Leasehold and Freehold Reform Act 2024

Administration charges

83 Meaning of “administration charge”

(1) For the purposes of this Part, “administration charge” means an amount payable, directly or indirectly, by an owner of a dwelling—

(a) for or in connection with—

(i) the grant of approvals in connection with a relevant obligation, or

(ii) applications for such approvals;

(b) for or in connection with the provision of information or documents by or on behalf of an estate manager;

(c) for or in connection with—

(i) the sale or transfer of land to which a relevant obligation relates, or

(ii) the creation of an interest in or right over that land;

(d) in respect of a failure by the owner to make a payment by the due date under a relevant obligation;

(e) in connection with a breach (or alleged breach) of a relevant obligation.

(2) But “administration charge” does not include an amount payable by a tenant of a dwelling in a case where all of the following conditions are met—

(a) the tenant’s lease specifies that only a person who has attained a minimum age may occupy the dwelling;

(b) the amount is payable under a term of the tenant’s lease or is otherwise payable in connection with the tenant’s lease;

(c) the amount is payable if—

(i) the tenant’s lease is granted, assigned or terminated,

(ii) a lease of the dwelling which is inferior to the tenant’s lease is granted, assigned or terminated, or

(iii) there is a change in the person or persons occupying the dwelling;

(d) the amount is fixed or is calculated by a method determinable in advance;

(e) any other conditions specified in regulations made by the appropriate authority.

(3) The appropriate authority may by regulations make provision (including provision amending this Act) so as to amend the definition of “administration charge”.

(4) A statutory instrument containing regulations under this section (whether alone or with other provision) is subject to the affirmative procedure.

84 Duty of estate managers to publish administration charge schedules

(1) If an estate manager expects to charge an administration charge, the estate manager must produce and publish an administration charge schedule.

(2) An “administration charge schedule” is a document setting out—

(a) the administration charges the estate manager considers may be payable, and

(b) for each charge—

(i) its amount, or

(ii) if it is not possible to determine its amount before it becomes payable, how its amount will be determined if it becomes payable.

(3) The estate manager—

(a) may revise a published administration charge schedule, and

(b) must publish a revised schedule.

(4) The estate manager must provide a person with the administration charge schedule for the time being published setting out the charges that may be payable by that person.

(5) The appropriate authority may by regulations make provision as to—

(a) the form of an administration charge schedule;

(b) the content of an administration charge schedule;

(c) how an administration charge schedule must be published;

(d) how an administration charge schedule is to be provided to owners of dwellings.

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

85 Enforcement of section 84

(1) An owner of a dwelling may make an application to the appropriate tribunal on the ground that an estate manager has not complied with section 84 or regulations made under it.

(2) The tribunal may make one or both of the following orders—

(a) an order that the manager comply with section 84 or regulations made under it before the end of the period of 14 days beginning with the day after the date of the order;

(b) an order that the manager pay damages to the owner for the failure.

(3) Damages under subsection (2)(b) may not exceed £1,000.

(4) The appropriate authority may by regulations amend the amount in subsection (3) if the appropriate authority considers it expedient to do so to reflect changes in the value of money.

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

86 Limitation of administration charges

(1) An administration charge is payable only to the extent that the amount of the charge is reasonable.

(2) An administration charge is payable to an estate manager only if—

(a) its amount appeared for the required period on an administration charge schedule published under section 84, or

(b) its amount was determined in accordance with a method that appeared on the published administration charge schedule for the required period.

(3) “The required period” is the period of 28 days ending with the day on which the administration charge is demanded to be paid.

(4) An administration charge is not payable to an estate manager if—

(a) the charge relates to the same matter as, or a matter of a similar nature to, a matter for which an administration charge is payable by another person to the estate manager,

(b) the amount of the charge is different from the charge payable by that other person, and

(c) it is not reasonable for the amount of the charge to be different.

87 Determination of tribunal as to administration charges

(1) An application may be made to the appropriate tribunal for a determination as to whether an administration charge is payable and, if it is, as to—

(a) the person by which it is payable,

(b) the person to which it is payable,

(c) the amount which is payable,

(d) the date on or by which it is payable, and

(e) the manner in which it is payable.

(2) Subsection (1) applies whether or not any payment has been made.

(3) No application under subsection (1) may be made in respect of a matter which—

(a) relates to a dwelling, and has been agreed or admitted by every owner of the dwelling,

(b) has been, or is to be, referred to arbitration pursuant to a post-dispute arbitration agreement to which every owner of the dwelling is a party,

(c) has been the subject of determination by a court, or

(d) has been the subject of determination by an arbitral tribunal pursuant to a post-dispute arbitration agreement.

(4) But an owner of a dwelling is not to be taken to have agreed or admitted any matter by reason only of having made any payment.

(5) An agreement (other than a post-dispute arbitration agreement) is void in so far as it purports to provide for a determination—

(a) in a particular manner, or

(b) on particular evidence,

of any question which may be the subject matter of an application under subsection (1).