The Government has now published a timetable for implementing many of the provisions contained within Part 4 of the Leasehold and Freehold Reform Act 2024 (LAFRA). The commencement dates provide long-awaited clarity on when changes will take effect, but there remains a significant caveat: we still do not have the detailed regulations that will determine how many of these reforms will operate in practice.
For managing agents, freeholders and RMC directors, the announcement provides some dates for the diary regarding future compliance requirements. However, until the Government publishes the supporting regulations, prescribed forms and operational guidance, it remains difficult to offer definitive advice on the reforms.
What Has Been Announced?
The commencement regulations introduce the service charge transparency reforms in stages between November 2026 and November 2028. Importantly, the dates currently published only bring the legislation into force. Many of the practical requirements will still depend on further secondary legislation that has yet to be released.
6 November 2026: Framework for Future Regulations
The first commencement date does not impose any new obligations on freeholders or managing agents. Instead, it enables the Government to begin implementing the detailed regulations needed to support the wider service charge transparency regime.
Whilst this date marks an important milestone, the operational detail required by the sector is still awaited.
1 April 2027: First Major Reforms Take Effect
The first substantive reforms are expected to come into force on 1 April 2027.
Fixed Service Charges
Fixed service charges will be brought within the statutory service charge framework for transparency purposes. However, the existing reasonableness provisions and consultation requirements will continue to apply only to variable service charges.
New Future Demand Notice
Where costs are not demanded within 18 months of being incurred, freeholders will be required to serve a prescribed “future demand notice”. This will replace the existing Section 20B notice process and may affect the recoverability of costs where significant differences arise between the notice and the sums ultimately demanded.
Expanded Rights to Information
Leaseholders will gain new statutory rights to request service charge information and supporting documentation.
Litigation Costs Reforms
The Act also introduces significant reforms in relation to litigation costs. From April 2027, freeholders will no longer be able to recover litigation costs through service charges or administration charges as a matter of course. Recovery will generally require a court or tribunal order. The reforms will also introduce circumstances in which leaseholders may apply for orders requiring freeholders to contribute towards their legal costs.
1 November 2027: New Reporting and Transparency Requirements
The most operationally significant reforms for managing agents are expected to commence on 1 November 2027.
Standardised Service Charge Demands
Service charge demands will need to comply with a prescribed format. Failure to use the required format may affect the ability to enforce certain lease provisions relating to non-payment or late payment of service charges.
Annual Statements and Accountant Reports
Where service charge costs are shared between four or more dwellings, freeholders will be required to provide:
- An annual statement of account
- An accountant’s report
- Service charge reporting within prescribed timescales
Insurance Commission Reforms
The Act also introduces reforms relating to insurance commissions and other insurance-related remuneration. Such payments will only be recoverable from leaseholders where they fall within the categories permitted by future regulations.
Brady Solicitors’ View
The confirmation of implementation dates is undoubtedly helpful and provides the sector with a roadmap for the next phase of leasehold reform. However, for managing agents, freeholders and resident management companies, the announcement currently answers only part of the question.
We now know when many of these reforms are intended to come into force, but we still do not know enough about how they will operate in practice.
Many of the most significant changes, including the format of service charge demands, litigation costs recovery, information disclosure obligations and insurance remuneration rules, remain dependent upon secondary legislation that has not yet been published. Until that detail is available, there is little value in making assumptions or implementing significant procedural changes based on incomplete information.
For now, the most sensible approach for managing agents is to maintain a watching brief and monitor further Government announcements, consultations and regulations as they are issued.
