Scarborough homeowner among thousands in the country caught up in 'fleecehold' contracts

A homeowner in Eastfield is warning buyers of ‘fleecehold’ contracts that see them fork out hundreds of pounds per year on uncapped maintenance fees.

Thursday, 18th July 2019, 3:08 pm
The Middle Deepdale estate.

Nathan Holden bought his first house on the Middle Deepdale estate in 2015.

Prior to the purchase of his freehold property, the 27-year-old project manager was told by housing developer Keepmoat of a service charge of £12 per month – to be paid monthly on top of council tax and average household bills – for the maintenance of communal areas.

These include some green spaces and a car park looked after by Blue Property Management, a company sub-contracted by Keepmoat.

“At first I was okay with it, £12 a month is not that much but then a year later it started to increase and now it’s got to about £240 per year which is almost double what we were told,” he said.

“There are 34 households paying these charges so it’s about £7,780 a year for essentially cutting a bit of grass.”

As the father-of-one later realised, homeowners on private estates have little to no rights to challenge these management companies and stop the cost from spiralling.

“You’re sold these houses and none of this is raised as a concern. There’s no information to tell you that you’ll be in this contract with these companies and there’s no legal protection whatsover.

“£240 might not be a lot but it’s a massive increase and we have no way to say ‘okay that’s enough now’ because legally we have no leg to stand on.”

A spokesperson from Keepmoat Homes said that the company was “not aware” of the service charge increase, but added: “We will be approaching the management company to discuss this issue on behalf of our customers.”

In the meantime, though, more houses are being built and Mr Holden fears that more people will find themselves in the same situation.

“It makes you feel a bit hopeless because as a first-time buyer you’re buying a property and it all sounds fantastic but then you later find out about these charges that have got no cap on and you can’t argue against. It’s a bit depressing.”

Councillor Tony Randerson, a ward councillor for Eastfield said: “It’s despicable, it’s like a hidden tax and it needs to be addressed. I’ve been in touch with MP Robert Goodwill who passed it on to the Housing Minister.

“I can make all the right noise up here but really it’s down to Westminster to change the legislation because it’s not just this estate, people are buying these houses without knowing what they’re getting into.”

What does Blue Property Management say?

Blue Property Management has clarified its position.

According to the company, the initial sum agreed in 2015 was “a draft budget” prepared while the site was still being built and once the development was completed and handed over in 2017 charges amounted to £185 per year.

However, the company stressed that “it’s very hard to set up a first budget as there is no information to base it on”, adding that in subsequent years it can be set up much more accurately.

The response is disputed by Mr Holden who says the information does not correspond to the answers he was given when he approached the company.