Housing associations could face a multimillion-pound bill if new rules on service charges for tenants and leaseholders come into force.

The Commonhold & Leasehold Reform Act, which is now out for consultation, would oblige associations to send individual service charge statements to their leaseholders and assured tenants paying variable service charges.

These statements would have to be checked by accountants.

The costs of this administration and accountancy would likely to run into millions.

But associations say they already have to meet strict financial regulations and that the new rules simply duplicate this work at significant additional cost.

The National Housing Federation is to oppose the idea in its response to the consultation.

NHF policy officer Fola Ogunjobi said: “The reason this was introduced was to make leaseholders aware of how landlords deal with their money and nobody would be against that.

“However, this does not reflect the fact that our sector is under close regulation.”

Source

Housing Today