Leaseholders to get rights to more easily challenge extortionate service charges

Sky News

7 hours ago

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Leaseholders will be able to more easily challenge extortionate service charges, the government has said.
For those who are trapped in the midst of the leasehold scandal, the reforms cannot come soon enough.
They have been promised change for many years by successive governments and by Labour in opposition, so any progress will be welcome, but is it enough for those suffering financially?
It's a complex problem but at the heart of it are service charges that go higher and higher in a way that is often inexplicable, unpredictable and opaque.
These are fees for building services and maintenance that are on top of the homeowner's mortgage.
They often run into thousands of pounds, go way over the initial estimate and it is not clear why they are so high.
By forcing companies to be transparent about the fees they are charging, the government is hoping to tackle this.
The reforms, which the government has said it will push through after a consultation, will receive standardised service charge documentation which spell out clear and detailed information about how their service charges are calculated and spent.
Further reforms will stop leaseholders having to automatically pay for landlords' litigation costs even where they have won their case.
According to housing minister Matthew Pennycook, the changes will enable homeowners to challenge unreasonable charges more easily.
He also believes it will put pressure on managing agents to bring fees down.
The government will also introduce a strict new qualification regime for managing agents to try to raise standards in the sector.
Mr Pennycook told Sky News: "The system has some inherent inequities in it that do allow leaseholders to be gouged and particularly when it comes to managing agents there are unscrupulous people out there.
"They are abusing leaseholders and there's poor practice.
"The reforms we are announcing today and reforms that are to come are going to bear down managing agents and ensure the sector as a whole is properly regulated."
Asked why it has taken a year to make this announcement, and why further changes could take much longer, he said: "We've got to take forward through primary legislation the wider reforms necessary to bring the system to an end.
"You can't do that in 100 days but we are also determined to provide relief to existing leaseholders now."