Service Charges Update: Expected changes to the CLRA 2002 are further delayed
Release Date: 27 January 2010
The Government still has not introduced Regulations included in the Commonhold and Leasehold Reform Act 2002 which will place further accounting duties on landlords when collecting service charges from their tenants.
New legislation
The Service Charges (Information) (England) Regulations 2009 prescribe the information that a landlord must include in a service charge statement of account. This includes the manner and form of the report that must be provided, the periods each report should cover and the times by which it must be provided. The Regulations also describe the persons who are “qualified persons” for the purposes of preparing the report.
The Service Charges (Designated Account) (England) Regulations 2009 specify the conditions that must be satisfied before monies may be moved from one designated account to another, and the types of bank account in which service charge monies may be held. These Regulations do not apply to registered social landlords nor local authorities.
These Regulations were expected to be in force from 1 October 2009 but have been delayed.
Likely timescale for introduction
The Department of Communities and Local Government say the Regulations are still being worked on at the moment. The current plan is to bring them in on 6 April 2010, but this date remains provisional and they could be put back even further. The Regulations requiring regular statements of account still need to be debated in Parliament and this may well further delay their introduction.
There are two annual 'common commencement' dates for regulations that affect businesses, the 6 April and 1 October. This means that these Regulations can only be introduced on these dates (unless special dispensation is obtained). Therefore it could potentially be 1 October 2010 before these regulations become law, if they are not ready for introduction by 6 April 2010.
Bear in mind there are likely to be transitional provisions.
If you would like more information about these Regulations and the implications for your organisation please contact Emma Duke on 0121 214 3617 or emma.duke@anthonycollins.com.
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