Rochdale MP backs private members bill calling for end to 'unregulated' estate fees

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Rochdale MP Tony Lloyd has backed a Parliamentary private members bill to tackle unfair maintenance fees on new build developments.

The 10-minute rule bill was tabled by Bishop Auckland MP Helen Goodman on 14 November, calling for the Freehold Properties (Management Charges and Shared Facilities) Bill to put an end to the estate maintenance fees.

Estate fees, also known as service charges, management charges, rent charges, or maintenance fees, are included in small print of transfer deeds on many freehold properties.

They are now a common feature of many private housing developments, although many residents are unaware of their existence.

Communal green spaces on site, such as grass verges or planted areas, are retained by the developer, not the local authority. Property companies then either charge residents directly, or sell the contract to a property management company who collect the fees, which are uncapped and unregulated, often rising by hundreds of pounds.

The Bill includes measures to regulate the fees charged to residents, ensure shared facilities are of an adequate standard, and make provision for the self-management of communal areas by residents – if they wish to take this route.

Ms Goodman said: “Much like the spiralling Grounds Rents scam which affected leaseholders, estate charges on freehold properties are being used as the latest cash cow by unscrupulous property companies.

“While estates do need to be maintained, the fees demanded of homeowners are completely disproportionate to the services provided – if indeed they are provided at all. Fees vary according to the location, developer, and management company, but are usually in the region of £100-£220 per household, per year.

“I have had reports from constituents that if they cannot pay, or refuse payment in response to inadequate service, the management company initiate legal action, including sending bailiffs and threatening repossession of the property.

“Consequently, people are finding themselves trapped on a poorly maintained estate with escalating yearly fees – with no way to hold those responsible to account. This practice has to stop.

“This bill will cap and regulate estate maintenance fees to give people the security of knowing princes cannot increase indefinitely.”

Ms Goodman has worked alongside homeowners and campaign group Home Owners Rights Network (HorNet) to develop the bill.

Mr Lloyd said: "These charges have moved into rip-off territory. Most people when buying a house concentrate on important upfront issues like the cost of a mortgage. Ground rent is something people take for granted and people assume that management fees for maintaining the public space will be modest and the work promised will be done. Sadly, too many people in Rochdale and across Britain have been bitten by this scam. It’s unfair and Helen Goodman’s Bill in Parliament can stop that and that’s why I’m supporting Helen Goodman, my constituents and the Bill.”

Halima Ali, campaign co-ordinator of HorNet, said: “I would like to thank my MP Tony Lloyd for supporting the 10-minute rule bill tabled by Helen Goodman MP.

“What we are dealing with is a national scandal where homeowners are being exploited by developers who are using hard pressed working families to line their pension funds.

“Many people in Rochdale are affected by this new build tax and I would really recommend that our local councillors and planning department start to scrutinise properly how this scandal is affecting the residents of Rochdale before giving these developers planning permission.”

The Freehold Properties (Management Charges and Shared Facilities) Bill will now go forward to a Second Reading, which is scheduled on January 25, 2019.