Tell Government NOW!

Now is the time for all HorNets to tell the government what they think about estate management charges. Their survey which is about regulating property management agents and is open to you to complete until the end of November. This is what one member wrote. The specific evidence from their estate is omitted for identity protection.

Regulating Letting and Managing Agents – response to Call
for Evidence

Thank you for the opportunity to contribute to this consultation.
I speak from the position of a private homeowner on a new estate of some X homes.
The public open spaces on our estate are owned and managed by ‘Y_MgAgt’.
At the end of this document I give the background to my views, as a further example for you
and to explain the basis for my responses to the consultation.
Comments on the Consultation Paper.
The paper is mostly directed at leasehold and rented properties so the questions are mostly
related to these sectors, where there are already some controls.
There are only 3 references to private homeowners paying maintenance charges, which
suggests that the similarity of our predicament has only been understood recently.
It is very important that the future controls for leaseholders should also apply to freeholders
and that provision should be made for the difference as well as similarities in the nature of
our situation.
Although charges are, in many places, fairly low, there is scope for them to increase
exponentially in the same way as the recent leaseholds. This can cause a blight on sales of
our homes.
‘Y_MgAgt’, the company which manages our Public Open Spaces, boasts that it now
manages over 000 developments, with currently 00,000 homes and another 00,000 planned.
There will be other management companies in addition to this.
This is huge.

The problems associated with this system for managing public open spaces are as follows:

  • It is inequitable and iniquitous that people buying recently built homes should have to pay to manage Public Open Spaces, used by people not from the estate.

  • The Local Council still charges the same Council Tax to homeowners on these estates. In the past they would have adopted these spaces and the charge would, effectively, have been limited by Council Tax rise controls.

  • There is no Council Tax discount given to us, given that we are paying for what would previously have been Local Council responsibility. So we are paying for the same service twice.

  • There is no control over which company should be undertaking the maintenance.

  • There is no competition.

  • There is no control over how well they do the work or how efficient they are.

‘Admin’ and ‘Supervisory’ charges far outweigh the costs of the actual maintenance.

  • There is practically no control over what they charge. There are theoretically controls stated in the Deeds but ‘Y_MgAgt’ ignores these controls and charges what they like for whatever they like.

Charges increase at well over the rate of inflation.

  • This situation can cause a blight on sales of homes.

  • The charges are currently low enough that it is not practical to undertake law suits.

  • Neither is it reasonable to expect people who have bought houses individually to have the sense of community to ‘club together’ to take these matters to court/Tribunal, unless a common management structure is built into the organisation of an estate. This is possible with a block of flats but far more difficult with a large number of individual properties across many roads. That is why we have elected local Councils.

Proposals

So, we believe that the following should be undertaken:

  1. This form of management of Public Open Spaces should be discontinued/outlawed for all new estates/housing proposed or in the pipeline. Control of management of Public Open Spaces should be limited to the Local Council.

  1. Where possible, existing estates organised in this way should be transferred to the Local Council.

  1. Where the matter of ownership of the land is a problem, then:

  • The builders should be required to purchase back the land and transfer it to the Council and/or

  • Private houses in this position should receive a rebate on their Council Tax to compensate for the extra charges.

  • The Council would then have an interest in negotiating the annual increase in charges and have much more power to do so than individual homeowners.

  • The Council should be given the power to change management company, thus increasing competition and rendering the management company more like a system of management outsourced by the Council.

  • The Council should be given the power to control charges and quality of maintenance.

  1. If Council involvement is not possible, then a free national ombudsman/management system should be set up to oversee charges and quality of maintenance. This should enable homeowners to submit arguments and have those arguments taken into account, as well as those of the managing company. This would, however, be a last resort.

  • The basic presumption should be that prices should rise in line with CPI only. Any increase above that should be negotiated with the National Body.

  • There should be no right to charge for ‘extras’, as ‘Y_MgAgt’ currently do, despite the fact that there is no provision in the Deeds for them to do so.

  • The National Body should have the power to fine management companies which depart from their rulings.

  • The National Body should have the right to offer management of specific estates out to competition if the charging or performance of the incumbent is deemed inadequate.

  • This would not be an impossibly large task if the system were stopped for any new estates in the future.

Conclusion

It is vitally important that this undemocratic and scandalous way of managing and paying for Public Open Spaces be stopped for the future. Any existing arrangements should either be regularised or made more equitable, controlled and no longer exploitative.

The proposals above are ways in which we think this might be achieved and we hope you will take them into account.

We need to shout as loud as we can, so please do the survey. If your response is a long one, we suggest writing it out first and then copy and paste so you don’t get timed out.

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2 thoughts on “Tell Government NOW!”

  1. RMC’s (Residents Management Companies) are the absolute best solution for Developers to dump big problems. Their is no competition and the developer ties you up in Covenants that completely exonerate the developer from any future liability. We have had a string of directors that eventually give up. Most properties are rented out with absent landlords. Bromford housing association prevented us from changing agent. Flats, Houses and Private Road and Sewerage Pump dumped into the same legal RMC entity with occasionally blurring of lines between the various chargeable schedules in which I have caught out the agent peverel, now first port. Its a Terrible system, absolutely Terrible. Thank You very much Lovell Partnerships Ltd(Developer).

  2. WE live in a three year old development of 28 dwellings in Hertfordshire.
    The management of the common areas of the estate has been passed by the developer to an estate management company and the residents are required by their sales contract to pay an annual service charge to that company.

    Our problems with this are
    1. although paying for the service of which a third goes in management fees we have no control over the appointment or termination of the management company and there is no process for us to have such powers.

    2. The developer has no interest in moving the estate roads etc to adoption by the local authority and has stated it is not their intention to have the sewers adopted. However, the residents are paying the full council tax and water/sewage charges.
    3. This means that for perpetuity unless there is a change in the law the residents are at the mercy of the developer and/or the estate management company who may also purchase the land concerned with no rights of representation.

    .

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