By Harry Scoffin
On Wednesday, Parliament will hear a private member’s bill designed to force management companies of housing estates to provide transparency around unregulated “fleecehold” charges.
Preet Kaur Gill, Labour MP for Edgbaston and shadow minister for international development, will make the case for her Freehold Properties (Management Charges) Bill immediately after prime minister’s questions.
If passed, the law would oblige landlords to provide accounts of management charges payable under Section 19 of the Leasehold Reform Act 1967 to freehold property owners.
It is the second legislative proposal on fleeceholding to be raised in recent months.
Ms Gill says the existing law requires urgent reform. She claims Section 19 expects more from the consumer homeowner, who pays the fees, than the landlord or scheme manager who is expected to provide a service.
Ms Gill has been working closely with the Calthorpe Residents’ Society in her constituency who have faced difficulties as a result of their management schemes.
In comments to Leasehold Knowledge Partnership, Ms Gill said:
“It is clear to me that in its current form, the balance of power is not fair nor is it appropriate. Management companies can, by law, use enforcement agents to collect the management charges but individual dwelling freeholders are unable to even obtain details of where the money they have been charged goes or has gone.
Residents who own their own homes as freeholders are left feeling helpless as they try to find out how much is left in the scheme and they are rightly aggrieved that, despite their payment into said fund, the opaqueness of it makes them powerless to try and enforce the responsibilities of the landlord or management scheme manager.”
Meanwhile, Bishop Auckland MP Helen Goodman awaits a second reading of her Freehold Properties (Management Charges and Shared Facilities) Bill.
Proposed in November, Goodman’s policy makes express provision for a cap on charges. It also seeks to empower freehold homeowners to self-manage, which is an improvement on the government’s stated ambition of granting non-adopted private housing estates the right to a court-appointed manager (despite LKP concern over the viability of Section 24).