MP backs move to end "fleecehold" charges on newbuild homes

Sefton Central MP Bill Esterson is backing a new law that seeks to "end fleecehold" by controlling newbuild homeowner fees and the quality of shared facilities on residential estates.

The Freehold Properties (Management Charges and Shared Facilities) Bill, which has been put forward by MP Helen Goodman and sponsored by the Sefton Central MP, would regulate fees charged by management companies to freeholders of residential properties on new housing estates and make provision for self-management of shared facilities by freeholders.

The Bill would also require management companies to ensure any shared facilities are of a suitable standard.

The MP said: "Some of the fees charged to freeholders of residential properties by management companies are very high and uncontrollable. This Bill seeks to address this imbalance of power between homeowners and management companies.

"In Sefton Central we have a big issue with leaseholders being charged extortionate fees in ground rent and for making changes to their properties and these fees incurred by freeholders mirrors many of the same issues. We need to end leasehold and 'fleecehold'."

The Bill would make provision for the regulation of fees and the self-management of shared facilities, such as recreational spaces, by freeholders. It would also make provision to require management companies to ensure shared facilities are of a suitable standard.

In a submission to the HCLG committee looking at leasehold reform, the pressure group the Home Owners Rights Network raised concerns about onerous estate charges on privately owned new build homes.

They said: "The issue affects leasehold and freehold home owners, and will continue to affect leasehold home owners should the government make it easier and cheaper for them to purchase their freehold.

"We are a network of nearly 4,000 ordinary home owners who have found themselves caught in this trap. Most of our members report they were unaware of what they were getting into, very like the leaseholders who were not informed about their onerous ground rent reviews.

"There is a huge unaddressed problem for home-owners on these managed estates."

The pressure group called for the Government to: "Return housing throughout the UK to the traditional model whereby all new homes are truly Freehold (or in some circumstances Common hold), where the only charges and responsibilities the new home-owners have are to their Local Authorities."

Mr Esterson added: "What is happening is homeowners who have been trapped in a leasehold agreement may buy their freehold thinking they are free from these charges, yet find they are still liable to pay for the maintenance of shared areas on their estate, with no legal recourse. You go from owning your leasehold to buying the freehold only to be fleeced without any right to challenge fees or ask for proof of payments and services. Leasehold and 'fleecehold' go hand in hand and it has to stop."