In response to the recommendations of the select committee on Leasehold Reform, which also took evidence concerning fleecehold, the Competition and Markets Authority (CMA) have finally caved and begun an investigation. Although entitled leasehold (as was the select committee) we need to submit evidence about the problems of exploitation and abuse we face over how estate charges are represented to us and then operated.
They should be interested in misrepresentation at the point of sale. So if you were told the estate charge was just for cutting some grass and later found there was much more to it, including liabilities for things like sub standard roads, broken pumping stations, contaminated land etc. this would be relevant.
If you have a rent charge were you sold the house as freehold? Were you advised there was a charge on the property which could be repossessed in the event of non payment?
Did you have any idea estate charges were unregulated and uncapped, and that you had no statutory route for redress??
Since your purchase has your charge risen dramatically? Does your management company/agent respond to requests for information to justify costs?
Do you have any choice of provider? The CMA really should be interested in the monopoly aspect.
All you need to do is to email one of the addresses given on this page with your story. There are full instructions on the page. The louder our voice the better, so please take action before 12th July!!!
We have published two stories from members, one on estate rent charges and another on fleecehold in retirement. As the estate charges scam becomes more well known, we have more press interest. Stories of what is happening to everyday people is what interests audiences most. We would love to publish an article or series of articles relating the woes of home owners on private managed estates. If you are willing to share, you can either comment on this article or email us via our contact form.
We are starting to hear about estate management agents/companies going out of business – do you have a story about this you can share??
This is a story submitted to us by a member who has a fleecehold bungalow in a retirement complex managed by a housing association. The leasehold system has been used and abused for many years to finance retirement housing schemes. It is felt by many that vulnerable older people are being exploited – indeed the Leasehold Knowledge Partnership started out as a pressure group for better retirement homes.
An Elder’s Story :-
Sanctuary Homeownership My husband and I moved to Maryvale Court in Lichfield in June 2010. Having purchased a freehold bungalow we were advised to sign a covenant which we understood was to protect us should any problems arise as a consequence of an unadopted road to gain access to our property. It was explained that we would be required to pay a monthly maintenance fee to Sanctuary which would be placed into a sinking fund to be used for repairs only and not replacement. The sinking fund has a total contribution of approximately £15,000 per annum. Whilst residents fully appreciate the fact that management fees must be paid it is generally felt that they are somewhat excessive. Indeed, fees were increased by some 8% whilst State Pension increased by just 3%. The age of residents varies between age 70 and 97 and many of whom are in poorer health, suffer mobility problems and are on a limited income and don’t feel that they are able to tackle the issues with the mismanagement of our complex. During the course of the last 5 years, the management of the site has deteriorated considerably. Jobs which should have been done have taken many, many months and, in some cases, years at a cost higher than expected. Contractors are taken from a very short list of Sanctuary approved Contractors who reside many miles away and we simply don’t have a fair choice. The last two issues have become a huge stumbling block. We have a beautiful pool area which has not been properly maintained at all during the last 5 years. However, there are benches and previously there were some gently sloping steps enabling residents to walk around the pool area and sit in a communal area. This has now been ruined as a result of steep concrete steps being built – without consultation – together with an ugly stainless steel rail being erected at an horrific cost of some £6,000. Residents are unhappy about the way in which Sanctuary has redesigned the pool area and despite many requests since August 2018 we are still awaiting a report from the Health & Safety Officer in particular with regard to the steps which are not easily negotiable by residents. Indeed, I personally tripped on the now raised steps and had to have my toes strapped up for 2 weeks. Despite reporting this to Sanctuary it has been ignored. As a result of some workmen jet washing the roof of a property owned by Sanctuary but situate within the Maryvale Court complex, repairs are now required to the roof which will be carried out on 1st April 2019 at a cost of some £31,000 which will be paid for from our sinking fund. The majority of residents have issued a formal complaint regarding this but Sanctuary fail to answer any letters or emails adequately and continue to treat all residents as if they were tenants and not freeholders. We are required by Sanctuary to pay for a policy under our maintenance contract with them but this continues to refer to leaseholders and not freeholders and they refuse to make any changes or additions to ensure that it covers us as freeholders. There are trees onsite which are over 100 years old and subject to a preservation order but they are extraordinarily tall for such a residential complex and we have, on a number of occasions, requested that they be made safe because over the years 3 of the bungalows onsite have been damaged but Sanctuary choose to ignore this fact and the trees continue to grow. It would appear to residents of Maryvale Court that Sanctuary treats each and every single resident as a tenant and not a homeowner and can and will do exactly what they like. Sadly, I lost my husband in 2017 and some of the original residents have now passed. One resident has moved because they simply couldn’t cope with the stress, mismanagement and blatant disregard to residents and even this was hampered by long and protracted battle with Sanctuary. Having found your website, I have contacted my local MP together with the Minister for Housing and Homelessness and can only hope that with continued lobbying we can fight for a fairer deal for all who have to pay maintenance companies inordinate sums of money for very little in return.
It is clear from this that fleecehold is being used in retirement complexes, and all the issues of lack of accountability and transparency found on new build estates are the same. At least fleecehold is not discriminatory, exploitation is applied even handedly to all ages!
We love this term! Used by the BBC in its reports today online and on several local radio stations. Finally someone is picking up that estate charges as they are being applied across the UK today are the next scandal waiting to break in the housing sector.
The report of the governments select committee enquiry into Leasehold Reform is now published. It is clear that this group of cross party MPs has not had the wool pulled over its eyes by developers, investors and property managers. It has come out very strongly in favour of actions which would help to correct the power imbalance towards ordinary home buyers in the leasehold sector. These include making it easier to buy the freehold, scrapping ground rents, regulating service charges, making common hold the default tenure for any properties with shared space/buildings.
Although the enquiry title refers to leasehold, its remit did include estate charges, and our own written evidence was accepted by them.
On estate charges, they are recommending full leasehold style rights for home owners and also the possibility of common hold for estates in future.
We welcome their acknowledgement that there is a problem over estate charges, but feel these measures do not go far enough, especially in relation to the construction of sub standard estates when there is no intention for them to be adopted.
The report recommends an investigation into mis-selling leasehold houses with involvement of the Competition and Markets Authority. We think this equally applies to estate charges and we intend to develop and announce shortly a strategy for reporting to the CMA.
This Sunday Times Article from 24th February 2019 exposes just how expensive the private managed estate model is, no matter who collects the “tax”. A large “new town” development in Devon with a high proportion of affordable housing caused such concern for the local town council about non-payment (or non affordability?) of the estate fees that it took over the rent charge and manages it via a very large precept on the council tax – around £370 per year!
Although this scenario is unusual in our experience as most new build developments have either a private company or a housing association managing them, we do feel it highlights the need for developments to be constructed to adoption standards and adopted by the council in the very beginning. This avoids sub standard construction which is expensive to keep up, gives the council an advance from the developers for the first 10-20 years maintenance and gets rid of a huge volume of unnecessary legal expenses and delays due to the involvement of a management company with every single home when it is bought, sold or remortgaged.
Produced in response mainly to the Housing Minister, Kit Malthouse, following his contribution to the Westminster Hall Debate on 22nd January 2019. We are getting similar messages in reply to our own representations from the Department for Housing, Communities and Local Government. These defend the status quo on voluntary adoption and local 106 agreements passing the buck back to Local Authorities and disregarding the role of their own National Planning Policy Framework. There is also a reluctance to rise to the challenge of creating legislation to cover estate charges, although we do note that recently there has been a slight shift towards talking about a legal framework rather than simply access to the First Tier Property Tribunal. We have reports of two cases where the FtT has been unable to hear freehold estate charge cases due to the lack of legislation.
Helen Goodman MP has organised a Westminster Hall debate on estate charges. It is on Tuesday 22nd January at 4.30pm. It is not too late to email your MP to ask if they could support this initiative to put pressure on the housing minister to act and address the problems we are facing.
We are all grateful to Helen Goodman for continuing to push for change and hope that other MPs with constituents suffering from unregulated estate charges will support her.
The second reading of her 10 minute rule bill is also due this week, on Friday 25th!
Our FaceBook group has nearly doubled in size from 2300 to 4300.
We have 400 estates reported by members on our database.
All members have been working hard to successfully raise awareness of how estate charges impact on home buyers and on the estates themselves, culminating in Helen Goodman MP presenting a 10 minute rule bill on the subject with broad cross party support. This would not have been possible without HorNet members efforts in writing to their MPs, taking part in media articles and reporting the extent of their problems to us.
Congratulations and thank you! We look forward to a 2019 where we grow in strength and voice to further influence government policy to change the law and abolish the private estate model for residential developments.