Service Charge Certification and Advisory
Managing the complexities of service charges efficiently and accurately.
With new rules for service charge accounting coming into effect in 2025, if you’re a social housing provider, local authority, or private landlord, you need a team you can trust to support you to ensure you remain compliant.
By working with our specialist team, clients benefit from high audit quality along with customer service, having access to specialists who only work in this area, rather than those who may also work in external audit.
With extensive experience in the sector, our team offers service charge certification and advisory solutions to social housing providers, local authorities, and private landlords. This work is performed by our specialist Grants and Assurance team, who sit within our wider Social Purpose and Non Profit team.
Service charge certification
Service charge certification
Service charge process reviews
Service charge process reviews
Service charge training
Service charge training
Assessing compliance with S20 Consultations
Assessing compliance with S20 Consultations
Lease reviews
Lease reviews
Reviews of budgeting and forecasting processes and cost control
Reviews of budgeting and forecasting processes and cost control
Service charge recovery reviews
Service charge recovery reviews
Assessment of readiness for the new Service Charge Accounting Rules
Assessment of readiness for the new Service Charge Accounting Rules
New Rules for Service Charge Accounting in UK 2025
The Leasehold and Freehold Reform Act 2024 is due to bring in some major changes to how service charges work, aimed at making things fairer for leaseholders.
Following a consultation in the summer of 2025 it is expected that the changes will come into force during 2026. A summary of the key changes can be found below.
Rules for Transparency and Demands
The new rules aim to standardise communication from landlords and managing agents.
- Landlords will have to use a specific, uniform format for all service charge demands. If they don’t, any clauses in the lease about late payments become unenforceable.
- The old '18-month' rule is being tightened. If a landlord wants to recover costs that are over 18 months old, they must first send a new, prescribed future demand notice. This is to ensure homeowners are not hit with unexpected bills for historical work.
- Leaseholders will have an enhanced right to ask for more detailed information. This includes invoices, contracts, and an explanation of how spending decisions were made. The right to request this information will cover up to the last six years.
- Fixed service charge payers will now have the same legal right to challenge their costs as those who pay variable charges.
Fairer Costs and Legal Action
The new rules are also rebalancing the power dynamic in disputes over service charges and costs.
- Hidden commissions collected within building insurance charges will be abolished and replaced by transparent 'permitted insurance fees'.
- For tenants challenging their landlord at tribunal may be able to recover their costs.
New Accounting and Reporting Standards
Landlords and managing agents will need to follow a stricter schedule and format for their accounting.
- The Act requires landlords to provide leaseholders with a written statement of accounts, including a balance sheet and income/expenditure report and reserve funds statement together with details of any deficits in collection.
- For larger buildings (with four or more dwellings), the annual accounts will need to be accompanied by a written report from a qualified accountant (standard of assurance yet to be defined).
- Mandatory annual reports, including lease details, fire safety assessments and planned works over the next two years.
- The written annual statement of account must be sent to leaseholders within six months of the end of the financial year.
- Landlords must provide a budget for the upcoming year in a standard format and it must accompany the initial service charge demand.
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