Service charge transparency requirements consultation – our response

We’ve responded to the Department for Levelling Up, Housing and Communities’ (DLUHC) consultation on service charge transparency requirements for the ongoing costs of implementing regulatory requirements in existing buildings that are 18m or over in height.

As part of the consultation, DLUHC sought views on:

• The proportionality of the transparency requirements.
• The administrative and operational changes required.
• The timings required to implement any changes to service charge mechanisms.

Summary of our response

We agree that in the future, landlords must identify the element of the service charge spent on costs involved in the building safety regime and that the best place to do this is through service charge demands. We also agree that landlords should identify which element of the service charge relates to the cost of the building safety regime in the annual service charge statement, however there is concern about the potential complexity of providing such detail in every statement rather than on request.

In regards to the implementation of the requirements, our members told us that there will be both administrative and operational changes needed to comply with these new service charge requirements.

We also believe that further work is needed to understand the implications for service charge transparency in buildings where a housing association deals with a managing agent or is not the freeholder. Feedback from our members suggests more information is needed for them to properly consider charging arrangements for situations where the housing association doesn’t have ultimate control over a building.