Relentless Charges during Pandemic

There have been many initiatives by government and banks to cushion the economic effects of the Covid 19 epidemic, with mortgage holidays amongst them. However, in the property management sector it seems that with or without a reduction in services, property managers both in the Leasehold and Estate Management sector (very often the same companies) continue to charge the same fees. We have reports from the National Leasehold Campaign that leaseholders are struggling with unreduced charges.

A quick poll on our Facebook group showed out of the 89 respondents, 48 reported no change in service or fees, and 41 reduced service but no reduction in fees. No one reported a reduction in fees. Where there has been a reduction in services, but no corresponding reduction in fees, we recommend people to report the practice to the Competition and Markets Authority here https://www.coronavirus-business-complaint.service.gov.uk/?fbclid=IwAR3pwK5TduX1ZOi1_qxma9C01B-CSiaZXi_jeoy3e5SKftGziYvwcsW3WMU

The human cost is portrayed in this heartbreaking story recently aired on the BBC:

The comments are made by Paula Higgins of the Home Owners Alliance.

We note the management company quotes the contract signed by the purchaser – how often have we heard that? It is worth remembering that the initial contracts are drawn up by (or for) the original house builder.


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CMA Update on Leasehold Mis-selling

The CMA (Competition and Markets Authority) have issued an interim update report on leasehold houses mis-selling. The findings totally vindicate the work of the National Leasehold Campaign and Leasehold Knowledge Partnership in publicising the selling practices and onerous leases being almost universally promoted by the big plc housebuilders in recent years. The report identifies the major areas it will work on and plans to call for more evidence.

In paragraph 14 there is specific reference to “fleecehold” :

The Secretary of State for Housing, Communities and Local Government, a number of MPs, and members of the public have expressed concerns about freehold mis-selling – so called ‘fleecehold’. This is a separate issue from those presently under investigation as our current focus is on issues
in leasehold home ownership. As the CMA’s Chairman, Lord Tyrie, has said, the CMA will in due course consider whether to investigate freehold mis-selling, assessing the matter against its prioritisation principles.
However we wish to complete our work in leasehold first and anticipate that doing so will assist us should we open a case on freehold mis-selling

What we would like is for them to also understand that estate charges are based on unfair contracts both for leasehold and fleecehold – it is not just a matter of mis-selling although this has happened with fleecehold too. The private estate market is rife with anti-competitive practices including embedded management companies, and sale of rent charges and/or land to private companies without any resident input, accountability or choice.


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