Quiz - how well do you understand your lease?
Understand the key things you should know about your lease. If you are a purchaser, this can help make sure your solicitor has covered all of these points and explained them clearly to you.
By Fenella Fern, Legal Adviser
The Social Landlords Mandatory Reductions of Service Charges (England) Directions 2014 (PDF)
These directions, popularly known as “Florrie’s Law”, came into force on 12 August 2014. They apply to leaseholders
- of social landlords,
- in England,
- who are individuals (not a company), and
- who occupy their house or flat as their only or principal home.
A social landlord means a Local Authority or Registered Social Landlord (usually a Housing Association).
The Directions apply to service charges for repair, maintenance or improvement carried out wholly or partly with relevant assistance from a programme as specified in the directions. This is likely to include roof works, window replacement and external cladding.
The programmes are:
- the Decent Homes Backlog Funding provided through the 2013 Spending Round, and
- any other assistance for the specific purpose of carrying out works of repair, maintenance or improvement provided by
- any Secretary of State, or
- the Homes and Communities Agency.
The landlord’s application for assistance must be made on or after the date the Directions came into force,12 August 2014.
The Directions limit service charges relating to the costs of repair, maintenance or improvement
- to £15,000 for a dwelling located within a London authority, and
- to £10,000 for a dwelling located elsewhere in England
- within any five year period.
London Authorities are defined as a London Borough Council and the Common Council of the City of London.
The mandatory capping requirements only apply to service charges payable by someone who is a qualifying leaseholder on the date on which the works commence. This should be noted when purchasing a leasehold property that is part of an ongoing major works project.
These Directions are fairly limited in scope and it is also worth bearing in mind The Social Landlords Discretionary Reduction of Service Charges (England) Directions 2014 (PDF).