ARMA has made us aware that protection of lessees' service charge funds under the Financial Services Compensation Scheme (FSCS) has received a boost with the publication of new guidance on their rights. It has been confirmed that where such funds are held in one bank account, the £50,000 limit relates to each leaseholder's share of the fund - previously it was thought that the limit was £50,000 in total.

"We very much welcome this new guidance, something we have been seeking for over six months", comments David Hewett, Chief Executive of the Association of Residential Managing Agents (ARMA). "The £50,000 total limit meant many tens of thousands of lessees had part of the service charge contributions exposed to a bank failure. Now with the individual limit of £50,000 per contributor it is likely that every one of the 2 million leaseholders in England and Wales are fully covered".

Published by Communities and Local Government, the guidance is titled FSCS - Treatment of Service Charges for Residential Property and can be downloaded from:
www.communities.gov.uk/publications/housing/residentialservicecharges

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