Developers (“Cranbrook Limited”) still seem to hold all the cards in the town

From Town Council website:

“For distribution – question: What is “Cranbrook Limited” referred to in the last line?

Town Council site:

“The Town Council has been advising previously that we have been chasing the Consortium to release householders from the rent charge deed and yesterday we received the following statement:

“The development partners, Persimmon Homes, Taylor Wimpey and Hallam are continuing to work with their agents to conclude the Estate Rent Charge audit process and Deed of Release on final payment of balances due from each household. Please bear with us as we complete these tasks. We will continue to liaise with the Town Council on this and update you further in due course.”

Whilst we are doing all we can to help progress this matter, the Town Council is not responsible for the development and distribution of the documentation which removes the rent charge deed from individual households – it is and remains the responsibility of Cranbrook Limited.

The Town Council will continue chasing this matter on a regular basis.”

“Estate rent charges” – another warning on new-builds such as those in Cranbrook

https://www.theguardian.com/money/2018/jun/25/footballer-zeli-ismail-rentcharge

Already covered by Owl as regards Cranbrook here:
https://eastdevonwatch.org/2018/01/12/cranbrook-herald-reports-on-estate-rent-charges/

and what had to be done here:
https://eastdevonwatch.org/2018/01/26/cranbrook-estate-rent-charges-to-be-transferred-to-council-tax/

Tonight’s Countryfile: how to rewild a disused quarry – one for Clibton Devon Estates to watch?

“Ellie and Matt are in Cambridgeshire where Matt is looking at a huge project to turn a quarry into the UK’s biggest reed bed. Thousands of tons of sand and gravel are being shifted at Ouse Fen to create the perfect habitat for wildlife.”

BBC1 18.30 hrs

Cranbrook Herald reports on estate rent charges

Owl broke this story on 2January:
https://eastdevonwatch.org/2018/01/02/cranbrook-residents-very-unhappy-about-estate-rent-charge-bills/

Now Cranbrook Herald has taken it up:

“The unexpected demand for payment caused uproar on social media, distressing many during the festive break.

One resident said the company which sent the letter was using ‘scare-mongering tactics’.

Another said the matter was a ‘disgrace’.

The estate and asset management company Blenheims sent the bill on behalf of the Cranbrook Consortium and FPCR (which provides the town’s landscape and horicultural services).

In the letter – delivered to all Cranbrook households on Friday, December 22 – Blenheims explained that the annual Estate Rent Charge (ERC), which meets the cost of maintaining the public open spaces and amenity areas had been reviewed.

Previously set at £150 per annum – based on an ‘historic and initial assessment of the annual costs’ – the Consortium had increased the ERC to £231.76, to reflect actual accounting figures. These suggested that the total costs of the 2017-18 ERC were £370,816. Split between 1,600 properties, this came to £231.76 per household.

In many cases, the £231.76 demand was reduced to £194.26, taking into account an initial quarterly ERC instalment paid by residents of £37.50.

The letter implied that the £194.26 needed to be paid in one sum. There was also confusion about when the money needed to be paid, with some residents believing it had to be within 10 working days.

There was no suggestion of being able to pay in instalments (although Blenheims has since said that there are three payment dates – January 22, February 1 and March 1).

Having received their bills, Cranbrook residents found Blenheims had shut for Christmas, and initially there was no one available to discuss the issue.

At the request of Cranbrook Town Council (CTC), the Reverend Lythan Nevard – Cranbrook’s minister and a Belonging to Cranbrook Facebook moderator – offered advice for residents, posting her thoughts on social media.

On January 2, CTC posted its own advice on its website, describing the timing of the letter as ‘unfortunate’, and Blenheims has since issued a ‘frequently asked questions’ (FAQ) document.

“I think the timing of the Blenheims’ letter was poor at best,” said a Cranbrook resident, who did not wish to be named. “Some people were concerned that if they just cancelled their direct debits, they would end up with bailiffs at their door after Christmas.”

“It was a disgrace to receive a letter demanding payment of £231.76 within ten days, and especially at this time of the year,” said another resident.

In its FAQ to residents, Blenheims said the payment demand was issued on December 22 in advance of the next collection date, December 25, and was ‘in accordance’ with residents’ ERC deed.

It also issued advice for those that had cancelled their direct debit or hadn’t returned their mandate and explained why the ERC was being increased and why residents – who are already paying council tax – were being charged for ERC.

Neither Blenheims nor the Consortium have provided the Herald with further comment on this matter.

CTC is currently finalising details of taking over the town’s ERC. If draft agreements are approved, from April 6, 2018, the ERC will be paid as part of EDDC’s council tax, with any increase in the element of the council tax payable to CTC.”

http://www.cranbrookherald.com/news/cranbrook-estate-rent-charge-1-5349929

Cranbrook estate rent charges 2

(See post below also)

From a correspondent:

Wain Homes (55 properties) and Cavanna Homes (19 properties) have their own Estate Rent Charge which will remain in place but they will pay the higher CTC precept

The Town Council had indicated a willingness in principle to take on the public open space on both sites. Wain Homes remain subject to enforcement because of failure to complete the public open space and we met with them in the summer of 2017 to discuss this.

If they complete the work CTC could adopt the public open space. Hopefully local residents on the site will press Wain Homes to do this.

Cavanna have passed their public open space to a management company but undertook to have talks to have the public open space transferred back so that CTC could adopt it. In both cases the ball is in the developers’ court.”

Cranbrook residents very unhappy about estate rent charge bills

Basically a total mess with large annual bills hitting residents just before Christmas. Many residents dispute work and charges.

And this is interesting:

Double charging because residents pay the full East Devon District Council council tax

EDDC has consistently taken the line that it will not take on responsibility for anything other than its statutory responsibilities and this is not unique to Cranbrook but affecting all other new major developments.
On the face of it this is unfair – Cranbrook residents contribute to all public open space owned by EDDC but the reverse is not the case.

This is why the Town Council is seeking to take on these responsibilities to provide best value for residents of the Town.

It is for EDDC to respond to this point.”

https://www.cranbrooktowncouncil.gov.uk/town-councils-response-statement-re-estate-rent-charge-letters

Another new-build developer scam

Estate rent charges apply in Cranbrook:

Thousands of homeowners on private estates are facing unregulated and uncapped maintenance fees, amid allegations that developers have created a cash cow from charging for communal areas not maintained by the council.

Management contracts for “unadopted” private estates are frequently sold off to speculators and property management companies in the same way as freeholds and ground rents – leaving homeowners with spiralling fees and nowhere to turn.

If a new-build estate is “unadopted” it means communal areas such as roads, grass verges, pavements and playgrounds are retained by the developer. The developer then usually sub-contracts day-to-day management.

These companies then pass on the costs to homeowners (both freeholders and leaseholders) via a deed of transfer which obliges the homeowner, under the Law of Property Act 1925, to pay for maintenance of this land. This is often referred to as an “estate charge” or “service charge”. These are on top of full council tax – even though the council doesn’t maintain their street.

Critics say the system is open to abuse because management companies have no obligation to keep costs down or provide evidence the services they charge for are being carried out. Buyers may find the bills spiral as soon as a management contract is sold on.

Lynn Myers bought her two-bed leasehold house in Penrith, Cumbria, from developers Persimmon in September 2016. The sales agent told her the estate would be managed by Carleton Meadows Management Company with an estate charge of £100 a year per household for grass cutting.

When Gateway Property Management took over in July 2017 it tripled the fee to £308 a year – that’s £17,000 from the 55 residents. Myers alleges that the fee includes more than £3,000 “postage”.

“I am on a lower-end income and ploughed my late husband’s insurance money into this property,” says Myers. “I worry that I will be unable to afford this on top of full council tax etc, and also I will be unable to sell. I have been mis-led by Persimmon and the government.”

Persimmon says the initial costs had been miscalculated and that it was working with Gateway to resolve the issue.

Meanwhile, 40 miles away across the Lake District, residents in Church Meadows in Great Broughton are in a similar situation. Richard Elsworth moved into his Persimmon-built freehold property in May 2013. The estate’s 58 residents each pay Gateway a service charge of £125.53 a year, amounting to £7,281 to maintain about 600 square metres of grass.

But Gateway’s charges don’t stop there. When Elsworth’s neighbours sold their home, they were charged £360 for a “management pack” for the buyer, plus £144 for a deed of covenant.

“The only part of the pack that is relevant to the sale is a financial statement so that the service charge information is available to the prospective buyer. As the properties are freehold, Gateway has no responsibility whatsoever for the conveyancing process, other than to receive a deed of covenant from the conveyancing solicitors,” says Elsworth.

Gateway claims it provided an “often exhaustive” amount of information to purchasers’ solicitors when a sale takes place. It said it was common practice for managing agents to charge fees for sales packs and additional legal documentation. It says: “The information we are asked to provide varies from development to development and this is reflected in the amount we charge ranging from £150-£300 plus VAT.

“It is best-practice for the information to be prepared by professionally qualified staff because purchasers are reliant on information being accurate to enable the sale to proceed as smoothly as possible. Typically, a sales pack contains in excess of 25 pages and is tailored to the development.”

Privates estates were debated in parliament earlier this month. Kelly Tolhurst, Conservative MP for Rochester and Strood in Kent, told MPs how homeowners in Hoo bought from Taylor Wimpey and Bellway but are now in dispute with their property management company, SDL Bigwood.

Tolhurst went on to criticise Hyde Housing Association, and London and Quadrant. The latter tried to charge residents at Lodge Hill, Chattenden, for street lamps and street cleaning undertaken by Medway Council.

The Homeowners’ Rights Network (Hornets) is the campaign group fighting for a fairer deal for homeowners on private estates. Its main issue is a lack of a cap on charges and that homeowners don’t have a choice of provider. And, if homeowners have a dispute, there’s no resolution service in place.

Cathy Priestley, spokesperson for Hornets and a freeholder on a private estate, says the private estate model seems to be the norm for new-build estates. “We can only speculate as to why this has happened. The main benefactors are the plc developers who get to keep the estate land, don’t have to prepare it to adoption standards and don’t have to pay for its maintenance or the commuted sums for adoption,” she says. “All councils have to do, under planning, is to ensure there is a long-term sustainable arrangement to maintain the land (under the Town and Country Planning Act). They seem to readily accept assurances from the developers that the management company will deliver this. They don’t appear to have thought about how this affects homeowners.”

While leasehold owners have some (albeit limited) statutory protection, freeholders have very few options. They can take cases to court, but this can be expensive and time consuming. If they decide to simply not pay, they can ultimately lose their home. “Any arrears will normally be recoverable as a debt claim in the county court.

“However, homeowners should be cautious as the rent charge owner may have a number of options including the ability to take possession of the property,” says Adrian McClinton, associate solicitor at Coffin Mew.”

https://www.theguardian.com/money/2017/dec/02/homeowner-freehold-management-fees-unadopted?CMP=Share_iOSApp_Other