Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Levelling Up, Housing and Communities, what assessment he has made of the adequacy of redress available to leaseholders who wish to challenge a service charge increase at a First-tier Property Tribunal, where the freeholder is in administration and the administrator either (a) refuses permission or (b) does not respond to a request to permit a hearing.

The Government believes very strongly that service charges should be transparent and communicated effectively. The law is clear that service charges and any increase in costs must be reasonable and, where costs relate to work or services, the work or services must be of a reasonable standard.

The Government believes that there should be a clear route to challenge or redress if things go wrong. Leaseholders may make an application to the First-tier Tribunal for it to make a determination on the reasonableness of their service charges, and may continue to do so even if the freeholder is in administration.

Where a freeholder is in Administration, an agent or administrator acting on its behalf is required to take on the responsibilities of the freeholder. This includes managing the building, arranging works and collecting service charges. This means that leaseholders still have the right to challenge the reasonableness of any charges.

It will be for the First-tier Tribunal to determine whether the case can continue to be heard. If the administrator does not engage in the proceedings, they risk the Tribunal finding that the leaseholder is not liable to pay the service charge in whole or in part, thereby potentially increasing the indebtedness of the landlord.

Section 24 of the Landlord and Tenant Act 1987 gives the First-tier Tribunal the power to appoint a manager to take over the landlord's right to manage the building under specific circumstances. As part of the process leaseholders are expected to nominate a suggested manager (which may include a managing agent), and the First-tier Tribunal will seek assurances that the nominated person is capable of performing the role before issuing an Order.