Concerns about the fairness and transparency of estate management charges have prompted the Government to launch a series of consultations aimed at reforming the rules for freehold and leasehold properties. By gathering insights, these consultations seek to shape a clearer and more equitable framework for property ownership and management.
The Leasehold and Freehold Reform Act 2024 (LAFRA) passed on 24 May 2024 included new provisions about estate management charges and the consultation on "Enhanced protections for homeowners on freehold estates" seeks views on how to implement the new framework.
Estate management charges are charged on freehold homeowners on private estates to recover costs for the provision, maintenance and repair of items such as roadways, drains, sewers and communal spaces where these have not been adopted by the local authority. This is similar to the payment, by the owner of a leasehold flat, of service charges for the upkeep of the building. However, unlike service charges, which are subject to a raft of statutory regulation, until now freehold homeowners have very little protection with regard to the charging and collection of estate management charges.
Broadly speaking, the provisions of LAFRA seek to give freehold owners similar protections to those enjoyed by leaseholders, making the process for charging and collecting estate management fees clearer and fairer.
What does this consultation cover?
Standard form annual reports, budgets and demands
A standardised report will need to be provided by estate managers within a month from the end of the accounting year. The report will provide a certain minimum amount of information to the homeowners about the estate, although the manager will, of course, be free to provide more information should they wish. The estate manager will need to provide a budget within a timescale (yet to be determined) and demands for payment will have to follow a prescribed format. The consultation seeks views on the information required to be supplied to homeowners, the form of the documents and the applicable timescales.
Consultation before incurring costs on major works
As part of the regulation of estate management charges, estate managers will have to consult with homeowners before carrying out major works on an estate. The government has proposed a £600 cost per household threshold to trigger the consultation requirement, but the final amount, along with the proposals for the consultation process, will be decided by the consultation responses.
Provision of relevant information to homeowners
The responses will also determine the content of new regulations about management information which estate managers will have to give to homeowners and how quickly they will need to provide it. Although this is relevant to estate management and charges, it also ties in with the government's drive to speed up the conveyancing process by ensuring that as much up-front information as possible is available on the sale of a property.
What will the government do with the responses?
Although LAFRA was enacted in 2024, much of the Act remains redundant as it is reliant on the passing of secondary legislation before it can take effect. The government has launched a number of consultations relating to the regulation of freehold and leasehold properties and the buying and selling process in recent years. The responses from these consultations will help shape the detailed rules and regulations that must be put in place before new property laws can take effect.
Further consultation
Simultaneously with this consultation the government has also launched a consultation on "Reducing the prevalence of private estate management arrangements" in order to better understand the increasing reliance on private estate management charges to recover amenity costs (for example, maintenance costs for roads and communal spaces) instead of these being adopted and maintained by the local authorities as was traditionally the case.
Both consultations are open until 12 March 2026.
While change won’t happen overnight, these consultations mark another step toward fairer, clearer rules for freehold homeowners. Whether you are a homeowner or a developer this is your opportunity to shape the landscape.