Leasehold Law

Nature of Leasehold — You only own a leasehold property for a fixed period of time under a legal agreement with the landlord (the lease); ownership returns to the landlord when the lease ends. Most flats are leasehold; houses can be too, usually via shared ownership.

Service Charge Reasonableness — Under s.19 LTA 1985, relevant costs count towards a service charge only to the extent they are reasonably incurred, and works or services must be of a reasonable standard; advance service charges must be no greater than is reasonable, with adjustment once costs are incurred.

Right to Information — Leaseholders paying a service charge have the right to a summary showing how the charge is worked out and what it is spent on, and to see supporting paperwork such as receipts; failing to provide this is a criminal offence.

Section 20 Consultation — Leaseholders must be consulted before the landlord charges more than £250 per leaseholder for planned works, or £100 per year under an agreement for works or services lasting more than 12 months; if consultation is not carried out properly there is a limit on how much the leaseholder has to pay.

Challenging Charges — A leaseholder can apply to the First-tier Tribunal where they consider a charge unreasonable, the standard of work unsatisfactory, or the charge not payable at all. Building insurance arranged by the landlord can also be challenged: leaseholders can demand a summary of the policy and dispute its cost at tribunal.

Ground Rent Demands — Under s.166 CLRA 2002, a tenant under a long lease of a dwelling is not liable to pay rent unless the landlord serves a notice specifying the amount and the date payable; unpaid ground rent can be recovered going back 6 years.

Peppercorn Ground Rents — For regulated leases granted on or after 30 June 2022, the Leasehold Reform (Ground Rent) Act 2022 prohibits ground rent above a peppercorn (zero financial value); a landlord who receives a prohibited rent must refund it within 28 days. Leases granted before that date keep their existing ground rent terms.

LAFRA 2024 Regulation — The Leasehold and Freehold Reform Act 2024 extends regulation to fixed service charges (s.53), standardises service charge demands (ss.54-55) with enforcement provisions (s.58), restricts recovery of landlords' non-litigation costs for enfranchisement, extension and right to manage claims (s.64), regulates estate management charges for freehold estates (Part 5, including reasonableness and consultation requirements), and requires redress scheme membership (Part 6).

Staged Commencement — LAFRA 2024 provisions come into force by commencement regulations (s.124(3)). The removal of the qualifying period before enfranchisement and extension claims (s.27) came into force on 31 January 2025 (S.I. 2025/57); other provisions should be checked against legislation.gov.uk before being relied on.

Management Disputes — The right to manage and management-appointment routes under the CLRA 2002, and enfranchisement rights, are covered in the right-to-buy-and-leasehold-enfranchisement topic.