The appeal, launched by Suzanne Muna from the Social Housing Action Campaign, aims to stop landlords from paying “extortionate” charges for services to their leaseholders.
It also intends to set up a new legal body to regulate private and council service charges. This body will have the power to hit rogue property owners with heavy financial penalties and provide free support to tenants who want to dispute their service charge amount.
In the petition, the campaigner wrote: “We believe there is a scandal of service charge abuse in the housing sector; with extortionate annual rises in service costs, far exceeding inflation, and charges for services [that] have not, or could not, be provided.”
“Service charge abuse can cause immense financial strain, as well as emotional and physical damage to people who pay their charges directly. It also creates indirect costs for taxpayers when charges are paid via benefits.”
Campaign has six months to reach 100,000 signatures
The petition will run for six months and, if 100,000 people sign it, the issue can be debated in Parliament by MPs. So far, over 10,000 people have signed the petition in less than a week.
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As it stands, some property owners cap their service charge at 5% plus the rate of inflation, but this isn’t something they are legally required to do.
The fee is paid by the leaseholder to the landlord to cover which services the landlord takes care of. These include such activities as cleaning fees, garden maintenance and various insurances.
Whatever the service charge amounts to must be included in the tenancy agreement, but as long as the figures are included in it, there is no limit on what landlords can charge.
Meanwhile, the price of service charges has shot up for flats in England and Wales, rising by 52% since 2018. This is mostly due to additional fire safety measures since the Grenfell Tower fire in 2017.
Leasehold and Freehold Reforms Bill
In a bid to address unfair charges, a Leasehold and Freehold Reforms Bill was introduced to Parliament by the Department for Levelling Up, Housing and Communities (DLUHC) and is currently awaiting its final amendments before it is implemented.
Measures in the bill include greater transparency over service charges, plus measures to make it easier for people to extend their lease or buy their freehold. It also aims to extend the standard lease extension term to 990 years for houses and flats.
If the bill passes, leaseholders will no longer have to forfeit their home if they owe as little as £350, as is the case with the current law.
Also, leasehold houses would be banned, with more opportunities for leaseholders to purchase their freehold in the future also being part of the mooted reforms.
