Leasehold flats: service charge and legal cost reforms now have dates — what changes for investors on 1 April and 1 November 2027
The commencement order for the service charge and legal cost sections of the Leasehold and Freehold Reform Act 2024, made on 25 October 2026, gives England two working dates: 1 April 2027 for the bar on freeholders' legal costs, and 1 November 2027 for prescribed demand forms, accounts and annual reports (private landlords) and the insurance and administration charge rules (all landlords). If you own or are buying a leasehold flat in England, here is what you will receive, what you can no longer be charged and what to check now. Our solicitors and legal guide for property investors covers conveyancing.
"The following provisions of the Act come into force in relation to England on 6th November 2026—"
In practice: 6 November 2026 switched on the powers to make the detailed regulations; no landlord duty started.
"A landlord's litigation costs are not to be regarded as relevant costs to be taken into account in determining the amount of a variable service charge…"
What this means for investors: from 1 April 2027 the freeholder's legal bills cannot go through the service charge without a court or tribunal order.
"The government will introduce a standardised service charge demand form."
In practice: from 1 November 2027 a private landlord may only demand a service charge in the prescribed form, or its late-payment terms cannot be enforced.
What changed
SI 2026/1128, made on 25 October 2026, commences sections 53 to 63 of the Act, and parts of sections 68 to 71, in England in three stages.
Regulation 2, quoted above, commenced parts of sections 54 to 63 and 68 to 70 on 6 November 2026 only "for the purpose of exercising specified powers to make regulations" (Explanatory Note).
- regulation 2: powers to make the detailed regulations; no landlord duty.
- regulation 3: sections 53, 54, 57, 62 and 63 (fixed charges, future demand notices, information, legal costs) for every landlord.
- regulation 4: sections 55, 56 and 58 (demands, accounts, reports) for private landlords; sections 59 to 61 (insurance, administration charges) for social landlords too.
- regulation 5: sections 55, 56 and 58 for social landlords.
The table gives each section by its title in the Act's contents.
| Starts | Section | Title in the Act | What it does |
|---|---|---|---|
| 1 April 2027 | 53 | Extension of regulation to fixed service charges | Redefines "service charge" and adds "variable service charge" in section 18 of the Landlord and Tenant Act 1985, bringing fixed charges inside the regime |
| 1 April 2027 | 54 | Notice of future service charge demands | Replaces the written notice under the 18-month rule with a "future demand notice" in a specified form, with specified information |
| 1 April 2027 | 57 | Right to obtain information on request | The leaseholder can require specified information on service charges, services, repairs, maintenance, improvements, insurance or management, inspect documents and take copies |
| 1 April 2027 | 62 and 63 | Limits on rights of landlords to claim litigation costs from tenants; Right of tenants to claim litigation costs from landlords | The landlord's litigation costs are not relevant costs and cannot be an administration charge without a court or tribunal order; the leaseholder can apply for an order that the landlord pays the leaseholder's costs |
| 1 November 2027 (social landlords: 1 November 2028) | 55, 56 and 58 | Service charge demands; Accounts and annual reports; Enforcement of duties relating to service charges | Demands only in the specified form; a statement of account with an accountant's report within six months of the period end (where costs are shared with tenants of at least three other dwellings) and an annual report within one month; tribunal orders to comply within 14 days and damages of up to £5,000. Social landlords are private registered providers of social housing, local housing authorities and joint venture landlords |
| 1 November 2027 | 59 | Limitation on ability of landlord to charge insurance costs | "Excluded insurance costs" cannot go through the service charge; repayment and damages of up to three times the amount |
| 1 November 2027 | 60 | Duty to provide information about insurance to tenants | Specified insurance information after the policy is taken out or renewed, without being asked; damages of up to £5,000 |
| 1 November 2027 | 61 | Duty of landlords to publish administration charge schedules | A charge is payable only if it appeared on a published schedule for the 28 days ending with the day it is demanded; damages of up to £1,000 for not publishing. Applies to landlords other than local authority, National Park and new town landlords, unless the tenancy is a long tenancy |
Section 62 adds the same bar to administration charges in Schedule 11 to the Commonhold and Leasehold Reform Act 2002: "No administration charge is payable by a tenant of a dwelling in respect of the landlord's litigation costs." A court or tribunal may lift either bar "on an application by a landlord", never for enfranchisement, lease-extension or right-to-manage costs; regulation 6 keeps the old rules for proceedings issued before 1 April 2027.
From 1 November 2027 the First-tier Tribunal can order a private landlord to comply within 14 days and pay damages (section 58, new section 25A):
"Damages under this section may not exceed £5,000."
In practice: a demand outside the prescribed form, or a missing annual report, can cost the landlord up to £5,000, which it cannot add to the service charge. On our reading of the order, regulation 3 also opens this remedy from 1 April 2027 where a landlord fails to answer an information request under section 57.
So far the content comes from the government response of 15 July 2026: a demand form with an annual budget compared against the previous period; an annual report on the building's condition and planned major works; accounts to a prescribed "form and minimum content" with an accountant's statement; and administration charge schedules, with "revised schedules to be published at least 28 days before any new charges take effect". For information requests "the government will legislate so that landlords must provide information going back six years", with up to three months to inspect; these periods are not in the Act itself.
The response promised "a minimum of five complementary statutory instruments" "later this year"; by 7 November 2026 none had appeared on legislation.gov.uk, where SI 2026/1128 remains the only commencement order for sections 53 to 63. The order fixes the dates; the regulations will fix the forms, content and timescales. The response's own expectation: "Leaseholders, including shared owners, and tenants of Private Registered Providers (PRPs) will start to see changes during 2027."
Who it affects
The duties fall on the landlord under the long lease — the freeholder, a head lessee or a resident management company — and the investor who owns a leasehold flat is the "tenant" the Act protects, whether they live in it or let it.
Section 71 applies Part 4 to every lease "whether the lease was entered into before or after the section comes into force", so a lease granted in 2019 and a lease granted on completion in 2028 are treated alike. An investor who owns a freehold block and grants long leases carries the duties.
A freehold house or freehold HMO is outside: no long lease, no variable service charge. Estate charges on freehold estates sit in Part 5 of the Act, not yet commenced. A leasehold flat or house let as an HMO is covered.
Managing agents may act for the landlord, but "responsibility for compliance will remain with the person on whom the duty is imposed by legislation" (response, section 6), so a tribunal claim is against the landlord named in your lease.
Quartico's reading: for a buy-to-let flat owner the change is clearer information, six years of records once regulations fix the period, and no freeholder legal costs without a court or tribunal order; nothing in Part 4 changes the terms with your own tenant. Take legal advice on your own lease.
What it means in numbers
The Act sets no cap on a service charge; it changes what goes into one, what is disclosed and what a tribunal can award. Our buy-to-let investment guide uses an illustrative £180,000 apartment let at £1,050 a month; the example adds a service charge, with the yield arithmetic in how buy-to-let returns are calculated. No Quartico page states a service charge figure, so the £1,800 is an illustration, not a developer projection; ground rent is left out.
Example: a £180,000 leasehold flat with a £1,800 service charge (illustrative, not a forecast)
| Line | Figure | Working |
|---|---|---|
| Purchase price | £180,000 | Illustrative, from the buy-to-let investment guide |
| Rent | £1,050 a month; £12,600 a year | 1,050 × 12 |
| Gross yield | 7.0% | 12,600 ÷ 180,000 |
| Service charge (assumption) | £1,800 a year | No Quartico figure is published |
| Service charge as a share of rent | 14% | 1,800 ÷ 12,600 |
| Yield after the service charge | 6.0% | (12,600 − 1,800) ÷ 180,000 |
Property values and rental income can fall, and returns are not guaranteed. The 6.0% stands alone: the guide's net yield already deducts an assumed insurance and maintenance line, and a flat's buildings insurance sits inside the service charge.
Three money points follow:
- From 1 April 2027 litigation costs need a court or tribunal order before they reach the service charge or an administration charge, in all cases, "whether defended, undefended or admitted" (the response's words).
- From 1 November 2027 a non-compliant demand or missing annual report can bring the £5,000 damages above; the demand is not cancelled, but its late-payment interest and fees cannot be enforced.
- From 1 November 2027 "excluded insurance costs" cannot go through the service charge: section 59 says they "are not to be regarded as relevant costs", with repayment plus damages of up to three times the amount if they are. They are payments to arrange or manage the insurance, such as commissions, that are not "permitted insurance payments", which regulations have yet to define.
- £5,000damages cap under new section 25A; £1,000 for an unpublished administration charge schedule
- Six yearsinformation look-back promised in the 15 July 2026 response, not yet in regulations
- 28 daysunder the Act, a charge must have been on a published schedule for the 28 days ending with the demand day
Take legal advice on your own lease before relying on this.
What to do and by when
Collect the documents now and use each new right as its date arrives; how buying an investment property works shows where the lease checks sit.
- Now: get the service charge budget, accounts and insurance summary from the managing agent; keep them with the lease.
- Now, off-plan: ask the developer for the estimated service charge, ground rent and managing agent; have your solicitor check the cost-recovery and insurance clauses.
- From 1 April 2027: request information under section 57 before a resale purchase or at completion.
- From 1 April 2027: expect a prescribed future demand notice (section 54) for any late demand.
- From 1 November 2027: expect the prescribed demand form, accounts, annual report, insurance information and administration charge schedule (social landlords: first three from 1 November 2028).
- Diary 1 April and 1 November 2027; watch legislation.gov.uk for the detailed regulations.
Where this sits
This post covers only these Part 4 dates; the Act's enfranchisement valuation changes (including the end of marriage value) and the Commonhold and Leasehold Reform Bill are separate and not yet in force. For the steps from reservation to completion, read how buying an investment property works.
Sources (8)
All pages accessed 7 November 2026.
- UK Government (MHCLG), The Leasehold and Freehold Reform Act 2024 (Commencement No. 4 and Saving Provision) (England) Regulations 2026, SI 2026/1128 (C. 94), made 25 October 2026 — https://www.legislation.gov.uk/uksi/2026/1128/made (regulation 6: https://www.legislation.gov.uk/uksi/2026/1128/regulation/6/made )
- UK Parliament, Leasehold and Freehold Reform Act 2024 (c. 22), contents, revised text up to date to 7 November 2026 — https://www.legislation.gov.uk/ukpga/2024/22/contents
- Leasehold and Freehold Reform Act 2024, sections 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63 and 71 — https://www.legislation.gov.uk/ukpga/2024/22/section/53 and the corresponding page for each section number
- Landlord and Tenant Act 1985, section 20B (the 18-month rule) — https://www.legislation.gov.uk/ukpga/1985/70/section/20B ; section 38 (appropriate tribunal) — https://www.legislation.gov.uk/ukpga/1985/70/section/38
- MHCLG, Government response to the Strengthening leaseholder protections over charges and services consultation, 15 July 2026 — https://www.gov.uk/government/consultations/strengthening-leaseholder-protections-over-charges-and-services-consultation/outcome/government-response-to-the-strengthening-leaseholder-protections-over-charges-and-services-consultation
- MHCLG and Matthew Pennycook MP, Stronger leasehold protections in crackdown on hidden fees, press release, 15 July 2026 — https://www.gov.uk/government/news/stronger-leasehold-protections-in-crackdown-on-hidden-fees
- legislation.gov.uk, new UK statutory instruments and draft statutory instruments published 2 to 7 November 2026 — https://www.legislation.gov.uk/new/uksi/2026-11-02 to /2026-11-07 and https://www.legislation.gov.uk/new/ukdsi/2026-11-02 to /2026-11-07
- Quartico, buy-to-let investment guide, illustrative example flat (£180,000, let at £1,050 a month)
Contains public sector information licensed under the Open Government Licence v3.0.