The Department for Communities and Local Government (DCLG) has introduced an upper limit on the amount leaseholders can be charged for some categories of repair work by councils and housing associations.
The DCLG stated that the new law would prevent social landlords imposing excessive charges on leaseholders for major repair, maintenance or improvement works when they are entirely or partly funded by the Homes and Communities Agency or a government department.
Each of the discretionary and mandatory caps limit the amount of service charges that may be recoverable from leaseholders in any five year period to £10,000 outside London, with a cap of £15,000 in London.
Eric Pickles confirmed that the changes are being implemented because charging “excessive amounts” for repairs can have a serious impact on “some of the most vulnerable people in society”.
The DCLG has stated that the cap will only apply to those who occupy their properties as their “only or principle” home and that housing associations would need to pay for the outstanding costs of the work themselves. In practice, it remains unclear how that deficit will be filled in circumstances where housing associations are already struggling to balance their finances.