Schedule 8: Remediation costs under qualifying leases Paragraph 11: No increase in service charge for other tenants Background
This is a new provision.
	The leaseholder protections in Schedule 8 protect leaseholders by limiting or preventing altogether costs relating to historical building safety defects being passed through the service charge.
	In a given building, different protections can apply to different leases. For example, some leaseholders may be protected from all costs, others may be subject a capped contribution, and others may not be eligible for the cost protections.
	When work is undertaken to the building, how much each leaseholder will ordinarily be liable to pay will be governed by the terms of the leases. In some buildings, costs might simply be evenly split among all leaseholders; other buildings may have more complicated arrangements for dividing the costs.
	Paragraph 11 ensures that, where leaseholders in a building have their liability removed or reduced, that these costs are not simply reallocated to other leaseholders. The paragraph makes clear that no leaseholder can be charged more than they would have been in the absence of the protections.
	The provisions in this paragraph mean that any amount that is not recoverable under a lease from a leaseholder as a result of Schedule 8 is reallocated to relevant landlords for the building (see paragraph 2 for the definition of "relevant landlord") and cannot be reallocated to other leaseholders in the building.
Example
A high-rise building in Greater London contains 20 units of which 15 are qualifying leases and five are non-qualifying leases. The 15 qualifying leases are all worth less than £325,000 and so are protected from all costs relating to historical building safety defects. £200,000 of remediation is required for the building and the terms of the leases provide that any costs are to be divided equally among leaseholders, equating to a contribution of £10,000 per lease. The 15 qualifying leaseholders are fully protected from costs and so cannot be required to pay anything by their freeholder. Paragraph 11 provides that the five non-qualifying leaseholders cannot be charged more than they would have been in the absence of the protections, meaning that they can each be asked to contribute no more than £10,000 by their freeholder. Accordingly, the remaining £150,000 of liability moves to the freeholder of the building.