Leasehold: NRLA backs cash reserve plan

Plans that will make it compulsory for leaseholders to pay into a reserve fund to cover expensive repair bills have been backed by the NRLA.

In our response to the Government’s latest consultation on leasehold reform we said building a cash pot in this way will prevent leasehold property owners being hit with sudden, expensive bills that they can’t afford.

Linked to this, we agree that Asset Management Plans (AMPs) will be critical in setting out how these funds are used when it comes to planning, scheduling, and financing works, although, we do want the Government to revisit existing rules which, as they stand allow freeholders to keep the money once the last contributing leaseholder’s lease ends. 

We have also called for safeguards to ensure fairness and clarity, including guidance on who can certify AMPs, transparent reporting requirements, and clear standards for cost estimation. 

Clearer rules on service charges

Unlike commercial property, where reporting frameworks for service charges are well established, residential leaseholders currently face a lack of clarity and consistency.

To address this, the Government has proposed the introduction of a prescribed, standardised form of accounting for residential service charges, which would: 

• Provide leaseholders with meaningful, comparable information. 

• Reduce ambiguity and build trust in the system. 

• Enable enforcement by creating clear expectations around transparency. 

We welcome these plans, but have recommended the Government takes it further by introducing a defined set of categories – including the description of works, costs, and method of apportionment – to ensure charges are presented consistently and comprehensibly. 

Conflict of interest 

While we agree that managing agents should be required to declare conflicts of interest with insurance brokers and insurers, we have emphasised that this obligation should also extend to other relevant parties, including surveyors and loss adjusters. To ensure transparency, leaseholders should be provided with: 

• A full copy of the insurance policy and policy schedule. 

• Direct contact details for the insurer’s claims department. 

Valuable opportunity 

The Government’s consultation on leasehold reform is a valuable opportunity to deliver fairer outcomes for leaseholders while ensuring the system remains workable for landlords, freeholders, and managing agents.  

By ensuring reforms are proportionate, evidence-based, and supported by mandatory agent qualifications, the Government can raise standards and build a more transparent, trusted system for all.