Fleecehold

[DennisNedry]

Wondered what people's experiences are with "fleecehold" homes were, and how much public awareness there is about them.

 

The term fleecehold basically refers to housing estates where the properties are all freehold, however the freeholders have to pay 'estate management fees' to a private company for the upkeep of the green areas, roads, etc. This practice has become increasingly common in the past couple of decades and is now the norm on the majority of new build estates. Freeholders are legally bound to pay these fees (with repossession orders enforceable for those who don't), but there is often little transparency as to what the fees actually pay for, if anything. Fees often start at around £100pa but can rise year on year until they amount to £1000s pa. Freeholders have to pay full council tax as normal too. So in essence, homeowners are being treated like cash cows as these management companies can essentially charge what they like and have no incentive to keep costs to a reasonable limit.

 

The reason I raise this is that I am in the situation above and it strikes me as very unjust. I'm not necessarily playing the victim card as our solicitors did make us aware at purchase (albeit fairly far into the purchasing process and they assured us, as naïve 20somethings, that it was standard procedure these days and nothing to worry about), but it seems to me that as millions of freehold properties now have these arrangements and will continue to be built with them in mind, it will become increasingly difficult for people to avoid them. 

 

It does seem to me a little bit like the next PPI scandal in waiting. 

 

Basic article here: https://www.bbc.co.uk/news/amp/uk-england-46279048

Parliamentary discussion here: https://commonslibrary.parliament.uk/research-briefings/cbp-8497/

[Flamey]

First ( new build) house I owned was subject to these fees, everyone was constantly moaning about them as the only upkeep appeared to be a couple of chaps mowing the grass once in a while.

Glad I moved to an older house without them to be honest, I know it's part of the deal but after a while you feel like you are being mugged every month!

[VLC86]

People get confused with estate rent fees and services charges but they are two different things. I don’t believe ‘fleecehold’ applies to just a new build paying a service charge although they are still shit.

 

The estate rent charges are the ones to be worries about as they often mean you can be liable for your neighbours if they don’t pay and therefore they can kick you out of your house.

[FLAN]

Where we live it seems to benefit those in apartments who have their communal areas serviced but not sure what the hell I am paying out for 

[kenny]

2 hours ago, Costock_Fox said:

People get confused with estate rent fees and services charges but they are two different things. I don’t believe ‘fleecehold’ applies to just a new build paying a service charge although they are still shit.

 

The estate rent charges are the ones to be worries about as they often mean you can be liable for your neighbours if they don’t pay and therefore they can kick you out of your house.

You are correct.

 

Much of the money paid goes to form a contingency should major works be required to the roads or drains.

 

Estates are usually managed by management agents (which charge fees or profits) but they can also be self managed by committee of the house owners. This is rare as developers can't be arsed to set this up and the owners equally don't want the responsibility.

 

A lack of transparency for the money is an issue and the owners should know how the finances work.

 

The biggest con going is leasehold housing whereby you pay ground rent on the land the house is built on. This practice is appalling and has no reasonable reason for existing.

 

[Guest Chocolate Teapot]

3 hours ago, DennisNedry said:

Wondered what people's experiences are with "fleecehold" homes were, and how much public awareness there is about them.

 

The term fleecehold basically refers to housing estates where the properties are all freehold, however the freeholders have to pay 'estate management fees' to a private company for the upkeep of the green areas, roads, etc. This practice has become increasingly common in the past couple of decades and is now the norm on the majority of new build estates. Freeholders are legally bound to pay these fees (with repossession orders enforceable for those who don't), but there is often little transparency as to what the fees actually pay for, if anything. Fees often start at around £100pa but can rise year on year until they amount to £1000s pa. Freeholders have to pay full council tax as normal too. So in essence, homeowners are being treated like cash cows as these management companies can essentially charge what they like and have no incentive to keep costs to a reasonable limit.

 

The reason I raise this is that I am in the situation above and it strikes me as very unjust. I'm not necessarily playing the victim card as our solicitors did make us aware at purchase (albeit fairly far into the purchasing process and they assured us, as naïve 20somethings, that it was standard procedure these days and nothing to worry about), but it seems to me that as millions of freehold properties now have these arrangements and will continue to be built with them in mind, it will become increasingly difficult for people to avoid them. 

 

It does seem to me a little bit like the next PPI scandal in waiting. 

 

Basic article here: https://www.bbc.co.uk/news/amp/uk-england-46279048

Parliamentary discussion here: https://commonslibrary.parliament.uk/research-briefings/cbp-8497/

We're going through the same thing at the moment. Taking our landlord to tribunal as he's doubled thr service charge in the last 2 years. Fortunately we've all got wind of it and one of the residents has a lawyer pal who's helping with it but we've still had to pay the inflated charge, just 'under protest' and the landlord is trying to avoid a tribunal. Hoping we can settle, it appears our landlord is not the finest of blokes though.

[Rusko187]

Our first new-build home we had, we were paying for this but contested paying for a couple of months due to unsatisfactory work from the management company. In the end, we did have to pay.

Our second new-build home, it never actually got handed over to a management company due to a number of outstanding issues on the estate from the builder, we moved house last week and opted to not go for a new build.

 

It's incredibly sneaky, our understanding was that they needed to maintain the upkeep of the area, they did not do this at all.

[Guest Sharpe's Fox]

I think most highways are adopted but I see all the time surface water drainage and open space handed over to management companies on new build developments. It comes from local authorities being forced to accept so many new homes being built per year and absolutely no willingness by those same authorities to take on the open space and SuDS that are now required by planning policy. Of course the big housebuilders and the management companies they are very close with are very happy to take advantage of this since they make a killing.

Edited 3 April 2021 by Sharpe's Fox

[MPH]

4 hours ago, DennisNedry said:

Wondered what people's experiences are with "fleecehold" homes were, and how much public awareness there is about them.

 

The term fleecehold basically refers to housing estates where the properties are all freehold, however the freeholders have to pay 'estate management fees' to a private company for the upkeep of the green areas, roads, etc. This practice has become increasingly common in the past couple of decades and is now the norm on the majority of new build estates. Freeholders are legally bound to pay these fees (with repossession orders enforceable for those who don't), but there is often little transparency as to what the fees actually pay for, if anything. Fees often start at around £100pa but can rise year on year until they amount to £1000s pa. Freeholders have to pay full council tax as normal too. So in essence, homeowners are being treated like cash cows as these management companies can essentially charge what they like and have no incentive to keep costs to a reasonable limit.

 

The reason I raise this is that I am in the situation above and it strikes me as very unjust. I'm not necessarily playing the victim card as our solicitors did make us aware at purchase (albeit fairly far into the purchasing process and they assured us, as naïve 20somethings, that it was standard procedure these days and nothing to worry about), but it seems to me that as millions of freehold properties now have these arrangements and will continue to be built with them in mind, it will become increasingly difficult for people to avoid them. 

 

It does seem to me a little bit like the next PPI scandal in waiting. 

 

Basic article here: https://www.bbc.co.uk/news/amp/uk-england-46279048

Parliamentary discussion here: https://commonslibrary.parliament.uk/research-briefings/cbp-8497/

 

if you think that’s bad, don’t move to some parts of the states and buy a house where you are part of a home owners Association.  Collective decisions made for the individual homes - legally binding if you buy a house in certain areas.
 

on the surface it can look quite helpful- people are forced to keep their garden free from rubbish  and ‘ tame ‘ their grass,  but when helping  my  friend move into his house a couple of years back within 30 minutes of arriving  with the first load he was greeted by Someone from the Homeowners association  who welcomed him to the area and told him someone would be found in the morning to tell him which flowers he can plant and how far apart the bushes would have to be he wanted to plant- and which type of bushes, of course! Had to colour match with the other homes!

[Flamey]

13 minutes ago, MPH said:

 Someone from the Homeowners association  who welcomed him to the area and told him someone would be found in the morning to tell him which flowers he can plant and how far apart the bushes would have to be he wanted to plant- and which type of bushes, of course! Had to colour match with the other homes!

[VLC86]

14 minutes ago, MPH said:

 

if you think that’s bad, don’t move to some parts of the states and buy a house where you are part of a home owners Association.  Collective decisions made for the individual homes - legally binding if you buy a house in certain areas.
 

on the surface it can look quite helpful- people are forced to keep their garden free from rubbish  and ‘ tame ‘ their grass,  but when helping  my  friend move into his house a couple of years back within 30 minutes of arriving  with the first load he was greeted by Someone from the Homeowners association  who welcomed him to the area and told him someone would be found in the morning to tell him which flowers he can plant and how far apart the bushes would have to be he wanted to plant- and which type of bushes, of course! Had to colour match with the other homes!

I colour match my bush with my neighbours anyway so doesn’t sound too bad.

[MPH]

55 minutes ago, Costock_Fox said:

I colour match my bush with my neighbours anyway so doesn’t sound too bad.

 

sure, but you are CHOOSING to.

[DennisNedry]

16 hours ago, Costock_Fox said:

People get confused with estate rent fees and services charges but they are two different things. I don’t believe ‘fleecehold’ applies to just a new build paying a service charge although they are still shit.

 

The estate rent charges are the ones to be worries about as they often mean you can be liable for your neighbours if they don’t pay and therefore they can kick you out of your house.

I think the difference is, when you buy a leasehold property, be it a flat or house, you go in expecting to have some kind of service charge or ground rent. We paid that at our previous place and didn't really have a problem with it, as there was a communal stairway and gardens that were decorated and maintained. These areas were fob access only.

 

Whereas our house now is freehold and was advertised as such. When you buy a freehold you (clearly wrongly) assume you are free from fees of uncapped scale and for an indefinite time and expect your Council Tax to cover public areas. 

 

It also really sticks in the throat that people living opposite our estate walk their dogs and take their kids to the play area on our estate. Who can blame them of course. But they have no responsibility to pay for the upkeep while we do. 

[VLC86]

29 minutes ago, DennisNedry said:

I think the difference is, when you buy a leasehold property, be it a flat or house, you go in expecting to have some kind of service charge or ground rent. We paid that at our previous place and didn't really have a problem with it, as there was a communal stairway and gardens that were decorated and maintained. These areas were fob access only.

 

Whereas our house now is freehold and was advertised as such. When you buy a freehold you (clearly wrongly) assume you are free from fees of uncapped scale and for an indefinite time and expect your Council Tax to cover public areas. 

 

It also really sticks in the throat that people living opposite our estate walk their dogs and take their kids to the play area on our estate. Who can blame them of course. But they have no responsibility to pay for the upkeep while we do. 

Yeah don’t get me wrong it’s shit, I have the same thing where I live to the point where I haven’t paid the charge for the last year, but it’s different to what is defined as ‘fleecehold’ which is a massive disaster waiting to happen.

 

On the estate where I live we all complained about how shit they were so the company arranged a meeting with us. On the next review they itemised this meeting to explain how the cost has gone up by 50%  

[RobHawk]

I am effected by these charges and whilst it can be frustrating, we knew the deal when we moved in, I also had the added annoyance of the council upping my council tax band when we moved in too. 

 

It's just a way for the council's to save money, they get more council tax from the new homes but don't have as much outlay for them. 

 

The biggest annoyance for me is around 50% of what we pay is towards admin fees. But they don't actually do much. We also live near a school with horrible parking and access to pick up the kids and every mam and her dog uses our estate as a car park, it doesn't bother me but some neighbours get frothy at the mouth about it. But again the council don't care because it's not their problem.

[Sir Shep]

I’ve got to pay out £280 odd a year on this, but I agreed to this when I moved and so long as they don’t take the pi55 then I’ll happily pay it as I love where I live. 

[Stadt]

We need urgent planning reform. Most UK issues are downstream of the lack of housing.

[DennisNedry]

2 hours ago, Stadt said:

We need urgent planning reform. Most UK issues are downstream of the lack of housing.

 

And deliberately starving local government of funding since 2010.

[doverfox]

Havent bought one but they tend to be new builds and a lot of these are aimed at first time buyers with a government help to buy schemes and it seems at least where i live that the managment companies are doing sod all.   https://www.google.com/amp/s/www.kentonline.co.uk/canterbury/news/amp/developer-leaves-families-in-the-dark-217515/

Edited 4 April 2021 by doverfox

[Bayfox]

We are in a relatively new build. 6 years. Obviously the green space was the last thing completed so we have probably paid these fees for 3 or 4 years to a company called Greenbelt I think.

 

Ours equates to about £130 a year. We do get an annual statement showing each visit, be that for inspection, the mowing etc have to say during covid because we have been at home more they must come and do an inspection to the railings and play equipment almost monthly and they give you 12 months notice if the bill is likely to include and additional repairs, re planting etc. To be fair it is probably better kept that most the village parks etc. So I can't complain to much.

 

I do however fear a price hike at somepoint.

[Free Falling Foxes]

Do you still pay the regular council tax in these areas?

I assume it would be a less amount if another organisation was maintaining some parts of the estate.

[DennisNedry]

1 hour ago, Free Falling Foxes said:

Do you still pay the regular council tax in these areas?

I assume it would be a less amount if another organisation was maintaining some parts of the estate.

Yes, essentially we're paying full Council Tax and all we get for it is bin collection. And even that's on alternative weeks with an extra charge for a garden waste bin. But that's another topic to moan about  

[Blarmy]

My house is on an estate “ran” buy such a company. We had to pay £ 300 to them when we bought the house, and then around £ 300pa. We’re now selling, and the buyers solicitors requested the “standard management pack” in case it raised any queries. We had to pay £ 354 for the management company to send pdfs to the solicitors - pdfs that already existed and were not particular to our property.

 

£ 354. 

[Strokes]

47 minutes ago, Blarmy said:

My house is on an estate “ran” buy such a company. We had to pay £ 300 to them when we bought the house, and then around £ 300pa. We’re now selling, and the buyers solicitors requested the “standard management pack” in case it raised any queries. We had to pay £ 354 for the management company to send pdfs to the solicitors - pdfs that already existed and were not particular to our property.

 

£ 354. 

They are a disgrace some of them, ours don’t do anything of note and when we received the breakdown it was mostly administrative costs. 

Edited 5 April 2021 by Strokes

[Blarmy]

9 hours ago, Strokes said:

They are a disgrace some of them, ours don’t do anything of note and when we received the breakdown it was mostly administrative costs. 

I kicked off obviously but to no avail. The whole thing smacks of rip off; there’s this company that nobody asked for, that takes money off everyone on the estate for reasons unknown and appears to have you over a barrel even though there is no visible upside whatsoever. Just a passive money sink.

 

They claimed that part of the fee was to cover costs in case the buyers solicitors had an queries.  I asked “do I get a partial refund if there are no queries?” but of course this question was not answered. 

 

I insisted on a receiving a copy of the “pack” in case the sale falls through.