Unreasonable fleecehold charges could be abolished

A private members bill designed to ban unacceptable freehold charges on private estates has been launched in parliament.

Homeowners on private estates currently face unregulated and uncapped maintenance fees where the local council does not maintain the land.

This has led to allegations that developers have created a "cash cow" with charges applied to roads, lighting and communal areas. In some cases, this has left homeowners with exorbitant fees and nowhere to turn.

At present, it is thought that around 1.3 million properties could be affected by these fees. With claims that they are not clearly advertised when the property is being sold.

Such “estate charges” or “service charges” are on top of council tax payments, even though the council doesn’t maintain their street.

Worryingly, many developers are selling the land to third-parties that hike up these fees. The system is also thought to be open to abuse because management companies have no obligation to keep costs down.

Research also shows that property owners are often not consulted before any work is done and many companies don't even provide evidence that the services they charge for are being carried out.

According to Helen Goodman, Labour MP for Bishop Auckland, “the fees are high, rising, uncapped and unregulated. One constituent told me their fee had risen from £60 to £134 in four years – at this rate it will be £3,313 in 16 years’ time. Another constituent faced a 50 per cent rise in one year.”

Under the current legislation, homeowners can be threatened with repossession if these charges are not paid. So, all too often the dream home turns into an unaffordable money pit.

However, under the proposed legislation - The Freehold Properties (Management Charges and Shared Facilities) Bill - these charges would have to be proportional and fair in the future.

The Bill will also ensure that developers provide clear information on any such charges during the sales process and that homeowners will have increased powers to challenge unjustifiable costs.

If you’re ready to purchase a home, we can check the status of any charges, answer any queries you might have, and talk you through your options. We can also assist you if you feel you are being charged unfairly.