Overview

This bill aims to reform leasehold law in England and Wales, primarily by limiting landlords' ability to recover excessive legal costs from leaseholders, ensuring that tribunal judgments are binding on all leaseholders under the same landlord, and requiring landlords to account transparently to all leaseholders regarding costs.

Description

The bill amends the Landlord and Tenant Act 1985 and the Commonhold and Leasehold Reform Act 2002. Key changes include:

• Cost Limitation: Landlords' recoverable legal costs will be capped at the fixed costs permitted under the Civil Procedure Rules, unless the court or tribunal finds the tenant's actions were frivolous, vexatious, or manifestly unreasonable (considering the landlord's conduct before and during proceedings).
• Binding Tribunal Judgments: Tribunal judgments against a landlord will be binding on all tenants under that landlord, preventing inconsistent charges. Landlords can only charge differently if approved by a tribunal, costs are uprated in line with the Consumer Prices Index, or a successful appeal eliminates further appeal possibilities.
• Transparency and Accounting: Landlords must send copies of court orders and tribunal judgments to all affected tenants within 14 and 21 days respectively, explaining any excess charges already levied. Any agreement attempting to circumvent these provisions will be void, except for post-dispute arbitration agreements.

Government Spending

The bill is not expected to significantly increase or decrease government spending. The primary impact is a shift in cost-bearing from leaseholders to landlords, in cases where excessive legal costs have been incurred.

Groups Affected

• Leaseholders: Will benefit from protection against excessive legal costs and greater transparency in service charges. They will gain more control and fairness in disputes with landlords.
• Landlords: Will face restrictions on recoverable legal costs and greater accountability in managing service charges. This may increase their administrative burden but should encourage more responsible behavior.
• Tribunals: Will have an increased workload to handle appeals against cost limitations and to manage applications for service charge variations.

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