Leaseholders in England are set to gain stronger rights to question service charges under a package of regulations laid before Parliament on 12 November.
The five statutory instruments are intended to bring in parts of the Leasehold and Freehold Reform Act 2024. The Government estimates that more than three million leaseholders in England will benefit. The first changes are scheduled for 1 April 2027, with further requirements following in November 2027 and November 2028.
Three of the instruments require parliamentary approval before they can take effect. The planned changes are not a promise that every bill will fall, and they do not place a cap on service charges. Their aim is to make the costs easier to understand and to change some of the financial risks involved in challenging them.
More information on what residents pay for
Service charges can cover the shared costs of looking after a building, such as cleaning communal areas, maintaining lifts, repairing the roof and arranging buildings insurance. The work may be organised by a landlord or a managing agent, while leaseholders contribute under the terms of their leases.
From 1 April 2027, the package is intended to give leaseholders stronger rights to request information about service charges and the management, maintenance, repair and insurance of their buildings. Requests will be able to cover information from previous years, and landlords will need a good reason to refuse to provide it.
That could make it easier for someone who receives a charge to examine what lies behind it rather than relying solely on the amount demanded. Information about a repair or an insurance arrangement, for example, may help an owner decide whether they need to ask further questions. It would not, by itself, establish that a particular charge is unreasonable or remove an obligation to pay a valid bill.
A different approach to legal costs
The April 2027 changes also aim to address the risk that leaseholders face when they dispute charges. In most cases, landlords will need a court or tribunal’s approval before recovering their litigation costs through a service charge or an administration charge.
There is an exception for certain lower-value litigation costs recovered through administration charges, so it would be wrong to say that every landlord’s cost will always require prior approval. Leaseholders will also have a new route to apply for their own litigation costs to be recovered from the landlord, subject to a court or tribunal’s approval. Recovery is not automatic.
The timing of a dispute matters. Proceedings issued before 1 April 2027 are not covered by the new litigation-cost rules and will remain under the existing regime. The Government plans to lay a further set of regulations on the detail of the litigation-cost changes before the end of 2026.
Insurance and standard bills
From 1 November 2027, the measures are intended to require landlords to give leaseholders a standardised document explaining buildings insurance cover and costs. It will include information about how the insurance was arranged and any financial incentives, relationships or potential conflicts of interest between those involved.
Commission-sharing with landlords and managing agents is also due to be banned and replaced with permitted payments for specific insurance-related services. The intention is to make the amounts charged for those services more transparent, rather than to guarantee a particular insurance premium for every building.
At the same stage, landlords other than social landlords are due to provide standardised service charge demands, annual reports and accounts. All landlords are also due to provide a standardised schedule setting out administration fees, or how fees will be calculated where the amounts cannot be established in advance.
Councils and housing associations will have until 1 November 2028 to introduce the standardised service charge demands, accounts and annual reports. Their leaseholders are still intended to receive the insurance and administration-charge changes from November 2027. The Government says the extra year for the reporting documents reflects the complexity of social landlords’ accounting and service-charge systems.
Wider reform still to come
The regulations are separate from a proposed Commonhold and Leasehold Reform Bill, which the Government intends to introduce before Christmas 2026. Ministers plan for that Bill to make a revised form of commonhold the default for most new flats and to make it easier for existing leaseholders to move to commonhold.
They also plan to cap existing ground rents at £250 a year through the Bill. Ground rent is separate from a service charge, and that proposed cap should not be confused with a limit on the cost of maintaining or insuring a building. The Bill has yet to be introduced and its provisions would need to pass through Parliament.
For leaseholders, the immediate development is the laying of detailed regulations, not the arrival of all the new rights. The practical effect will depend on the relevant parliamentary process and on how the measures work when their different start dates arrive.
