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Freehold: Fees and Charges

Ministry of Housing, Communities and Local Government written question – answered on 18th February 2020.

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Photo of John Healey John Healey Shadow Secretary of State for Housing

To ask the Secretary of State for Housing, Communities and Local Government, when he plans to bring forward legislative proposals to protect freeholders against service charges and other fees and charges.

Photo of Christopher Pincher Christopher Pincher Minister of State (Housing, Communities and Local Government)

The Government is committed to promoting fairness and transparency for homeowners and ensuring that consumers are protected from abuse and poor service. The Government is aware that homeowners could be subject to a possession order or the granting of a lease of their home by the rentcharge owner over rentcharge arrears. As part of our leasehold reform work, we are moving forward with legislation to repeal Section 121 of the Law of Property Act 1925 to ensure homeowners are not subjected to unfair possession orders.

Furthermore, where people pay estate rentcharges, it is not right that these homeowners have limited rights to challenge these costs. That is why the Government intends to legislate to give freeholders on private and mixed-tenure estates equivalent rights to leaseholders to challenge the reasonableness of estate rent charges.

The Government also asked the Regulation of Property Agents working group, chaired by Lord Best, to look at how service charges for leaseholders - and estate rent charges for resident freehold homeowners - could be made more transparent. The group also considered in what circumstances other fees and charges, such as administration charges or permission fees which affect both leaseholders and freeholders, are justified or whether they should be capped or banned. The working group published its final report to in July 2019 (https://www.gov.uk/government/publications/regulation-of-property-agents-working-group-report). We are considering the report’s recommendations and will announce next steps in due course.

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