Leasehold reform: dates set for service charge and litigation costs changes
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Summary
Landlords and managing agents of residential property in England now have a firm timetable for the service charge, insurance and litigation costs reforms in the Leasehold and Freehold Reform Act 2024 (“LAFRA”). Regulations made on 25 October 2026 bring the reforms into force in four stages, from 6 November 2026 to 1 November 2028, with the first new obligations on landlords applying from 1 April 2027.
What has happened?
The Leasehold and Freehold Reform Act 2024 (Commencement No. 4 and Saving Provision) (England) Regulations 2026 (SI 2026/1128) bring in most of Part 4 of LAFRA, which regulates service charges, building insurance, administration charges and litigation costs. The Regulations apply to England only and follow the Government’s July 2026 response to its consultation on strengthening leaseholder protections over charges and services. The reforms apply to existing leases as well as new ones.
Key dates
| Date | What comes into force |
|---|---|
| 6 November 2026 | Powers only: the Government can now make the detailed regulations setting the prescribed forms, content and timescales. No new obligations yet apply to landlords. |
| 1 April 2027 | A new prescribed ‘future demand notice’ for costs not demanded within 18 months; a statutory right for leaseholders to request service charge and management information; and the new litigation costs regime. Additionally, fixed service charges are brought within the statutory regime. |
| 1 November 2027 | Prescribed service charge demands, accounts and annual reports (for private landlords); a ban on recovering insurance commissions and similar ‘excluded insurance costs’ through the service charge; a duty to give leaseholders insurance information; and a duty to publish administration charge schedules. |
| 1 November 2028 | Prescribed service charge demands, accounts and annual reports, and related enforcement, extended to social landlords (private registered providers, local housing authorities and certain landlords in a joint venture with a social housing provider). |
Litigation costs
From 1 April 2027, a landlord’s litigation costs will not be recoverable through the service charge or as an administration charge unless the court or tribunal orders otherwise. Leaseholders will also be able to apply for an order that their landlord pays their own litigation costs in specified types of proceedings. A saving provision means the new rules do not apply to proceedings issued before 1 April 2027, which will continue under the current regime.
The Government has said that court or tribunal approval will be needed in all cases where costs are recovered through the service charge, with a threshold-based exemption for lower value costs claimed as an administration charge and a temporary, safeguarded suspension for resident-led buildings and tribunal-appointed managers.
Management Information and Service Charges
LAFRA introduces new obligations on landlords in respect of service charges, insurance and administration charges, backed by new consequences for non-compliance. These include:
- a prescribed form of service charge demand – if a demand is not in the prescribed form, the lease provisions on non-payment or late payment of service charges will not apply;
- standardised service charge accounts, with a report by a qualified accountant;
- an annual report giving key information about the service charge and the building;
- a ban on recovering insurance commissions and similar ‘excluded insurance costs’ through the service charge;
- a duty to give leaseholders prescribed insurance information;
- a duty to publish an administration charge schedule – an administration charge will only be payable if it appeared on the published schedule for 28 days before it is demanded; and
- a right for leaseholders to request information. The detail will follow in regulations, but the Government has said there will be a prescribed list of information relating to service charges and the management, maintenance, repair, improvement and insurance of the building, going back six years.
Superior landlords are also caught. Anyone with a right to enforce payment of a service charge counts as a landlord for these purposes, and costs incurred by a superior landlord fall within the new rules. Where a landlord does not hold requested information or insurance information, it must ask whoever does, and that person (including a superior landlord further up the chain) must provide it. Superior landlords receiving insurance commission may also be ordered to pay damages to leaseholders.
Social landlords get extra time only for demands, accounts and annual reports. The insurance, administration charge, information and litigation costs changes apply to them on the same dates as private landlords.
Leaseholders can enforce these duties in the First-tier Tribunal (Property Chamber), which can order compliance within 14 days and award damages of up to GBP 5,000 for failures relating to demands, annual reports and information (GBP 1,000 for administration charge schedules). Where excluded insurance costs have been charged, the tribunal can order repayment and damages of between one and three times the amount paid. Damages cannot be set off against service charges owed.
Detail still to come
The Regulations fix the timetable but not the detail. The prescribed forms, information lists and deadlines will be set in separate regulations.
What should landlords and managing agents do now?
Whilst no new obligations will apply to landlords until 1 April 2027, landlords and agents should consider preparatory steps including:
- Monitor for regulations containing the detail of new prescribed forms and requirements.
- Review building insurance placement, commission and broker arrangements well ahead of 1 November 2027.
- Engage software providers, accountants and managing agents early on new demand, accounts and annual report formats.
- Prepare an administration charge schedule.
- Consider management agreements and any updates required to allocate responsibility for compliance.
- Consider the timing of any known or threatened litigation and enforcement steps ahead of 1 April 2027.
