Leasehold: Service Charges

Department for Levelling Up, Housing and Communities written question – answered on 14th January 2022.

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Photo of Daisy Cooper Daisy Cooper Liberal Democrat Spokesperson (Health and Social Care)

To ask the Secretary of State for Levelling Up, Housing and Communities, if he will make it his policy to bring forward legislative proposals to protect leaseholders from excessive commission charges levied by (a) managing agents and (b) freeholders, when providing (i) buildings insurance policies, (ii) communal energy agreements and (iii) other services contracted from third party suppliers.

Photo of Daisy Cooper Daisy Cooper Liberal Democrat Spokesperson (Health and Social Care)

To ask the Secretary of State for Levelling Up, Housing and Communities, if he will make it his policy to include in future legislative proposals on leasehold reform provisions to compel freeholders and managing agents to be transparent about commission fees they receive when arranging (a) buildings and other insurance policies, (b) communal energy services and (c) other services contracted from third party suppliers.

Photo of Eddie Hughes Eddie Hughes Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

The Government is committed to ensuring that those living in the leasehold sector are protected from abuse and poor service. We believe very strongly that service charges should be transparent and communicated effectively, and that there should be a clear route to challenge or redress if things go wrong. The law is clear that service charges must be reasonable and, where costs relate to work or services, the work or services must be of a reasonable standard. Leaseholders may make an application to the First-tier Tribunal to make a determination on the reasonableness of their service charges or fees.

We established an independent working group chaired by Lord Best that considered how the service charge regime could be improved to increase transparency for leaseholders. 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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