Call for end to 'unfair' charges on new home owners

September 26 2021
Call for end to 'unfair' charges on new home owners

COUNCILLORS have called for "extremely unfair" maintenance fees charged to new homeowners to be abolished in South Gloucestershire.

Mike Drew, the Liberal Democrat member for Yate North, said the estate charges for owners of new-build homes were “appalling” and asked at a public meeting what the local authority was doing to stop the practice.

Freehold and leasehold owners of homes in new housing developments such as Ladden Gardens in Yate are increasingly having to pay annual ‘estate charges’ - dubbed "fleecehold" charges by critics – for the upkeep of communal areas, such as roads, footpaths, green spaces and play areas.

Councils traditionally adopted new housing developments and maintained the common areas as part of the services funded by council tax.

But increasingly developers keep possession of the communal areas and hire a private maintenance firm, or sell off contracts to them, to keep them tidy and functional.

There is no restriction on what companies can charge, and the estate charges – also called ‘maintenance fees’ or ‘rent charges’ – can rise year on year.

There is also no legal recourse for homeowners to challenge the fees, as the obligation to pay is written into their property deeds. 

Homeowners – even freehold owners who own their home and the land it is built on – must pay the estate charge as well as paying council tax.

Cllr Drew told a meeting of the South Gloucestershire strategic sites delivery committee (pictured above): “It is extremely unfair because there’s absolutely no control on the amount that the developers can charge.

"Some of these people on my estates are paying more in their estate management fees than they are paying the town council in council tax – and the town council does far more than an estate management [company]. 

“It’s appalling that we are allowing this to happen in our areas.”

Council solicitor Tonya Meers told the meeting in late August that the council has no control over what management companies charge and it was a matter between the developer and the homeowner.

She said legal agreements signed off by the council require developers to put in place a system for managing public open spaces within a new housing development.

Emersons Green Conservative councillor Colin Hunt, who chairs the committee, said he would make enquiries about whether the council had raised the matter with the Government.

Campaign group Home Owners Rights Network (HorNet) says tens of thousands of households are subject to the charges.

It is calling on councils to adopt new housing developments and for the law to change to protect homeowners from the charges.

The Ministry of Housing, Communities and Local Government is planning to bring in legislation to give freeholders more rights to challenge them, but HorNet says this does not go far enough.

By Amanda Cameron, Local Democracy Reporting Service