The government's decision not to go ahead with the service charge accounting regulations under the Commonhold and Leasehold Reform Act 2002 will come as a bitter blow to many leasehold owners.
The Commonhold and Leasehold Reform Act 2002 originally provided that lessees' money was to be held in separate designated bank accounts and that lessees would have the right to automatically receive a full set of annual service charge accounts along with an accountant's report.
Housing minister Grant Shapps has recently written to Brett Williams of the Association of Residential Managing Agents (ARMA) defending his position advising that the government is not letting down leaseholders by not completing this section of the Act.
Shapps legitimised his decision stating that government is "keen to avoid imposing further burdens on landlords and managers, which would increase costs for service charge payers"
The Commonhold and Leasehold Reform Act 2002 was passed less than years ago and after three years of intensive work to produce these regulations some will now argue that it has been stopped without the appropriate consideration.
The leasehold team at Fridaysmove are seeing an increasing number of calls relating to service charge disputes and therefore calls upon the government to press ahead with service charge reform.
50% of the country's leasehold apartments (1. 08m approx leaseholders), which equates to around 40, 000 blocks of flats are managed by a property managing agent. The balance of the country's leasehold flats are not managed by a property manager - they are self-managed. These figures are based on previous government estimates.
If you are encountering problems with the management of your building or service charges please feel free to contact the Leasehold Conveyancing team at Fridays or our Service Charge Dispute team in the numbers given on this we page.