The Government has committed to ensuring that freeholders who pay charges for the maintenance of communal areas and facilities on a private or mixed tenure estate can access equivalent rights as leaseholders to challenge their reasonableness. In addition, we have committed to protecting leaseholders who are suffering at the hands of rogue managing agents every day from unexpected costs or excessive fees for poor quality repairs.
We intend to create a new statutory regime for freeholders based on the leaseholder rights contained in the Landlord and Tenant Act 1985. This will ensure maintenance charges must be reasonably incurred and services provided are of an acceptable standard. We will provide freeholders with the ability to challenge the reasonableness of the charges they are required to pay towards the maintenance of communal areas and facilities at the First-tier Tribunal. We are also considering whether freeholders should have a right to change the provider of maintenance services by applying to the tribunal for the appointment of a new manager. We will bring forward legislation as soon as Parliamentary time allows.
We have asked Lord Best to chair a working group to look at regulating and professionalising property agents. This includes reviewing the standards around the transparency of service charges and other fees and charges, how they are presented to consumers and putting them into a statutory code for managing agents. Lord Best’s working group will report back to Ministers later this summer.
We are also looking at the future use of charges and restrictions beyond service charges – such as permission fees, administration charges and other restrictions and covenants faced by leaseholders and resident freeholders, and consider whether they should be capped or banned. We will consider this alongside Lord Bests proposals.