The Leasehold and Freehold Reform Act 2024 – will it really help?
Last month, the government passed their long awaited new legislation, touted as the remedy to unfair leasehold/freehold practices. Now that the text of the new law has been published, we ask if it really lives up to the hype and what it means for flat owners.
We welcome the changes to Right to Manage, where a group of leaseholders can get together and obtain the legal right to appoint their own managing agent to look after the building. Many more blocks now qualify for this right, especially mixed use properties.
Amongst other things, the Act also introduces improvements for lease extensions and more rights for people who own freehold houses on mixed estates. All of these changes come into effect on 24th July 2024.
The single most important change that would benefit flat owners is the introduction of a mandatory regulator for all managing agents, which is missing from the Act
Other benefits of the Act remain to be seen, since it contains other provisions which are not yet in force or still to be drafted. Changes to insurance are coming, and there will be a new mandatory format for service charge payment demands, accounts and something new called an annual report.
We work with so many people who have struggled to understand poorly written letters and communications from their managing agent and freeholder, so we can only hope the new rules will improve things. We would like to see a legal requirement to provide leaseholders with a line-by-line report showing exactly how their service charge money has been spent, so they can challenge anything they think is wrong.
Overall, though, we feel this legislation is a missed opportunity. The single most important change that would benefit flat owners is the introduction of a mandatory regulator for all managing agents. Today, it is an unregulated industry, dominated by cowboys who will happily overcharge leaseholders, provide terrible customer service, and ignore the laws that are supposed to govern their behaviour . Without a regulator who can hold managing agents to account, introducing more and more rules for them to follow is just not going to help.
The government also failed to introduce mandatory qualifications for managing agents. Many leaseholders are shocked to learn that their managing agent does not have any formal qualifications whatsoever, let alone any relevant professional certifications.
Although the Act could have gone further, even marginal improvements can only be a good thing. As ever, the fully qualified team at Foxbrush is determined to lead the way by providing outstanding service to all our leaseholders.