The Leasehold and Freehold Reform Act: What's next?

The Leasehold and Freehold Reform Act 2024 marks a significant step in the Government's wider programme to reform leasehold ownership and strengthen protections for leaseholders. Its proposed reforms focus on making service charges, building insurance, administration charges, and litigation costs more transparent, while giving leaseholders clearer rights to information and a stronger basis to challenge unreasonable costs.

But what can we expect from the Act going forward? And which changes should leaseholders be aware of?

In this article, Charlotte McMurchie, partner and head of real estate dispute resolution, discusses the next steps for the Act, following the Government's latest consultation.

You can access all of the relevant annex documents listed below here.

What is changing for leaseholders?

The Government consulted on the implementation of key leasehold reforms between 4 July and 26 September 2025 and published a response on 15 July 2026. The response explains how the Leasehold and Freehold Reform Act 2024 is expected to be brought into force, with a focus on increased protection for leaseholders.

A central theme of the reforms is the need to address longstanding concerns around opaque service charge demands, limited information about building insurance arrangements, the recovery of landlords' litigation costs and the impact of escalating ground rents. These issues have been a consistent challenge for leaseholders, particularly where the information needed to assess or challenge costs has been difficult to obtain.

When will the reforms come into force and what will they be?

The Act is intended to standardise and increase the transparency of service charge information so that leaseholders are better able to understand, compare, and challenge sums they consider unreasonable. However, many of the Act's practical effects will depend on detailed secondary legislation, which is expected to be introduced in stages. The Government has indicated that the relevant measures will be implemented as soon as possible, with a significant package of reforms expected during 2027.

At the heart of the 2024 Act is a package of measures designed to give leaseholders clearer, more consistent information about the sums they need to pay and the way their building is managed.

The reforms are expected to include:

• Standardised service charge demands
• An annual report containing key management and building information
• Prescribed administration charge schedules
• Clearer insurance disclosures
• New controls on the recovery of landlords' litigation costs.

Further reforms are expected through secondary legislation and the forthcoming Commonhold and Leasehold Reform Bill. These include proposals to limit ground rents, abolish forfeiture, restrict the use of leasehold for new flats, introduce mandatory reserve funds and strengthen the regulation of managing agents.

Together, these changes are intended to:

• Make leasehold management more accountable
• Reduce barriers to challenge
• Support a long-term transition towards commonhold as the default form of flat ownership
• Make service charge demands easier to understand and compare
• Reduce the scope for uncertainty about what information a landlord or managing agent must provide

In practice, the effectiveness of the reforms will depend heavily on the detailed secondary legislation that will prescribe the form, content and timing of the new requirements. The draft forms of demands appended to the Bill (Annex B2) can be found here.

Reforms to the Section 20 procedure

The Government is also considering changes to the consultation process for major works, including reforms to the Section 20 procedure. This is likely to be important where leaseholders are asked to contribute to significant works and need timely, meaningful information about what is proposed, why it is required and how the costs will be met.

Alongside these transparency measures, the regulation of managing agents is expected to become increasingly significant. As the Government continues to promote commonhold as the default tenure for flats, professional standards in building management are likely to come under closer scrutiny, with proposals including mandatory qualifications for managing agents in England.

Although the Act has already been passed, many of the most practical changes still require commencement and supporting regulations. The Government has indicated that the relevant secondary legislation will be brought forward as soon as possible.

Annual reports and service charge information

One of the most practical transparency measures is the proposed annual report. This report is intended to give leaseholders a clearer picture of how their building is being managed, including its general condition, key management information and any significant works that may be on the horizon.

The precise form and content of the annual report will be prescribed by secondary legislation. However, the Government’s response indicates that it is expected to include:

• Key contact details
• Important lease and service charge dates
• Basic information about the condition and health of the building
• Details of previous and planned statutory surveys
• Information about any planned major works over the following two years.

Where major works are anticipated, the annual report should also explain whether the expected costs are covered, in whole or in part, by a reserve fund. This should help leaseholders understand not only what works may be required, but also how those works are likely to be funded.

The report is also expected to cover:

• The administration charge schedule
• Complaints and dispute-handling procedures
• Contact details for the Leasehold Advisory Service
• Leaseholders’ rights to request key documents
• Details of formal actions or statutory processes affecting the building, such as enforcement notices, relevant litigation or enfranchisement claims, subject to data protection restrictions.

The annual report must be provided each year. The Government has indicated that private sector landlords will receive 12 months’ notice before the new measures come into force, while registered providers will receive 24 months’ notice.

A related reform will require the initial service charge demand to be accompanied by an annual budget for the relevant block, building or development. The budget should include a comparison with expenditure in the previous year, helping leaseholders understand whether costs have changed and, if so, why.

There will also be a bespoke demand form for local authority landlords, reflecting the different context in which those landlords operate.

The draft annual report form appended to the consultation (Annex A) can be found here.

New future demands notice

There will be a requirement to provide leaseholders with key information about why they may face a delayed demand for a service charge payment and when that demand is expected to be paid.

At present, there is no cap on costs where the time limit or estimate set out in the initial future demand notice is exceeded. It will therefore be important to see how this reform operates in practice.

The draft future demand notice appended to the consultation (Annex C) can be found here.

A new right to request information

The Government’s consultation response confirms that it intends to prescribe a list of information that landlords must provide to leaseholders on request. This will relate to service charges and the management, maintenance, repair, improvement and insurance of the building.

This leaseholder’s right to request information will cover a period of the six years prior to the request itself and the landlords’  grounds for refusal will be limited. The Government envisages a sliding timescale for responding to requests.

Where a landlord is unable to provide information, they will need to explain this to leaseholders. Where a landlord needs information from 3rd parties in order to provide the information to the leaseholder, the Government has prescribed a maximum time period of 15 days within which the landlord must request that information.

Leaseholders’ existing right to inspect documents in person will be retained. Reasonable arrangements for inspection will need to be made within three calendar months of the request.

Administration charges

Landlords will be required to work to a prescribed schedule where they demand, or propose to demand, administration charges.

In this document, landlords will be required to set out the exact charge, or if that is not possible, the methodology for calculating the charge. This information will form part of the annual report and also needs to be provided on request from a leaseholder. 12 months' notice will be given of the implementation of this change. The draft form of Schedule appended to the Bill ( Annex D) can be found here.

Greater transparency around buildings insurance

The lack of transparency surrounding buildings insurance arrangements has been a recurring concern for leaseholders.

The Government is seeking to address this by requiring disclosure of relationships and arrangements between landlords, managing agents, brokers and insurers.

Once the reforms come into force, leaseholders will receive clearer information about insurance procurement, pricing and cover, together with clear deadlines and a mechanism to help them identify and challenge delays. The precise nature of this mechanism has not yet been explained and is expected to be clarified through the necessary secondary legislation.

As with the administration charge reforms, landlords will receive 12 months’ notice before these requirements are implemented.

The draft form of the template for insurance information appended to the Bill (Annex E) can be found here.

Standardised service charge accounts

The form and minimum content of service charge accounts will also be prescribed. The accounts are expected to contain clear financial and, where appropriate, comparative information.

There will be a requirement for accounts to be prepared and signed off by appropriately qualified professionals. ISRS 4400 will be the default reporting standard, with ISA 800 applying where the lease requires an audit. An accountant’s statement is also expected to accompany the accounts.

The Government expects annual accounts to be provided within six months of the end of the relevant service charge year, regardless of the terms of the lease.

The proposed draft forms appended to the Bill (Annex F) and (Annex G) can be found here.

Changes to litigation costs

One of the most significant changes introduced by the reforms is a restriction on landlords’ ability to recover litigation costs.

The 2024 Act defines litigation costs as any costs incurred, or to be incurred, by a person in connection with relevant proceedings to which they are a party.

Under the new regime, landlords will generally only be able to recover litigation costs through the service charge with the approval of the Court or Tribunal. This reverses the current position, under which leaseholders generally need to make an application under section 20C of the Landlord and Tenant Act 1985 to prevent the recovery of legal costs through the service charge.

For administration charges, a targeted, threshold-based exemption is proposed, allowing lower-value litigation costs to be recovered without judicial approval. Limited, time-limited flexibilities will also apply to resident-led buildings.

Finally, leaseholders are likely to be able to recover their own litigation costs in specified circumstances.

What do these changes mean for leaseholders?

Although the Leasehold and Freehold Reform Act 2024 is already introducing key legislative changes, many of its most significant practical reforms are still to come. The detail will be shaped by the secondary legislation and regulations that bring the provisions into force.

For leaseholders, the key changes to consider are the introduction of standardised service charge information, annual reports, greater rights to request information, clearer insurance disclosures and new restrictions on the recovery of landlords’ litigation costs.

With further reforms expected during 2027, landlords, managing agents and leaseholders will need to prepare for a substantial change in the way leasehold properties are managed and the information that must be provided to leaseholders.

For more information on the Leasehold and Freehold Reform Act 2024, please contact Charlotte McMurchie via [email protected] or 0191 211 7979.