What’s Changing?
On 15 July 2026, the government published its response to the Strengthening Leaseholder Protections over Charges and Services consultation, confirming a significant package of new service charge rules under the Leasehold and Freehold Reform Act 2024.
The changes cover how service charges are demanded, what information leaseholders can request, how buildings insurance is disclosed, and how service charge accounts are prepared. None of this is law yet. The measures will be brought in through a series of statutory instruments later this year, with leaseholders starting to see the changes during 2027. Here is what is actually changing, and what it means for your building.
Annual Reports
Landlords and managing agents will be required to send leaseholders an annual report covering the health and condition of the building, any planned major works, and other information leaseholders need to keep track of what is happening.
The government will prescribe the exact form this report takes, so every leaseholder receives the same standard of information regardless of who manages their building.
It will also include a declaration of any relevant relationships between the landlord and third parties, such as a managing agent, so those connections are visible rather than assumed.
Private landlords will get 12 months’ notice before this becomes a requirement, and social landlords 24 months.
Service Charge Demand Form
Alongside the annual report, the new service charge rules introduce a standardised form for service charge demands. The initial demand each year must be accompanied by the annual budget for the building, including a comparison against what was actually spent the previous year, so leaseholders can see straight away whether costs are moving in the direction they expect. Interim and reconciliation demands will follow the same format for consistency. A separate version of the form will apply to local authority landlords to reflect how they operate.
The Right to Ask for More, and Get it
Leaseholders will get a clearer, legally defined right to request information from their landlord relating to service charges, and to the management, maintenance, repair, improvement and insurance of their building. That right will reach back six years, with a sliding scale for how quickly a landlord must respond depending on how complex the request is.
Where a landlord needs to chase a third party, such as a previous managing agent or a contractor, for the information, they will have 15 working days to make that request, and they remain responsible for meeting the overall deadline regardless of any delay on the third party’s side. Leaseholders will also keep the right to inspect documents in person within three months of asking, with digital access encouraged as the more practical route wherever possible.
Administration Charges
The new service charge rules cover administration charges too. Where a landlord charges leaseholders for administration, such as dealing with a lease query or approving an alteration, they will be required to publish a schedule setting out the exact charge, or a clear method for working it out where a fixed figure is not possible. This schedule has to be included in the annual report and made available on request at any time, with a clear date showing when it was issued and when any changes take effect.
Buildings Insurance
This is likely to matter most to leaseholders. Managing agents and landlords will be required to declare any relationships or financial arrangements they have with the broker and insurer involved in arranging a building’s insurance, going further than the disclosure rules that currently apply under FCA regulation. Leaseholders will get clearer information on how the policy was procured, how the premium was priced, and what it actually covers.
The government has also confirmed it intends to introduce a permitted building insurance payment, effectively closing the door on hidden commissions being recovered through the service charge. The exact mechanics and commencement date for this will be set out in secondary legislation, so the detail is still to follow, but the direction is clear.
Standardised Service Charge Accounts
Service charge accounts will need to include, at minimum, a balance sheet for the building, an income and expenditure account with explanatory notes, sinking or reserve fund statements where they apply, and an aggregate figure for any unpaid service charges. Accounts will need to be signed off by a suitably qualified professional, with ISRS 4400 as the default reporting standard, or ISA 800 where a lease specifically requires an audit.
The pool of professionals qualified to prepare these accounts is being widened, which should help keep turnaround times reasonable across the sector.
When The New Service Charge Rules Take Effect
It is worth being clear about timing, because reform announcements and reform arriving in practice are two different things. This is a government response confirming direction, not a change in the law today.
The measures will be introduced through a minimum of five statutory instruments later in 2026, and the government has said leaseholders will start to see the practical effects during 2027, with landlords and managing agents given 12 to 24 months’ notice depending on the specific measure, so they have enough time to adjust their systems and processes.
If you sit on the board of a Resident Management Company or an RTM company, most of the responsibility for meeting these new service charge rules will fall on you as the entity legally entitled to demand the service charge, even where a managing agent carries out the work in practice. That is exactly the kind of administrative load that a managing agent is there to take off your hands.
How Wishtower Can Help
As a RICS regulated firm and members of the Institute of Residential Property Management, transparency around service charges, insurance arrangements and accounts is already central to how we work, so these reforms sit comfortably alongside our existing approach rather than requiring us to start from scratch.
We manage residential property across East Sussex (including Brighton, Eastbourne, and Hastings), West Sussex (including Burgess Hill and Haywards Heath), and Croydon on behalf of freeholders, RMCs and RTM companies, and we are keeping a close eye on the statutory instruments as they are laid so we can keep our clients ahead of the changes rather than catching up with them.
If you would like to talk through what the new service charge rules mean for your building, or want a second opinion on how your current arrangements measure up, get in touch with our team and we will be happy to help.
This article is for information only and does not constitute legal advice. Wishtower accepts no responsibility for any reliance placed on it.
