The reality of estate rentcharges – inability to sell a home

As in Cranbrook, and possibly other areas of East Devon. In Cranbrook, the town council is taking on these charges and includes it with the precept, so everyone in the town pays for them whether they are part of thse developer’s estates or not.

“‘Freehold charges cost us our dream home’

Peter Kirby and Jen Tweedle, with children Amelia and Zac, say they’ve been told their house could be unsellable
“To be honest we were absolutely devastated by it. You would never buy a house without being able to sell it again”.

Jen Tweedle is talking about the moment she and her fiancé Peter realised why their house sale fell through over the summer.

Their buyers couldn’t get a mortgage after discovering Jen and Peter’s new-build, freehold property was subject to an estate rentcharge.

Peter said: “We lost the sale and our dream house… and that was very disappointing.”

What is an estate rentcharge?

An estate rentcharge is imposed when private developers build housing estates that the local authority won’t “adopt”, meaning councils won’t pay for the upkeep of public spaces or roads on that estate, or pay for things such as street lighting.

When that’s the case developers – or once any building works are finished, residential management companies – establish the charge to pay those bills.

But some residents have criticised this process, saying they have very little control over the charges and that there’s not enough transparency about exactly what they’re paying for.

In addition to this, crucially, if homeowners fall 40 days behind on their payments, the law on estate rentcharges allows developers, or management companies, to take possession of a property to ensure they get the money they’re owed.

Although this is extremely rare, the fact that the legal right exists can put potential buyers off and leave mortgage providers unwilling to lend on properties subject to rentcharges.

However, the Home Builders Federation says rentcharges are the fairest way to make sure communal areas are paid for and maintained.

‘Unsellable’

In Peter and Jen’s case, their potential buyers couldn’t get a mortgage agreed because the home was subject to an estate rentcharge.

“We bought our house [in Oxfordshire] back in July 2016 and we were informed by the estate agent there’d be a service charge which, coming from London, we weren’t worried about,” Peter says.

“Basically we weren’t told by our solicitor or by our estate agents what an estate rentcharge actually meant in terms of the law”, Jen adds.

She’s also unhappy at how they were treated by the developers, their solicitors and estate agent, and how they didn’t even find out their rentcharge might be a problem until they tried to sell.

“The sudden surprise of it all, the fact that the term ‘your house is unsellable’ was thrown at us… you would never buy a house to not be able to sell it again.”

For now, Peter and Jen have taken their home off the market and will look again in the new year.

“We have to be resigned to the fact that this problem may reappear.

“Probably about £2,500 has already been paid out and we still need to pay solicitors another £1,500 hoping they will be able to sell our house, we don’t know.

“Maybe our house is unsellable.”

Beth Rudolph, a director of the Conveyancing Association, says the failure of house sales due to estate rentcharges is becoming more common.

“Just yesterday a developer refused to vary the terms of a rentcharge that the lender had confirmed was not acceptable to them because of the risks to themselves and the borrower,” she says.

“We need the government to intervene to change the law so that someone cannot effectively lose thousands of pounds because they forgot to pay a £6 rentcharge.

“We would absolutely expect that any rentcharge owner should be able to recover arrears of payments in the normal debt collection way, but not to be able to grant a long lease or possess the property.”

‘Fairest way’

Andrew Whitaker from the Home Builders Federation says because of cuts to local authority budgets many local councils just don’t have the money to adopt estates like they would have in the past.

“As part of a development we [developers] build places – not just homes. So things like parks, shared spaces, roads,” he says.

“In the past we used to hand all of this to the local authority and they’d maintain it in the future. Because of cuts and local authority budgets being strained they are less keen to do this.

“They still need maintaining and the fairest way to do this is to establish an estate rentcharge.”

https://www.bbc.co.uk/news/business-50519066

Why are only half of Cranbrook residents using the soon-to-close doctors surgery?

Could it be the transient nature of renters in the town? Or no effort to sign people up? Or its poor location?

Whoever heard these days of doctors complaining they don’t have enough patients!

“Cranbrook residents are hoping to find out more about the future of its GP surgery which is at threat of closure due to low patient numbers, staffing problems and financial problems.

Access Health Care (AHC), which runs Cranbrook Medical Centre in Younghayes Road, has revealed it will not be extending its contract which is due to expire on March 31, 2020.

It is not known what will happen to the centre after that time, but Devon’s Clinical Commissioning Group has assured it is working on potential solutions.

AHC, which operates five Plymouth GP surgeries, as well as Cranbrook Medical Centre and Exeter’s Clock Tower Surgery for the homeless and vulnerably housed, has stated the following reasons for not renewing the contract.

Currently only around 3,500 of the 6,500 residents at Cranbrook are registered

AHC cannot recruit the necessary GPs and nurses to provide the service required

The location of the surgery

A lack of government funding per patient to run an effective GP service” …

https://www.devonlive.com/news/devon-news/residents-await-outcome-cranbrook-gp-3563934

Cranbrook sports facilities not good enough – developers refuse to help

Penny-pinching in 2014, penny-pinching now.

“Cranbrook could be set to get a new bar and club room as part of facilities for the town’s sports hub – as the original plans for the site have been declared inadequate.

The sports hub at Cranbrook – known as Ingram’s field – has been up and running since May 2019, five years after it was initially conceived, and this summer finally saw football and cricket played in the new East Devon town.

The 2014 application for the site saw a design and layout for a changing room building also approved and five years later, the developers are finally in a position to deliver it.

However James Brown, Cranbrook New Community Manager, in a report to East Devon District Council’s cabinet, says that while it would meet the historic obligations, that design is not appropriate for today’s needs. …

He instead is proposing that the cabinet back plans that would see a bigger building built that would consists of six changing rooms, rather than four, and would also include a family room and a bar and club room.

The developers have said that they would invest only their original budget towards the newly enhanced pavilion and would not meet any additional costs, and have added that they are not prepared to undertake the design work and minor revisions to the building to bring it within budget. …”

https://www.devonlive.com/news/devon-news/new-bar-sports-facilities-planned-3558292

“Freezing home forces disabled Cranbrook mum to be separated from her young twins”

Is this the district heating? Not a good ad for Eon or Cranbrook …

“A young disabled mum with 15-month-old twins has told how the dream of finally moving into a permanent home in Cranbrook – after being rehoused four times since they were born – has turned into a nightmare.

Amber Owen-Jones has not seen her children for five days because they are having to live with her mother in Somerset as their new ‘freezing’ two-bedroom housing association property has no hot water or heating.

Last Friday, the 19-year-old and her partner Michael Korth, 21, picked up the keys to their new home and say that when they realised not all the utility services were working, a LiveWest employee notified energy provider Eon by emailing them their tenancy agreement to get a new account set up. …

However, they say they were told someone won’t be coming until today, October 30, and no time was confirmed.

Amber said: “Eon were refusing to turn our hot water and heating on. The house is absolutely freezing.

“My children even had blue feet as we have no carpets. Eon kept saying they will sort it out on Wednesday, but it’s not acceptable. …”

https://www.devonlive.com/news/devon-news/freezing-home-forces-disabled-cranbrook-3478804

DevonLive’s best misleading headline yet! “Cranbrook will get its town centre within years”


NOT the design – just a warning!

The headline appears above an article which suggests that Cranbrook developers will now get away with financing “one multi-use building” (cheap) instead of the larger number of (more expensive) single-use buildings they were supposed to construct!

The part of the article not reproduced is the second half where DCC councillors (including former EDDC Leader Sarah Randall-Johnson) desperately try to pretend this is good news.

“… The multi-purpose building would provide flexible space for children’s, youth, adult and library services with potential use for public health and highways services, as well as space for the town council.

The trigger point for the provision of the children’s centre facilities– 2,000 home occupations – has been met which means the Cranbrook consortium of developers have to construct the children’s centre facilities no later than June 10, 2021.

The existing planning agreement also requires them to provide town council offices in the town centre by June 2021, and youth facilities and a library when the 3,450 home is occupied, currently expected to be in 2025.

Devon County Council’s cabinet on Wednesday morning though unanimously agreed to try and renegotiate the agreement so that the multi-purpose building can be built, and subject to funding, should be complete within the next two years.

It would be built on land that is supposed to be the town centre, but currently remains an empty green space.

Cllr Rufus Gilbert, cabinet member for economy and skills, said that bringing forward the delivery of the library and the youth services would provide the town with the services that it needed. He added negotiations were still ongoing, but he enthusiastically welcomed the move, saying: ”
“The existing agreement is for these key services – the library, youth and a children’s centre facilities – to be built over the next two to six years.

“But as the town is continuing to grow, especially noting the high proportion of families with young children and need for additional support, we must bring them forward.

“We believe that our proposed integrated community facilities building in Cranbrook’s town centre is the best way to provide these required facilities.

“It would allow residents to benefit sooner, and give us greater control over the design and delivery of the facilities.” …”

https://www.devonlive.com/news/devon-news/cranbrook-town-centre-within-years-3414376

Cranbrook: one multi-purpose DCC building triggered – maybe, if money available

But no plans for anything else.

“If all goes to plan the community facilities building will include a flexible space for children’s, youth, adult and library services with potential use for public health and highways services, as well as town council working space.

The building could be completed within two years, if funding is secured.

The trigger point for the provision of the children’s centre facilities – 2,000 homes being occupied – has been met which means the Cranbrook consortium of developers have to construct the children’s centre facilities no later than June 10, 2021.

The existing planning agreement also requires them to provide town council offices in the town centre by June 2021, and youth facilities and a library when the 3,450th home is occupied, currently expected to be in 2025.

But council officers are recommending the agreements be renegotiated so that a multi-purpose building can be built.

Nearly 2,000 homes in the new town are currently occupied and while the town has a primary school, an allthrough school, a multi-purpose building with GP surgery space and a train station, the only building that has been provided in the town centre is a the pub Cranberry Farm.

Other facilities such as additional town centre shops and a food store are commercially led and will likely only come when there are more people living in the town. There are no fixed timescales for when it may happen. …”

https://www.midweekherald.co.uk/news/tow-centre-community-building-plan-at-cranbrook-revealed-1-6302771

“District bosses accused of neglecting Cranbrook – but they say authority faces its own finanical pressures”

“The district council has been accused of neglecting its duties to support Cranbrook compared to other towns across East Devon.

In two letters sent to East Devon District Council’s (EDDC) deputy CEO, Richard Cohen, Cranbrook Town Council chairman Les Bayliss urged the authority to integrate Cranbrook and provide it with the same level of support it gives other towns. Cllr Bayliss said: “If Cranbrook is to continue to flourish, the community needs the district council’s investment.”

The town council has asked EDDC to help cover sizeable ground maintenance costs for Cranbrook’s country park.

Cllr Bayliss said a ‘substantial’ amount of council tax in Cranbrook – which is the fifth-highest tax in England out of more than 10,000 parishes – goes towards maintaining the green space. Cllr Bayliss said the maintenance costs are in the region of £200,000 per annum, adding: “It is clearly unfair that the cost burden is carried by Cranbrook taxpayers alone.”

The town council has also demanded the district council provides 500m² of commercial space in Cranbrook’s eagerly-awaited town centre. Cllr Bayliss said: “The development of [the] town centre in Cranbrook has not commenced to date, despite discussion among various partner organisations for many years.”

However, in a letter in response to the concerns, EDDC CEO Mark Williams blamed the district council’s own financial difficulties it faces in the short to medium-term future for its perceived lack of support.

He said: “It will increasingly be the case that communities will have to expect to fund their own assets as principal councils are fundamentally compelled by the Government to focus on statutory services.”

Mr Williams also dismissed the town council’s request for help funding the country park maintenance cost.

He said: “Representatives of our countryside service held extensive discussions with Cranbrook Town Council on a management plan that we initially submitted to [Cranbrook] Consortium with our proposals and costs associated with managing and adopting the country park… I assume that in seeking transfer of the land to the town council, you will have assessed the cost of managing and maintaining the land and reflected this in the precept amount you are charging your residents.”

https://www.midweekherald.co.uk/news/cranbrook-funding-request-to-eddc-1-6298803