Flat owners to get new powers to challenge unfair service charges from April 2027

More than three million leaseholders in England, including the many thousands who own flats in Birmingham's city centre towers and suburbs, will get stronger powers to challenge unfair service charges from next April, the government has announced.

From 1 April 2027, leaseholders will be able to demand information about what they are paying for and why, and will be better protected from having to pay their landlord's legal costs when they challenge a charge. The changes were announced late on 11 November.

What changes in April 2027

Leaseholders will gain strong powers to ask for information about their service charges, giving a clearer picture of how their building is managed, maintained, repaired and insured. They will be able to ask for information from previous years, and landlords will need a good reason to refuse.

Landlords will also need court or tribunal approval to pass on their legal costs to leaseholders, ending a practice that let them charge leaseholders whether the landlord won or lost a dispute. Leaseholders will also get a new right to claw back their own legal expenses.

Prime Minister Andy Burnham said: "It is simply wrong that millions of leaseholders can be hit with unfair charges, then face another bill just for challenging them. That isn't right, and where we can act quickly to change it, we will."

Clearer bills from November 2027

From 1 November 2027, all leaseholders, whether their building is owned by a private landlord, council or housing association, will automatically get clearer information about their charges, including details of the building insurance they help pay for and stronger protection against excessive fees for arranging it. Admin fees must be clearly set out too.

Private landlords will have to use simpler, standardised service charge demand forms and provide financial accounts and annual reports. From 1 November 2028, councils and housing associations will have to do the same for their leaseholders.

Housing Minister Matthew Pennycook said: "Rapidly escalating and frequently opaque service charges are placing huge financial strain on hard-pressed leaseholders across the country."

"Today, we're acting to protect them by introducing regulations that will improve the fairness and transparency of service charges so that unreasonable increases can be more easily challenged," he said. "As we work to dismantle the feudal leasehold system in this Parliament, we won't leave existing leaseholders behind."

A wider shake-up to come

The changes bring in protections from the Leasehold and Freehold Reform Act 2024. Further reforms are planned through the Commonhold and Leasehold Reform Bill, due to be introduced in Parliament before Christmas. The Prime Minister said the government wanted to "end the feudal leasehold system for good".

What it means in Birmingham

Birmingham's city centre living boom has created thousands of leasehold flats in recent decades, and their owners pay service charges for insurance, maintenance and management. The new rights will not cut bills on their own, but they will make it far easier to see where the money goes and to challenge charges that look unreasonable, without the fear of being landed with a landlord's legal costs.

Leaseholders who want advice can contact the Leasehold Advisory Service, which offers free guidance on service charges and their rights.