Calls to protect ‘powerless’ homeowners from ‘exploitative’ private estate contracts

Nicholas Thomas Local Democracy Reporter

“More and more” residents on new housing developments find themselves locked into “exploitative” private estate management contracts – landing them with higher bills and questionable value for money, councillors have heard.

A Caerphilly Council committee was told in the worst cases, people find themselves on the receiving end of “threatening correspondence” from firms demanding payment for maintenance work, when there is little evidence it is carried out.

“We now know that across our communities, more and more residents are finding themselves tied into mandatory private estate management arrangements when they purchase their homes,” said Penmaen ward councillor Roy Saralis.

“These contracts are not optional. They are embedded in the deeds, imposed at the point of sale, and extremely difficult – often impossible – to change.”

He told the council’s housing committee residents felt “powerless” to get out of private estate contracts that under irresponsible firms could lead to “deeply concerning” practices.

These included annual increases to fees “that are poorly explained and difficult to challenge”, and legal warnings for even slightly late payments.

He said those letters create “unnecessary stress and anxiety… for many families already struggling with mortgage payments and the wider cost of living”.

Cllr Saralis also said residents had reported “clear examples of failure to carry out maintenance” by management firms they were compelled to pay.

Homeowners who wish to move face contract transfer charges that “can run into hundreds of pounds, and can delay or even jeopardise property sales”, he said, adding many residents have raised “the recurring problem of poor communication” with their management firms.

Members of the committee voted unanimously to back a notice of motion by Cllr Elizabeth Davies – who also represents Penmaen – asking the council to pressure ministers and regulators to clamp down on private management contracts and tighten the rules.

In her motion, Cllr Davies said “these arrangements have become prevalent due to the increasing failure of housing estates to be taken in charge by local authorities”.

Cllr Judith Pritchard said she would support the motion but believed councils had previously opted out of taking on new housing developments “to save money”.

The committee chairman, Cllr Andrew Whitcombe, noted the motion had received “extended cross-party support from Caerphilly councillors.

In comments read out by Cllr Saralis, Cllr Davies also noted the late Caerphilly Senedd Member Hefin David had championed the calls for a better deal for homeowners – and Islwyn MS Rhianon Passmore had also supported residents in Penmaen.

The Senedd heard cross-party support calls for improvements and protections last September, in a debate held in memory of Dr David and his decade of work on the issue.

In December, the UK Government announced new plans to give residents “more power to tackle unreasonable charges for upkeep of shared areas”.