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 then resigns.

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 appropriate tribunal (the First-tier Tribunal in England and the Leasehold Valuation Tribunal in Wales) 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, and if the administrator then resigns.

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 means that leaseholders still have the right to challenge the reasonableness of any charges.

It is for the appropriate tribunal to determine whether the case can continue to be heard. In some cases the administrator might resign, and if for that reason does not engage in the tribunal proceedings on behalf of the landlord, the appropriate tribunal may still determine that the leaseholder is not liable to pay the service charge in whole or in part

Following the resignation of an administrator, an application to appoint a new administrator will generally be made. Such applications will be made to the Court by either the landlord company, the directors of the company, or a creditor.

Section 24 of the Landlord and Tenant Act 1987 gives the appropriate 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 appropriate tribunal will seek assurances that the nominated person is capable of performing the role before issuing an Order.