By Fenella Fern, Legal Adviser
The Directions apply to service charges for works of repair, maintenance or improvement payable by leaseholders of houses and flats within England whose landlord is a Social Landlord.
A social landlord means a Local Authority or Registered Social Landlord (usually a Housing Association).
The social landlord may waive or reduce service charges by an amount the landlord considers to be reasonable. This also applies to service charges already demanded or already paid so as to permit a refund.
The landlord should have regard to criteria set out in the Directions such as:
- whether the leaseholder or previous owner was notified of any estimate for the repair, maintenance or improvement before the purchase of the lease of the dwelling;
- whether the purchase price took account of the costs of the works;
- any benefit the leaseholder has received or will receive as a result of the works. This includes an increase in value of the property, energy efficiency, improvement in security and improvement in services or facilities;
- whether the purchase price paid by the leaseholder took account of the costs of the works;
- whether the landlord considers the lessee would suffer exceptional hardship in paying the service charge; or
- any other circumstance which the landlord considers relevant.
When considering an application to reduce service charges due to exceptional hardship the landlord should have regard to circumstances including:
- whether the dwelling is the leaseholder’s only or principal home;
- the total amount of service charges paid/payable by the leaseholder since they purchased the property;
- the financial resources available to the leaseholder;
- the leaseholder’s ability to pay over an extended period;
- the leaseholder’s ability to raise funds; and
- any other relevant considerations.
This gives social landlords wide discretion when considering an application for waiver or reduction of service charges related to repair, maintenance or improvement. Waivers or reductions can be made under these Directions in addition to any other waivers or reductions made.
You should also consider whether The Social Landlords Mandatory Reductions of Service Charges (England) Directions 2014 (PDF) apply.