Leasehold: Fees and Charges
The question
To ask the Secretary of State for Housing, Communities and Local Government, if she will take steps to ensure that annual increases in fees paid by leaseholders to management are capped in line with inflation.
Answered by Matthew Pennycook
The level of service charge that leaseholders pay depends on many factors, including the terms of a lease, and the age and condition of a building. As a result, the cost of repairs, maintenance of common areas, and management fees vary considerably. Placing a cap on service charge increases would not only be complex but could prove detrimental to the interests of leaseholders, including those who have collectively enfranchised, by preventing sufficient funds being raised to manage and maintain their buildings effectively. As such, the Government have no plans to implement one.
By law variable service charges must be reasonable and, where costs relate to works or services, the works or services must be of a reasonable standard. Should leaseholders wish to contest the reasonableness of their service charges they may make an application to the appropriate tribunal.
The Government will act quickly to provide homeowners with greater rights, powers, and protections over their homes by implementing the provisions of the Leasehold and Freehold Reform Act 2024, including those designed to increase service charge transparency and to rebalance the legal costs regime and remove barriers for leaseholders to challenge their landlord.
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