Arms Length Management Organisations

Ministry of Housing, Communities and Local Government written question – answered on 14th July 2021.

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Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport)

To ask the Secretary of State for Housing, Communities and Local Government, what plans he has to bring forward legislative proposals to protect leaseholders from being overcharged by freeholders for maintenance and property enhancements by their housing management companies.

Photo of Eddie Hughes Eddie Hughes Parliamentary Under-Secretary (Housing, Communities and Local Government)

The Government is committed to ensuring that those living in the leasehold sector are protected from abuse and poor service.

The law is already clear that service charges and any increase in costs must be reasonable and, where costs relate to work or services, the work or services must be of a reasonable standard. The consultation process set out in Section 20 of the Landlord and Tenant Act 1985 further sets out a process associated with major works. Leaseholders may make an application to the First-tier Tribunal for it to make a determination on the reasonableness of their service charges or on section 20 grounds.

We also established an independent working group chaired by Lord Best to raise standards across the property sector, which considered how the service charge regime, including transparency of charges, potential caps and major works consultations, operated. The working group published its final report to Government (see: https://www.gov.uk/government/publications/regulation-of-property-agents-working-group-report) and we are considering the report’s recommendations.

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