The Government’s latest consultation on leasehold reform is now live and closes on 21 August 2025. This consultation not only looks at how the Leasehold and Freehold Reform Act 2024 should be implemented but also explores what further reforms could be introduced.
For managing agents, this is a pivotal opportunity to ensure that your real-world experience is reflected in the legislation that will shape the future of leasehold property.
At Brady Solicitors, we advise all managing agents to review the consultation and submit feedback, especially where the reforms may create unintended consequences for your day-to-day operations — including the ongoing debate around litigation cost recovery.
Part 1 – Implementing the 2024 Act: Key Areas
The first part of the consultation seeks input on how key measures in the Leasehold and Freehold Reform Act 2024 should be put into practice. These include:
- Service charge transparency and standardisation: How should service charge demands and summaries be standardised and improved to enhance leaseholder understanding and comparability? The Government proposes making prescribed forms of annual accounts mandatory, but seeks views on how detailed these should be, and whether different requirements should apply to small vs large landlords.
- Building insurance information: The Government’s latest leasehold reform consultation is exploring whether the buildings insurance information already provided under FCA rules—such as policy details, commissions, and conflicts of interest—is sufficient for leaseholders. It also considers whether additional disclosures, including how to make a claim, are needed to improve transparency around the insurance costs passed on through the service charge.
- Litigation costs regime: Whilst the 2024 Act seeks to address current possible scenarios such as when leaseholders may be required to pay the freeholder’s costs even when they are successful, the consultation is seeking views on when exemptions to the proposed litigations cost regime may be appropriate. For example, within debt claims or when a leaseholder is in breach of lease for subletting, would it not be appropriate for leaseholders to pay the costs associated in rectifying these scenarios?
For managing agents, this is a chance to highlight areas where reforms could overburden agents with new responsibilities, where guidance or clarity is needed, or where the implementation of new duties could create delays, disputes, costs, or have an a potentially unintended impact.
Part 2 – Additional Future Reforms: What could come next?
The second part of the consultation is broader and looks to the future direction of leasehold reform. It invites responses on a number of possible new initiatives, including:
- Major Works and Reserve Funds: The government is inviting views on making reserve funds mandatory for both new and existing leases to support long-term planning for major works. The proposals also include increasing the financial threshold that triggers consultation on major works—helping to avoid unnecessary costs and delays for relatively minor projects—alongside streamlining the Section 20 process and enhancing leaseholder engagement and transparency.
- Managing Agents Regulation: The consultation puts forward plans to introduce mandatory minimum professional qualifications for managing agents, reflecting the recommendations made in Lord Best’s 2019 report, to ensure agents are appropriately skilled and knowledgeable. It also considers giving leaseholders stronger powers to veto or request a change in managing agent. These proposals do not apply to estate or letting agents.
- Protections for Fixed Service Charger Payers: The government is exploring whether leaseholders who pay fixed service charges should have similar rights to challenge the reasonableness of those charges, as variable charge payers do, and what additional transparency or protections may be appropriate.
- Appointment of Managers and Redress: Proposals include simplifying and broadening the criteria under which leaseholders can apply for the appointment of a manager due to poor management. The consultation also invites views on introducing a formal right for leaseholders to replace a managing agent, as recommended by Lord Best.
- Digitalisation and Accessibility: The government is looking at how to support wider use of digital communication to provide information to leaseholders, while ensuring that those who need or prefer paper-based communication are not disadvantaged.
- Safeguarding Leaseholder Funds: Views are sought on whether the current systems for protecting leaseholder funds remain adequate, especially in light of proposals to expand the use of reserve funds.
These proposals could radically reshape how residential buildings are managed and funded. Managing agents, more than most, understand the complexity of balancing compliance, value for money, and leaseholder expectations — and your insight into the real-world impact of these changes is invaluable.
Litigation Costs: A Key Issue That Needs Your Input
A recurring concern in leasehold reform is the recovery of litigation costs, which would include the costs associated in recovering arrears from leaseholders.
While the reforms aim to curb exploitative practices by some freeholders, the current thinking may risk over-correcting. Genuine freeholders and managing agents often have no option but to incur legal costs when enforcing the lease – for example, in service charge recovery or breaches of covenant.
If those costs are no longer recoverable through the service charge, where do they go? How are they covered?
Take Action: Submit your response before 21 August
This consultation offers a rare opportunity to shape legislation at both an implementation and policy level.
Access the consultation here:
Implementing the Leasehold and Freehold Reform Act 2024 an further leasehold reform.
