We have an amazing opportunity to say what we think, and as “consumers” of estate charges we are the experts. Please spend some time completing the governments questionnaire, every single answer counts!
Far be it from us to put words into your mouths, in fact the opposite is true, you have given us the evidence for our campaign message and put words in ours!
Just to make it a bit easier, here are some thoughts you might want to consider before you answer:
Question 22 and 23 relate to estate charges on freehold (fleecehold homes), if you are a leaseholder, please answer as many questions as you can. It is not necessary to answer questions which don’t apply to you.
The government have totally failed to recognise that estate charges are onerous terms for leaseholders on private estates as well. Their focus on freehold home owners is too narrow, and whilst regulation might improve standards of service and value for money in some cases, it is not the answer, and would only prop up a system created by developers to deliver sub standard estates on the cheap and then have their mates run them at the expense of the home owners.
Information from HorNet has helped Bishop Auckland MP, Helen Goodman, draft her Ten Minute Rule Bill which was laid before parliament on November 14th 2018. In her speech she covered the major aspects of the estate charges scam most eloquently. You can hear it here in full or shortened version.
HorNet co-ordinators were invited to Westminster to hear the bill being presented and meet with the many cross party MPs who supported it.
At present the government is looking at giving leaseholder type rights over estate charges, including redress via the First-tier Tribunal and Right to Manage giving choice of service provider.
However, this approach totally ignores the “21st century blight” referred to in the bill. Developers are using this model to construct estates of low quality and save themselves hods of cash. The long term liability for this falls on the estate dwellers via costly repairs of defects down the line. Hanging on to the land also gives developers the opportunity to further monetise it in future should planning conditions change and allow for extra houses to be built.
On many larger estates, there are areas of open space which benefit the general public, it is fundamentally unfair that a small section of the community should pay for the upkeep of these spaces.
Regulation and redress are simply not enough. We know from our friends who are leaseholders that it doesn’t work for them, so why should it work for us?
You have to ask yourself why estate residents should have to spend a great deal of time and effort forming and running a Right to Manage association to maintain land belonging to a private company, which may also be used and abused by the wider community who make no contribution.
In its recent report to the government, the Law Commission put forward the idea of enfranchisement for estates. This would mean that estate residents would be able to purchase the freehold of the estate, much as flat owners can do for their block, then owning the shared areas in common. The residents would manage the estate through their own appointed agent directly accountable to them. This would be a definite improvement on the current situation, but still does not address the defects in construction which may be taken on or the unfairness of an estate providing a public amenity.
We believe that the only solution which addresses all of the issues for home owners and the future quality of the estates is compulsory adoption, and will continue to lobby for this.
On November 14th Helen Goodman MP (Bishop Auckland) will table a 10 minute rule bill in parliament calling for:
Measures to regulate the fees charged to homeowners by management companies
Measures to ensure shared facilities are of an adequate standard
Provision for the self-management of communal areas by residents, should they wish.
This is a major step forward in raising awareness of the issue in parliament, and we hope more generally as well.
It is not expected that a ten minute rule bill will be enacted, but it can do much to lay the foundation for government action, as Justin Madders successfully did with his bill around doubling ground rent leasehold issues.
The more support the bill has from MPs the more likely further action will arise. We urge all HorNets to email/write to their MP asking them to support the bill. Helen Goodman has provided a letter template, which you can use or customise if you wish.
HorNet are not too concerned that the title of the bill refers to freehold homes, we expect that any future legislation will cover estate charges for all tenures, and in all circumstances, not just new build estates. We will continue to promote the message that estate charges on peoples homes are the problem and fight for their abolition.
It is true to say that when we first began, we knew what we did not want. Gradually it has become much clearer what we do want:
What we want for all new build estates:
Those with public open space to be constructed to adoption standards, inspected and adopted by the Local Authority compulsorily.
Those smaller developments which have no public open space to be constructed to adoption standards, independently inspected, and conveyed to the residents under common hold with a proper regulatory framework.
A ban on estate residents having to fund the maintenance of adjacent existing green space in perpetuity as part of planning agreements. If developers wish to “donate” these services instead of providing green open space on their site, then they should pay the local authority a commuted sum for maintenance.
Abolition of estate rent charges for residential property – retained for commercial property if necessary.
What to do about Existing Sub- standard estates?
Whilst we DO want to drive up estate quality and give future home owners a fair deal with true freehold, we DO NOT want a whole (very large) group of residents on existing estates being left on run down, expensively maintained estates with devalued properties. Whatever is done, must address the plight of current estate residents who are caught unwittingly in this trap.
The Law Commission is recommending Government look at enfranchisement (that is residents having the right to purchase the freehold of the estate and run it themselves), and whilst this sounds better than the existing arrangements, there are serious snags. The sub-standard construction leading to “un-remedied liabilities” being the biggest obstacle. We would also argue that most people want to enjoy their homes in peace and not have further, possibly onerous, responsibilities placed upon them and the risk of falling out over costs.
So we say it could be a two stage process. Enact enfranchisement, with peppercorn cost for the land and indemnities against defects. Require Local Authorities to adopt these estates at no cost to residents if they as the new land owner ask for the estate to be adopted. Local Authorities can adopt sub-standard now, but are unlikely to do so unless compelled. If this seems unfair on Local Authorities, then do remember that they agreed to the current arrangements with the developers.
When we first started networking together 2 1/2 years ago, we knew what we didn’t want. That is to be unfairly exploited by being forced to pay inflated estate charges to either predatory private companies or inept housing associations. The deeper we dug, the more horrifying the story for ordinary home owners, who were nearly all totally uninformed of what they were buying in to. Continue reading “Adoption Now!”
The future for many home owners on privately owned estates will find them under the hidden burden of what the government call “un-remedied liabilities”.
Developers are not offering estate land and amenities up for adoption, so are free to construct sub standard roads, paths, sewers and landscaping. This saves them a great deal of money. Although there may be agreements about standards via local authority planning departments, the developers know cash strapped councils will not enforce them. We end up with estates constructed to a much lower standard than if they were going to be adopted.
After the builders move off, the land is handed over to their choice of managing agent. Are these agents taking steps to ensure the estate is constructed to a good standard, asking for guarantees or indemnity insurance? We do not believe they are. Why should they, they want more future custom from the developers and they will not be footing the bill for remedial work, the home owners will.
We are already hearing of examples of estates where there have been additional large expenses for remedial work due to poor quality construction.
We believe that more questions should be asked about the handover process. There is a huge conflict of interest and lack of independent scrutiny. It is often the case that the managing agent is chosen by the developer before the first home is built – a rather cosy relationship set up before a Residents Management Company (if there is one) could have any say in the matter.
In the long run, this issue could well turn out to be the most important defect in the private estate model.
Last month we wrote to the Housing Minister on behalf of over 3,500 members pointing out the problems and defects in the private estate model, both for home owners and for the quality of the estates themselves. You can re-read what we wrote here.
Over a month later we received a response from his department which outrageously ignores the main points: a) The fundamental unfairness of a small group of home owners subsidising newly created public open space. b) It suggests Local Authorities are virtually autonomous and not constrained by government policy or funding. Of course they would say that when they have had to respond to the recent petition calling for compulsory adoption. c) There is a total unwillingness even to consider alternative ways of funding estate maintenance. The response is written as if replying to a disgruntled individual, not a large and active campaign group – a bit of wishful thinking on their part? We do not intend to go away, or shut up!
Read to the end and let us know if YOU are reassured that the government intends to look after your interests!
HorNets have not had their feet up in the sun over the summer holidays. We have been busy arguing our case.
Perhaps the most important piece of work has been our letter to James Brokenshire, Housing Minister, in response to his speech on housing at the Policy Exchange in July. You can read the full speech here.
We have taken him to task over his statements concerning quality vs quantity in new house building and the social injustice of our position. The letter is quite long, but we believe that it is the essence of our position on new build managed estates. Click on the image below to read the letter:
We plan to share the contents of this letter to key decision makers, and HorNets may wish to use some or all of it when lobbying their MPs.
The “elephant in the closet” is the poor preparation of estate infrastructure – it is absolutely vital that estate home owners do not have to pick up the tab for this in the future.