SHAC has received a government response to our petition posted on the Parliamentary website. The petition, which launched in January 2025, asked government to:
Create a new body to regulate landlord and freeholder service charges
We want the Government to create a new body that is empowered to monitor and regulate private, council, and housing association service charges, and impose meaningful penalties for unfair, inaccurate, and unreasonable service charges. It should provide free support to people to challenge charges.
Almost 11,000 people signed the petition, triggering a mandatory government written response. It runs until mid-June so there is still an opportunity to sign. The reply arrived from the Ministry of Housing, Communities and Local Government (MHCLG) on the 19th May. See the petition and full reply here.
We find the response inadequate and have let government know that we expect an answer that fully addresses the requirements in the petition. As it stands, it fails to address the central question of whether a new regulatory body will be created, or if the scope of any existing regulator will be expanded to put an end to the vast overcharging that has become normalised. No reference is made at all to the need for meaningful penalties. Nor is additional support offered to those needing to challenge their service charges.
Please help us by calling on government to provide a full response to the points made in the petition. See our call to action here.
We have been offered many words, but no reassurance that government is taking service charge abuse seriously. Indeed, if this response genuinely encapsulated the government’s view of how service charging operates, it would demonstrate an extreme level of denial about the widely publicised levels of abuse. But it is also disingenuous, contradicting admissions made to the media by MHCLG that the system is failing:
“A Ministry for Housing, Communities and Local Government spokesperson said: “Far too many leaseholders and social housing tenants across the country are being asked to pay unreasonable and extortionate charges.”” The Guardian, 21.03.2025
We quote sections of the response in bold below, and then demonstrate how the response is inadequate, misleading, and falls short of addressing the points raised in the petition.
The Government will consult this year on measures in the Leasehold and Freehold Reform Act 2024 [LFRA 2024] to increase service charge transparency, enabling better scrutiny and challenge of unreasonable charges.
The measures listed in the LFRA 2024 are all arguably contained within the existing Landlord and Tenant Act 1985. The latter gives leaseholders the right to view a summary of their service charge accounts (Section 21), and the right to view the accounts, receipts, and other supporting documentation (Section 22). The timelines require provision within 30 days. The existing Act also requires that costs must be both reasonable and reasonably incurred (Section 19).
Restating such provisions in a new piece of legislation does not offer any additional protections to tenants or residents. If landlords were forced to abide by their current legal obligations, there would be no service charge abuse. What is lacking is not legislation but meaningful enforcement mechanisms, which is why the petition seeks a new regulatory body with the power to impose effective sanctions on financially abusive landlords.
Service charges are financial contributions requested by a landlord for the costs of day-to-day management, maintenance, and sometimes improvement of leasehold properties.
To say that service charges are requested by landlords implies that tenants and residents have the option of whether to pay. The charges are mandatory, and as the law stands, tenants and residents are expected to pay even when the landlord has clearly overcharged them, for example by including invoices relating to a different block of flats.
The expectation is that the tenant or resident pays whatever is demanded, then challenges and reclaims overpaid monies. This does not work, and tenants can find themselves locked in a war of attrition for years, with an ever increasing accumulation of struggles relating to successive annual demands.
The way service charges are organised, including what services are paid for, individual contributions, and payment schedules, are set out in individual leases or tenancy agreements.
All social housing tenants in England should be supplied with clear information on how service charges are set. When new or extended services are introduced, Registered Providers are expected to consult with tenants.
If tenants and residents only had to pay the items specified in their leases, they would be a lot richer. This statement also implies that it is lawful for tenants and residents to refuse payment for any items not listed in the tenancy or leasehold agreements.
This is not what happens in the real world. There, tenants who have historically paid for their services as an integral part of their rent suddenly find themselves levied with a separate service charge with no equivalent reduction in rent. There is no process of consultation beforehand.
For both tenants and residents, the number of items they are being charged for is growing annually, far in excess of the provisions made within individual leases or tenancy agreements.
Leaseholders and housing association tenants may contest the reasonableness of their service charges by applying to the First-tier Tribunal (or Leasehold Valuation Tribunal in Wales).
Leaseholders may seek free information and advice funded by the Department and provided by The Leasehold Advisory Service (LEASE), which offers online resources, telephone, and email enquiry services. Free advice can also be obtained from Citizens Advice.
Measures in the 2024 Act will also remove barriers to leaseholders challenging their charges at a tribunal by requiring landlords to apply to the relevant court or tribunal to pass any or all of their legal costs onto leaseholders and giving leaseholders a new right to apply to the relevant court or tribunal to claim their legal costs from their landlords.
There is so much wrong with these statement that it is difficult to know where to begin to unpick them. However, in summary, the lack of access to free or affordable legal representation presents a major obstacle to tenants and residents. The information available from LEASE and Citizens Advice falls hopelessly short of the tailored assistance needed to make the Tribunal route accessible. Landlords by contrast have access to their own in-house legal teams, retained solicitors, and a barrister.
With landlord legal costs running to hundreds of thousands of pounds, the financial pressures imposed on a tenant or resident ordered to pay the landlord’s legal fees bear no equivalence to the financial implications for a landlord ordered to pay the tenant or resident’s legal fees.
A tenant could lose their home, be forced to uproot children from school, abandon their local community networks, and be left with unmanageable debt.
By contrast, the wealth of landlords, insurance policies to offset legal fees, and the fact that most tenants and residents have no legal representation at Tribunal and therefore incur minimal costs, all mean that landlords can easily absorb any charges. The provisions allowing landlords to claim legal fees from tenants and residents needs to be removed completely.
There are two service charge codes of practice approved by the Secretary of State for the residential leasehold sector and private retirement housing. They promote good practice and can be considered in court or tribunal proceedings.
The [Social Housing (Regulation) 2023] Act also strengthened the Housing Ombudsman Service, so tenants or leaseholders of social landlords have somewhere to turn when they are not getting the answers they need from their landlords. The Ombudsman was given the power to issue a statutory code of practice on complaint handling alongside duties to consult on any code issued and monitor the compliance of member landlords with the code.
The Ombudsman’s Complaint Handling Code, which was put on a statutory footing in April 2024, sets out best practice for landlord’s complaint handling procedures.
Voluntary and even statutory codes are currently ineffective. At the statutory end of the spectrum, there has been widespread exposure of systematic service charge abuse by the largest housing associations in the UK, yet these same landlords are awarded the highest level of governance rating by the Regulator of Social Housing.
Likewise the notion that landlords can be embarrassed into compliance with voluntary codes is a proven misconception. In its latest report on Complaint Handling Failure Orders (CHFOs), the Ombudsman noted “the percentage of non-compliance with them at its highest level ever recorded.” (Housing Ombudsman 18.07.2024).
Such codes do not address the problems because in both cases, the sanctions for non-compliance are minimal. This explains the petition’s call for meaningful penalties.
The petition remains open, and will run until mid-June. In the meantime, we have written to the Parliamentary Petitions Team, Matthew Pennycook MP (Minister of State for Housing and Planning), Angela Rayner (Secretary of State for Housing, Communities and Local Government), and the Ministry of Housing, Communities and Local Government asking them to rewrite their response. We await their reply with interest.
If you are affected by extortionate or inaccurate service charges and wish to consider non-payment having exhausted the landlord’s complaints procedure, see our guidance on doing so as safely as possible here. Find out more about SHAC’s campaign to end service charge abuse here.
27 May 2025
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Well done Shac keep up the good work.
Thank you and thanks for all you do to hold government and landlords to account!
Thank you!