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New service charge regluations

publication date: Sep 17, 2007
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From 1 October 2007, all demands made to leaseholders for payment of a service charge must be accompanied by a summary of their rights and obligations. Failure to provide the summary will mean that the leaseholder concerned is legally entitled to withhold payment.

The new regulations provide the wording for the summary, and the legislation states that any late or non payment of a service charge as a result of the new rules is not subject to the terms of the lease, such as interest charges.

Within the summary, leaseholders will find a reference to the Leasehold Valuation Tribunal, a service that is run by the Government sponsored Residential Property Tribunal Service to resolve a range of residential disputes that can arise between landlords, leaseholders and tenants. The Government recently set out further plans to help protect leaseholders paying service charges and improve transparency. The proposals, which are subject to consultation until 4 October, would require landlords to provide leaseholders an annual statement showing how their service charges are spent.

As the new regulations take effect, RPTS is keen to highlight their straightforward and user friendly procedures, and how they can be used to settle what could otherwise be stressful and time consuming disputes, such as those arising over service charges, fair rents and leasehold enfranchisement. RPTS aims to offer an efficient and user-friendly system. Not all cases involve lawyers, with many parties choosing to represent themselves, and the service is cost effective, with application fees ranging between £50 and £500 depending on the nature of the dispute.

The RPTS is strictly impartial ˆ it is available equally to leaseholders, tenants and landlords - and every case is reviewed and decided on its merits. Hearings take place locally or at one of RPTS’ five regional offices. If applicants have mobility problems, panel hearings can even be held in their own homes.

For further information, visit the RPTS website at www.rpts.gov.uk