.
The reforms include a mandatory annual report on the condition of a building and planned major works, a standardised service charge demand form, and new rights for leaseholders to challenge costs.
Leaseholders will also be able to request information such as fire safety documents and maintenance invoices dating back up to six years, with landlords required to respond within set timescales.
The government said the changes are intended to improve transparency, reduce unfair costs and give leaseholders greater oversight of the charges they pay.
Housing minister, Matthew Pennycook, 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.”
In addition, two further public consultations have launched today to drive forward enfranchisement reforms – marking the next step in making it easier for leaseholders to extend their lease or buy their freehold.
They will explore plans to set specific valuation rates in regulations, reducing disputes over costs and giving leaseholders greater certainty about the price they will pay to enfranchise, as well as protect leaseholders from covering their landlord’s solicitor, valuer or administrative fees when going through the process.
Together, this will create a clearer system that helps more people secure their home for the long term and have greater control over where they live.
The measures set out today will be implemented as soon as possible and will complement the upcoming Commonhold and Leasehold Reform Bill, which will overhaul home ownership, ban leasehold for new flats and cap ground rents at £250.
Jo Ironside, partner at Mayo Wynne Baxter, commented: “The proposed reforms are likely to be welcomed by many leaseholders, but they also represent a significant shift in expectations for landlords and managing agents.
“From a landlord’s perspective, the priority should be preparing for a more transparent operating environment.
“The requirement to provide annual reports on building condition, detailed service charge demands and access to supporting documentation such as maintenance invoices means landlords will need robust record-keeping, stronger governance procedures and clear audit trails for expenditure decisions.
“In practice, landlords should be reviewing service charge budgets, procurement processes, contractor arrangements and document management systems before the reforms come into force.
“Landlords who can demonstrate value for money and justify expenditure decisions will be in a stronger position when faced with leaseholder scrutiny or potential disputes.
“The reforms around legal costs are particularly important, as landlords may no longer be able to rely on leaseholders automatically bearing the financial burden of challenges, increasing the need for reasonable and evidence-based decision making from the outset.
“The changes should help raise standards across the sector and encourage a more professional and transparent relationship between landlords and leaseholders.
“There remains, however, a concern around implementation.
“Compliance obligations could be particularly burdensome for smaller freeholders and resident-led management companies, so further guidance on practical compliance requirements would be helpful.
“While greater transparency is undoubtedly positive, the success of the reforms will ultimately depend on achieving the right balance between leaseholder protection and ensuring landlords can continue to manage buildings efficiently and cost effectively.”
