Leasehold and Freehold Reform Act 2024

58 Enforcement of duties relating to service charges

(1) The LTA 1985 is amended as follows.

(2) Omit section 25 (offences).

(3) Before section 26 insert—

“25A Enforcement of duties relating to service charges

(1) A tenant may make an application to the appropriate tribunal on the ground that the landlord—

(a) demanded the payment of a service charge otherwise than in accordance with section 21C(1);

(b) failed to provide a report in accordance with section 21E.

(2) On an application made under subsection (1), the tribunal may make one or more of the following orders—

(a) an order that the landlord must, before the end of the period of 14 days beginning with the day after the date of the order—

(i) demand the payment of a service charge in accordance with section 21C(1);

(ii) provide a report in accordance with section 21E;

(b) an order that the landlord pay damages to the tenant for the failure;

(c) any other order which the tribunal considers consequential on an order under paragraph (a) or (b).

(3) A person (“C”) may make an application to the appropriate tribunal on the ground that another person (“D”) failed to comply with a requirement under section 21F or 21G.

(4) On an application made under subsection (3), the tribunal may make one or more of the following orders—

(a) an order that D comply with the requirement before the end of the period of 14 days beginning with the day after the date of the order;

(b) an order that D pay damages to C for the failure;

(c) any other order which the tribunal considers consequential on an order under paragraph (a) or (b).

(5) Damages under this section may not exceed £5,000.

(6) The appropriate authority may by regulations amend the amount in subsection (5) if the appropriate authority considers it expedient to do so to reflect changes in the value of money.

(7) A landlord may not for any purpose set off damages payable by the landlord to a tenant under this section against any present or future liability of the tenant to the landlord.

(8) Where a landlord is “the payee” for the purposes of section 42 of the Landlord and Tenant Act 1987, and the landlord uses sums that are held on trust under that section to pay damages under this section, such use is a breach of that trust.

(9) Amounts payable by way of damages under this section are not to be regarded as relevant costs to be taken into account in determining the amount of any variable service charge payable by a tenant (whether or not a tenant to whom the damages are paid).

(10) A lease, contract or other arrangement is of no effect to the extent that it would make provision contrary to subsections (7) to (9).

(11) Regulations under this section—

(a) are to be made by statutory instrument;

(b) may make provision generally or only in relation to specific cases;

(c) may make different provision for different purposes;

(d) may include supplementary, incidental, transitional or saving provision.

(12) A statutory instrument containing regulations under this section is subject to the negative procedure.”