In the last ten years there has been a massive increase in developments that rely on estate rent charge deeds to collect funds to maintain public open spaces, gates, gutters, play areas and more. Why the increase? Principally because local authorities no longer adopt roads on new developments nor pick up responsibility for play areas, grassed areas, woodland and other amenity and public spaces.
A number of factors resulted in this change. Firstly LA's required roads to be to adoptable standards - and these were often set at impractically high standards for developers. Secondly commuted sums were no longer made available to LA's so that they could manage these areas.
Of course we could argue that new home owners will already be paying a local taxation that should cover such services, but somehow this has been shrouded over time. What we are left with is an additional charge to maintain and insure public amenity space and this management opportunity has been embraced, not only by traditional property management agents but by highly specialised amenity management companies. Neither are not bound by any specific landlord and tenant legislation that would apply to, for example, management of a leasehold block of flats.
Charges tend to be modest and relate to grounds maintenance, road and gutter maintenance and public liability insurances. However they may also include pumps, water purification, water features, play areas, gates etc. Basically anything that cannot be red-lined to a specific property is picked up. There must be a fee for this activity so it is easy to see how costs can quickly move from modest to quite significant.
Sometimes there is an amenity company created to ensure these matters are dealt with that is held by the agent. Sometimes there is simply a deed requiring a payment calculated by an agent. Either way there is nothing that might control the behavior of the service provider and in many cases no way of removing them from office or of ensuring value for money is always achieved. There is no need for the incumbent provider to evidence any price testing or to develop any performance indicators although the Rentcharge Act 1977 does require charges to be reasonable and this is not just limited to the provision of services.
There are no trade bodies, qualifications or regulation in this sector but because costs are generally fairly low the topic does not often reach the headlines. Collection of charges is usually straightforward and covered by s.121 Law of Property Act 1925 which could allow distraint of goods or even re-entry under certain circumstances, leaving the freehold house owner with little choice but to pay regardless of the quality of services (EDIT I am subsequently advised by my learned Twitter friends that this abolished in April2014).
Isn't it time that freehold home owners who contribute to amenity land or estate charges were given the same protections as leaseholders? After all there are a very significant number of large regeneration schemes now underway that will rely on collection of such charges to maintain significant infrastructure on village sized and often mixed use/tenure developments.
For more information look at the Rentcharge Act 1977 http://www.legislation.gov.uk/ukpga/1977/30/part/1
A number of factors resulted in this change. Firstly LA's required roads to be to adoptable standards - and these were often set at impractically high standards for developers. Secondly commuted sums were no longer made available to LA's so that they could manage these areas.Of course we could argue that new home owners will already be paying a local taxation that should cover such services, but somehow this has been shrouded over time. What we are left with is an additional charge to maintain and insure public amenity space and this management opportunity has been embraced, not only by traditional property management agents but by highly specialised amenity management companies. Neither are not bound by any specific landlord and tenant legislation that would apply to, for example, management of a leasehold block of flats.
Charges tend to be modest and relate to grounds maintenance, road and gutter maintenance and public liability insurances. However they may also include pumps, water purification, water features, play areas, gates etc. Basically anything that cannot be red-lined to a specific property is picked up. There must be a fee for this activity so it is easy to see how costs can quickly move from modest to quite significant.
Sometimes there is an amenity company created to ensure these matters are dealt with that is held by the agent. Sometimes there is simply a deed requiring a payment calculated by an agent. Either way there is nothing that might control the behavior of the service provider and in many cases no way of removing them from office or of ensuring value for money is always achieved. There is no need for the incumbent provider to evidence any price testing or to develop any performance indicators although the Rentcharge Act 1977 does require charges to be reasonable and this is not just limited to the provision of services.
There are no trade bodies, qualifications or regulation in this sector but because costs are generally fairly low the topic does not often reach the headlines. Collection of charges is usually straightforward and covered by s.121 Law of Property Act 1925 which could allow distraint of goods or even re-entry under certain circumstances, leaving the freehold house owner with little choice but to pay regardless of the quality of services (EDIT I am subsequently advised by my learned Twitter friends that this abolished in April2014).
Isn't it time that freehold home owners who contribute to amenity land or estate charges were given the same protections as leaseholders? After all there are a very significant number of large regeneration schemes now underway that will rely on collection of such charges to maintain significant infrastructure on village sized and often mixed use/tenure developments.
For more information look at the Rentcharge Act 1977 http://www.legislation.gov.uk/ukpga/1977/30/part/1
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