Government urged to end ‘fleecehold’ abuse

MPs are calling for an end to “leasehold-like terms” being foisted on owners of freehold new-build homes in a practice dubbed ‘fleecehold.’

The term ‘fleecehold’ has attracted two similar meanings from separate campaign groups, both of which activists want to see tackled.

The National Leasehold Campaign highlights the issue of ‘fleecehold’ where a home owner buys the lease of a property but restrictive terms such as fees for property alterations are kept in.

The Home Owners Rights Network has also adopted the term to mean where new-build homes are sold as freehold but owners are still charged unfair fees for communal areas on the estate.

Mary Glindon, Labour MP for North Tyneside, has launched an Early Day Motion (EDM) in Parliament highlighting estate management charges that are hitting freeholders who may mistakenly believe play areas or grass verges on their development are council-owned.

It comes as the Government is already looking at reforming leaseholds, but now there are warnings that even those with a freehold on new-build properties are facing restrictions and high charges from the company managing the whole estate development.

Similar to leaseholds, the management contract of an estate can be sold and then there is no limit on what can be charged for maintaining communal areas or extending on the land.

The EDM says: “This House is deeply concerned that new-build houses are sold as freehold but have leasehold terms, also known as fleecehold, attached in the form of charges, including restrictive covenants on the need to apply for permission and pay a charge for any alterations and extensions, changes that fall outside the ambit of planning permissions and the sale of property.”

The MPs note that this affects thousands of owners of new-build houses and “believes that this undermines the definition of freehold as permanent and absolute tenure of land or property with freedom to dispose of it at will”.

The EDM urges the Government to investigate this practice with a view to first clarifying the law and then putting bans in place.

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One Comment

  1. Will

    Whilst dealing with such items they should also look at excessive insurance premiums where freeholders do not have to prove their charges are reasonable and sometimes add on excessive commissions. It is time commissions are limited to a sensible level. Where agents may have to be transparent freeholders do not have to meet the same standards, as I understand it.

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