Justin Madders

“I start by referring the Chamber to my chairmanship of the leasehold and commonhold reform APPG, where I work closely with organisations such as the Leasehold Knowledge Partnership and the National Leasehold Campaign, to which I pay tribute. As we have heard, complaints from constituents about management companies and the exorbitant fees they charge are something that we all deal with on a weekly basis. It is not a new phenomenon; it is something that I raised on the Floor of the House five years ago because I could see it becoming the next big scandal, and sadly that has come to pass. Homeowners who buy their homes in good faith understandably expect to live in a functioning estate where responsibilities are clear and, where necessary, charges are fair. All too often, the opposite is the case. Homeowners are left in the pernicious situation of paying for services once in their council tax bill, and once again in extortionate service charges. Poor services are often exacerbated by a lack of accountability. Residents are forced to persistently chase matters, while frequently being passed from one organisation to another without resolution. But as soon as residents fall behind with a payment, these companies leap into action, often using aggressive debt collection tactics. Adding insult to injury, the financial structures of these estates are all too frequently opaque: governance structures lack transparency; companies are labelled as dormant for accounting purposes; and dodgy practice—where freeholders, management companies and debt recovery companies operate in an interconnected web—allows them to rack up eye-watering fees. I will cite one very recent example from my constituency, where a constituent owed some service charges to RMG, with which I think we all are familiar. Looking at his bill, the constituent had been charged an instruction fee and a client admin fee on top of his service charges, adding another £600 to the bill, yet RMG had somehow managed to inflate the £1,100 owed in service charges to £3,300 by the time court papers were issued. There is no world where a trebling of this sum can be justified, and it just shows what a scam the system is. Time and again, I see people raising problems from a range of new build developments in my constituency, including Ledsham Garden Village, Mersey View and Jacks Wood estates, where homeowners face a range of challenges. In Ledsham Garden Village, residents are facing combined service charges and fees running into hundreds of thousands of pounds, although only a fraction of the spending can be accounted for, which just rubs salt into the wound. Residents do not have any idea how the money is being spent and if it is being spent on the estate at all; they do not know whether the company is getting best value for money, how reserves are being used or how costs are allocated over different phases of the development. There are persistent maintenance issues, inconsistent grounds maintenance and safety concerns because of poor traffic management. People who buy their homes in good faith deserve better. Then there are the Jacks Wood estate in Ellesmere Port and the Mersey View estate in Bromborough, where the adoption process has effectively stalled, leaving residents in limbo. The regulation of managing agencies is clearly something this House would like to see, but I would like to make some further suggestions. We could introduce standard costs across the country for estate management fees so that there would be a baseline from which to judge these companies. Residents could be given a far greater say over who manages their estate. We could have three-yearly ballots in law on whether they wish to carry on with the same management agents, which could end the “put up or shut up” approach that a lot of these companies adopt. As we have heard suggested today, an immediate step the Government could take would be to make it a condition of any planning permission moving forward that the developers must hand over the whole estate adoption to the local authority and pay a commuted sum for it, ending that revenue stream entirely.”