Thank You HorNets!

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The CMA (Competition and Markets Authority) have recently published the responses to their market study statement of scope at https://www.gov.uk/cma-cases/housebuilding-market-study

This is not the study report, which is expected in September 2023, but responses from the industry which make an interesting read, from us and from consumers which we believe are mostly HorNet supporters. It is unusual for a government body to receive over 250 consumer responses so a huge thank you to those who took the trouble to write in during the fairly short time given for responses.

We hope they listen and look forward to their report in the Autumn.


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Say Your Piece Update

The CMA team looking into the housebuilding market have advised us that they welcome evidence from home buyers past present and future describing their specific stories. Please write in ASAP to have your evidence considered. The investigation is in to the way this market works and not focused on any particular company.

Email to housebuilding@cma.gov.uk

We Suggest the Subject Line of: Evidence on Estate Charges

Attach relevant documents – small files if possible.

Remember someone has to read it and analyse the content so try to be concise.

You need to put in some basic details, your name and address, the name of the developer, management company and managing agent. When you bought into this, and how long you have been charged. Fake freehold or leasehold??

Tell them your story. You don’t need to use all of this – just what applies to your situation or is important to you.

Start with what you were told in the sales office.

Was your property described as freehold?

What were you told about the estate charge? Was it described as a service charge, or what?

Was it glossed over/minimised?

What did you know about it at the time of reservation?

Did you reserve your plot based on a sketchy (or no) description of the estate charge like “a small charge to cut the grass”?

Were you persuaded to use the builders recommended solicitor? If so how did they convince you?

Were you put under pressure (positive or negative) to exchange contracts quickly?

What did your solicitor/conveyancer tell you about the charges?

Did you know the full extent of the liability you were signing up to, or did you think it was just grass cutting?

If you have a rent charge, were you told this is a charge on the property, and that it could be repossessed if you defaulted on payment for any reason?

Were you given a detailed breakdown of what you would be paying for?

Did you know part or all of the estate was not going to be adopted by the council/water company?

Did you realise that you would be paying for the upkeep of public open space?

Did you understand that the management company/agent was not going to be accountable to you?

Did you realise the charges are uncapped and the figure you may have been given in the sales office was only a projection/estimate?

Did you know that you had no statutory rights like there are for leasehold service charges?

Do you have the option to take over the company when the estate is completed?

If not, do you have any choice in managing agent/contractor provision?

Have you had any difficulties gaining full control of your RMC?

Next would be how the estate is being managed and what problems you have had.

Do you get value for money?

Can you choose your managing agent?

Do they respond to complaints/queries?

Have you tried to make them accountable by with holding payment or suing them in small claims?

What did you do, and was it successful?

How did they respond?

Legal Framework/Option to self- manage

If you know what your set up is, can you describe it briefly – rent charge/chain of covenants/agreements with council under section 106 or section 38 (roads adoption)

Who owns the land? Who owns the rent charge?

If you have an option for self-management how is this working for you?

Are you a leaseholder or “fake freeholder”?

Then you could go on to describe how and when you found out the true picture and how this has affected you.

Has it affected the sale/value of your property? If so please describe.

Have there been any major unforeseen rises in estate charges since you bought your home? Please describe.

What have you suffered?

Financial loss? Can you quantify?

Health/relationship problems?

What would put it right for you?

Mandatory adoption?

Common hold ownership of estates?

Regulation of the current system??

Other??

You can download this article in Word to use as a template if you wish:


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CMA to Investigate Estate Charges

Great News

Wonderful news for all HorNet supporters and other estate dwellers who have worked so hard to inform the CMA (Competition and Markets Authority) of the problems associated with privately managed estates. You know who you are – thank you so much!!

The CMA have announced a wide ranging enquiry into new homes provision, land banking and planning. Included will be “unfair”estate charges – at long last! We look forward to this enquiry and will be offering evidence of detriment to consumers over mi-selling and anti-competitive management arrangements, as well as the longer term quality issues.

Why does a CMA enquiry matter?

If they confirm a problem in the market they have powers to enforce rectification and their findings often lead to a change in the law. They have just completed their investigation into doubling ground rents in new leasehold homes, and succeeded in getting these banned going forward, and the big developers to change the ground rent terms for existing properties. We know they will find problems with consumer and competition laws in the privately managed estate market and trust they will also take action in due course. We still need to be patient as it will take time, but the news they are investigation is still fantastic!

Read the press release from the CMA here


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Self Management Struggles

It’s not easy for residents to take over the management of their estate maintenance, even when the company set up allows it. As this example shows, you need determination and a willingness to dig into the specific set up for your development. The pay off is greater control of costs, better quality work and value for money. However self management does not remove the liability for maintenance of what is often sub standard infrastructure. Many other estates, although not this one it seems, include public open spaces.

Hornet’s goal is for these areas to be adopted, but many residents on existing privately managed estates want to self manage to get better value for money. They can then choose to run things themselves or on larger estates appoint their own managing agent, answerable to them. In this instance the residents chose to run things themselves. We thank you for sharing your experiences, which we hope will help others who wish to self manage…..


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Size Matters!

Congratulations HorNets! We have reached over 10,000 supporters in our FaceBook group.

This not only shows how many people support our campaign to abolish privately managed estates in favour of adoption by councils, but gives an indicator of the size of the problem nationally.

If we want a change in the law, we need to demonstrate a large number of people are disadvantaged by the current system.

The bottom line is that estate dwellers regardless of tenure end up footing the bill for maintaining cheaply constructed estate infrastructure, sub standard for adoption. Developers maximise profit at the consumers expense.

Who knows the size of this rapidly growing problem? Neither the government nor the local authorities are counting, so we are in our own small way and now have a good representative sample of C800 estates.

The government do count completed dwellings and from their statistics we find that between the start of 2001 and the end of 2021, 3009750 dwelling were completed – yes that’s over 3M! If we accept that private estates were not universal near the beginning of that time span and not all dwellings are on estates we could round it down to 3 million. Three million disadvantaged!

From our own data we have 677 estates with clear information on estate charges per home per annum and the average is £273. We began collecting this data over 5 years ago, so this is almost certainly below the current figure.

However we could use it to get a feel for the size of the “industry”. 3 x 273 = 819. We calculate that managing agents are collecting £819 million per year in estate charges. Little wonder there is resistance to change.

Let’s make 2023 the year we work together using this data to create change!


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