New regulations governing service and administration charges on some homes are scheduled to come into force on October 1.
The move will have important implications for landlords and managing agents, says Birmingham solicitors Williamson & Soden.
Provisions contained in the Commonhold and Leasehold Reform Act 2002 will amend the Landlord and Tenant Act, making it necessary for any demand for service charges to be accompanied by a summary of the tenant's rights and obligations.
"Service charges are one of the most common reasons for disputes between landlords and their tenants and although tenants have a number of rights that are enshrined in law, they are not always aware of them," said property specialist Louisa Jakeman.
"This new legislation is designed to make service and administration changes more transparent and ensure tenants know their rights and how to use them."
A summary must be sent each time a demand for payment is made, which is typically between one and four times a year. It must be written in simple language and contain prescribed information on a tenant's rights and obligations.
It is common practice for landlords to contract the management of flats and collection of service charges to managing agents or management companies, especially for larger blocks, so Williamson & Soden is advising landlords and those acting on their behalf to keep accurate records.
Tenants are entitled to know what costs have been incurred and how these relate to the service charge and to ask for a breakdown of the administration charge.
Service and administration charges can be challenged through Leasehold Valuation Tribunals.
"Tenants of large blocks of flats often complain about the level of charges imposed by agents and the proliferation of administration fees levied by landlords, which they see as a licence to print money," added Mrs Jakeman.
"From October this year landlords and those who manage properties on their behalf will have to provide clear and accurate information on charges because if they do not, tenants will be within their rights to challenge demands and withhold payment."
