View more on these topics

MP launches bill to ban “fleecehold” charges on private estates

Helen Goodman, Labour MP for Bishop Auckland, has launched a private members bill in the House of Commons which aims to ban so-called “fleecehold” charges on private estates.

The Freehold Properties (Management Charges and Shared Facilities) Bill examines fees payable by owners of freehold homes on new build estates where communal land is not adopted by the council.

Instead roads, lighting and communal spaces are retained by the developer which either charges residents directly for maintenance, or sells on the contract to a property management company who collect the fees.

If bills remain unpaid, developers or their agents can use section 121 of the 1925 Property Act to place charges on the property, send bailiffs and threaten repossession.

Goodman told MPs there are several issues with this arrangement which affects an estimated 1.3m households.

She said: “The first issue is that the public spaces are not made up to a proper standard. After eight years one man I met is still living on an unmade road. Promises of green areas, woodland, play facilities and even street lighting are broken.

“Secondly, the fees are high, rising, uncapped and unregulated. One constituent told me their fee had risen from £60 to £134 in four years – at this rate it will be £3,313 in 16 years’ time. Another constituent faced a 50 per cent rise in one year.”

According to Goodman’s research, there is a lack of transparency about the way the fees are made up. There is no cap on fees and management companies are under no obligation to account to homeowners for work carried out or costs incurred.

Although estate fees are often included as covenants in the transfer deeds on freehold properties, many homeowners don’t know they exist until a bill arrives. Many homeowners were advised by solicitors recommended by housebuilders when buying their homes, and they routinely claim that the consequences of not paying estate fees were not adequately explained.

Another problem is that when challenged over the fees or upkeep by residents, the management companies adopt an aggressive stance, often with threats of high court action or bailiffs.

The Freehold Properties (Management Charges and Shared Facilities) Bill calls for developers to be obligated to ensure shared facilities are maintained to an adequate standard. To help existing homeowners, the bill will cap and regulate estate maintenance fees. It will also make provision for the transfer to genuine self-management to end the “stranglehold” of managing agents.

Recommended

New government Housing Court proposals released

The government has today launched new proposals and a call for evidence that seeks views on the possibility of providing a single path of redress for both landlords and tenants who have a property dispute through a ‘Housing Court’. Currently, disputes are heard in a mixture of chambers and courts via multiple hearings, a situation […]

Government to “clamp down” on leasehold mis-selling

Secretary of state for housing, communities and local government James Brokenshire has written to the Competition and Markets Authority and the Solicitors Regulation Authority in an effort to tackle issues with the leasehold market. Official figures point to approximately 100,000 tenants trapped in “exploitative and unfair” leasehold arrangements, with home owners suffering a ‘Double Clause’ […]

Numbers-700x450.jpg

Government releases leasehold numbers

The ministry of housing, communities and local government has issued statistics on the number of leasehold dwellings in England across 2016 to 2017. The ‘experimental official statistics,’ meaning that government is still undergoing an evaluation of the methodology and quality of output, show that the number is unchanged from 2015 to 2016. The report states […]

House-Home-Property-Ladder-Mortgage-700x450.jpg

High Court shuts down £20m property scam

The High Court has shut down a property investment company for defrauding close to £20m of investors’ money. Essex and London Properties was incorporated on 15 April 2005, with a registered office in Sidcup, Kent. It claimed to purchase properties with the intention of selling them on at a profit or getting rental income for […]

Newsletter

News and expert analysis straight to your inbox

Sign up