Leasehold Reform; Government responds to consultation on service charge regulation
min readSummer is very much here and whilst many are on holiday, the Government is continuing its work on Leasehold Reform. It recently issued a response to a July 2025 consultation concerning service charge regulation and the implementation of provisions of the Leasehold and Freehold Reform Act 2024 (“LAFRA 2024”).
LAFRA 2024 received Royal Assent back in May 2024, but the majority of its provisions remain unimplemented. The Government has published a response to its July 2025 consultation: “Strengthening leasehold protections over charges and services” which looks to implement the provisions increasing regulation of residential service charges. For more details about that consultation, please see our Insight: Government launches consultation on “switching on” provisions regulating service charges and estate management charges in LAFRA 2024
What can we expect to see?
The outcome is that the Government intends to shortly implement the following measures in LAFRA 2024:
- prescribed form service charge demands and accounts to increase transparency of service charges.
- restrictions on the landlord’s ability to recover certain litigation costs;
- implied terms into residential leases enabling leaseholders to claim their litigation costs from landlords in particular circumstances;
- Changes to Section 20B Notices to introduce notices of future demands which will require information to be given about why a service charge for balancing charges is delayed, the estimated amount and when a demand is expected (with no caps where estimates are exceeded at this stage)
- Leaseholders will be able to serve notices requesting certain information from landlords (e.g. the right to inspect previous service charge accounts going back 6 years) who will be required to provide it within prescribed timescales.
The Government says that it will bring in secondary legislation to implement these measures in England “as soon as possible”, with the changes being introduced in 2027. The Government has committed to giving 12 months’ notice to introduce standardised service charge accounts, prepare for the publication of administration charges (which will require either the exact charge to be published or the method for calculating the charge) and deal with increased transparency requirements for building insurance.
The Government plans to respond separately to proposals to change the way landlords consult in relation to major works, introduce mandatory reserve funds and introduce mandatory qualifications for managing agents.
What do you need to do?
Landlords and managing agents will need to start preparing their systems for the standardisation of documents such as service charge demands and accounts. The draft templates were published with the original consultation. These are not yet in final form and secondary legislation will be required, as has been seen, to implement these provisions in LAFRA 2024. Given that they are significant changes, now is the time for stakeholders in the residential sector to start familiarising themselves with these to get ready for implementation.
We are tracking implementation on our Essential Residential Hub and our timeline of changing landscapes in residential leasehold.
If you have any queries, please contact Lauren Fraser, Laura Bushaway or your usual Charles Russell Speechlys contact.
“Following consultation with leaseholders, landlords and industry groups, the government has confirmed it will proceed with a series of measures to increase transparency around service charge costs and rebalance the system.”
