Improvements in the rights of residential long leaseholders are made by the Housing Act 1996, which received Royal Assent on 24 July.
Freeholders can no longer be be heavy-handed when lessees dispute a service charge. Since 24 September a freeholder cannot forfeit for non-payment of a service charge unless the charge is agreed by the lessee or settled by an application to the county court or to a Leasehold Valuation Tribunal.
Tribunals will have jurisdiction to deal with disputed service charges (with effect from April 1997, so in the meantime service charge disputes remain within the jurisdiction of the county court). This should make it easier for a well advised group of lessees to dispute service charges if they think they are unreasonable. Tribunal procedures are simpler than those at county court and a tribunal cannot make an order requiring the unsuccessful party to pay the other party's cost. Leaseholders will also be able to apply for a manager to be appointed to manage the block on a wider basis, including cases where freeholders have made unreasonably high service charges. The power to order appointment of a manager – currently vested in the county court – will also transfer to the tribunal, probably from April l997.
Leaseholder groups also have a new right to appoint a surveyor to advise on service charges and a surveyor has statutory rights to inspect freeholders' accounts and to survey the building. This procedure, which starts on 1 October, may prove popular with lessees: it is simpler and cheaper than the more complicated right to a management audit under the Leasehold Reform, Housing Urban Development Act 1993.
Important as these changes are for lessees and freeholders, there must be a concern that only a well-advised and resourced group of lessees could exercise these rights. While the 1996 act may have improved the legal position of long leaseholders it is making an already complicated area of law more difficult to interpret. This is taking place, ironically, when the Woolf Report has called for an overhaul of residential landlord-tenant law.