The petition of Residents of Tadros Court, Ercolani Avenue and Roperies in the Windsor Gate development, High Wycombe,
Declares that during the last three years, service charge costs have surged, but services have fallen for the residents of the Windsor Gate development, High Wycombe, a right-to-manage mixed estate comprising of freehold and leasehold blocks built by Bellway in 2006; further that residents are not provided with the services declared; further that the services that are provided are of substandard level or are not needed; further that freeholders are paying for locked and gated private amenity space for flats; further that the estate is run down, with little or no maintenance; further that there is letter, pests and weeds throughout; further that residents pay the same service charge whether they occupy a 1 bed flat or a 3 bed flat, due to mistakes made by the developer; further that increases in charges are not transparent and have been made without property resident input; further that there has been clear degradation of duty with regards to freeholders, with poor correlation between the rents demanded and the works undertaken in maintenance of the surrounding areas; further that resident directors and managing agents responsible for the collection of the service charges are aware residents lack rights and protections under any Act of Parliament; further that there is no process to receive and consider accounts prior to payment, or to be provided with information relating to the charges claimed; further that voting rights of all who are in shared ownership and in social housing have been removed.
The petitioners therefore request that the House of Commons urges the Government to introduce legislation to give greater transparency and accountability for service charges in residential developments; further urges the Government to conduct a full investigation of the “fleecehold” practice as it is causing owners stress, anxiety and distress and in some cases, has required going to court.
And the petitioners remain, etc.—[Presented by Mr Steve Baker, Official Report, 9 September 2019; Vol. 664, c. 5P .]
[P002520]
Observations from the Minister for Housing (Ms Esther McVey):
The Government are committed to reforming the leasehold system and announced a package of measures to tackle unfair practices in the leasehold market and promote transparency and fairness for leaseholders and residential freeholders.
As part of these measures, we intend to legislate to ensure freeholders who pay charges for the maintenance of communal areas and facilities on a private or mixed use estate can access equivalent rights as leaseholders to challenge their reasonableness.
We set out our approach to implementing these measures in the Government response to the consultation implementing reforms to the leasehold system in England. We intend to create a new statutory regime for freeholders based on the leaseholder rights contained in the Landlord and Tenant Act 1985 to ensure maintenance charges must be reasonably incurred and services provided are of an acceptable standard. It will also afford freeholders a right to challenge the reasonableness of charges at the property tribunal.
The Government also believe that service charges should be transparent, communicated effectively and that there should be a clear route to challenge or redress if things go wrong.
In October 2018 the Government established a working group of independent experts across the property sector, chaired by Lord Best to advise Government on a new regulatory framework for property agents. The group also considered the use and transparency of service charges and other leaseholder fees and charges.
The working group presented its final report to Government on 18 July. To improve the transparency of service charge information for consumers, the group suggested that the Government should consider consulting on the detail and use of a new mandatory standardised charges form for both leaseholders and freeholders, and should also explore standardising both the information that is presented and the form.
We are considering the report’s recommendations carefully and will announce next steps in due course.
The competition and markets authority (CMA) has also announced an investigation in to mis-selling and unfair terms in the leasehold market. This includes exploring potential unfair terms, that is, whether people are having to pay excessive fees due to unfair contract terms. This will include administration, service, and “permission” charges—where homeowners must pay freeholders and managing agents before making home, improvements—and ground rents, which in some cases can double every 10 years.
The Government look forward to hearing progress on the CMA's work later this year.