Management fees scandal - ‘We pay for maintenance and get nothing’
THOUSANDS of residents across Stratford district may have wrongly paid out millions of pounds in maintenance fees.
One example is Wellesbourne, where it’s believed owners and tenants in more than 600 homes across three housing developments should not have been charged hundreds of pounds a year for the cost of maintaining public, open spaces near their homes.
Just for those, the fees paid over seven years add up to a massive £870,000.
Taken across the whole district, the total could run into millions of pounds wrongfully charged, and paid to private companies.
The issue is serious enough to have prompted a motion, due to go through at a Stratford District Council meeting on Monday (14th April).
This will start to throw some light onto how many people across the district are trapped by these types of contracts with private companies.
Proposed by Cllr George Cowcher and seconded by Cllr Anne Parry, the motion says the council ‘recognises the problems that exist on estates where ownership and management of public land and amenities is vested on private companies with residents subjected to an annual charge on their homes for the maintenance of such land and amenities’.
Cllr Cowcher, deputy leader of Stratford District Council, has previously told the Herald that the ruling Lib Dems do not want management companies involved in new estates “because they’re just a total, utter nightmare and we have very little control”.
“It won’t happen again, because the council now has a policy on all new sites that we will not be involving management companies,” he said.
However, there are plenty of residents who are already trapped into paying maintenance charges to private companies – even when an agreement looks to have placed that burden on the housing developer.
Resident Brian Nicholls, a former police officer who lives on the Mountford Place development in Wellesbourne, has been investigating what he describes as “an absolute scandal”, for six years.
He found that owners and tenants in the 365 homes that make up The Grange, and 175 homes of the Ettington Park estates have similar section 106 agreements – meaning they’ve also been forced to pay hundreds of thousands of pounds they did not owe.
Brian bought his house on Mountford Place, which includes 80 homes, five years ago. Although the original leasehold purchase contract was with Persimmon, the house builder appointed a management company, Greenbelt, to look after the maintenance of the communal spaces including grassed areas and the playground.
Brian said: “This meant Greenbelt could basically charge what they wanted.”
As well as an annual standard maintenance fee, Greenbelt also charges for ‘extras’, such as litter picking and the cost of repairing or replacing damaged equipment on the communal children’s play area.
Brian said: “I thought that was a bit unfair, so I started doing a bit of digging.”
Brian studied the section 106 agreement, the legal contract between SDC and Mountford Place developer, Persimmon.
He said to his astonishment, it states that the developer is responsible for the cost of public, open space maintenance on the estate for the first seven years.
That would still apply, even if it is later passed on to third party, such as Greenbelt.
Brian explained: “I found the clause that says the developer shall pay the management company a payment to fund the maintenance for a period of seven years. I started to ask: ‘If the developer, which was Persimmon, signed a legally binding contract covenant with the council to say they’ll pay maintenance costs for the first seven years, how come we’re paying?’
Brian, who’s been battling since March 2019, claimed Stratford District Council (SDC) and Persimmon ‘closed ranks’ and said the section 106 doesn’t say what they think it says.
Brian added: “They [SDC] wrote the section 106 agreement together with Persimmon, agreed it, signed it and sealed it with the official seals. If we’ve got it wrong and this clear wording that says the developer pays the first seven years maintenance fees, doesn’t mean that they have to pay the first seven years – what does it mean?
“And if it doesn’t mean what it says, why write it into the section 106 agreement?”
Mr Nicholls, who has also lobbied his MP, Sir Jeremy Wright, added: “They use the excuse that they don’t have the manpower to monitor the section 106 agreements they sign. Why sign the section 106 agreements, if there’s no intention of ensuring they are complied with?”
He continued: “I believe there are hundreds, if not thousands, of people in this district who’ve been forced by leasehold and freehold contracts, to pay money they should never have paid.”
Despite a blanket denial for the past five years that there has been any overcharging, homeowners in Mountford Place, including Brian, have been refunded maintenance fees they’d paid for the past seven years.
Brian believes others in a similar situation also deserve the same treatment – and refunds.
He added: “If we’re wrong, why did they pay us our money back?”
Margaret Ferguson lives in Joseph Arch Road on Wellesbourne’s Ettington Park estate, which includes around 80 homes.
Margaret, who is retired, was one of the first people to move to the development 10 years ago.
For the past seven years, she’s received maintenance bills from Greenbelt Group Ltd – the most recent bill covering April 1st 2023 to March 31st 2024 was for £239.21.
She said: “Half the year there’s nothing to do on these estates, and especially where I am. I’m paying this, and I see nothing. I end up cutting my own grass verge here, but I’m paying for this maintenance but see nothing.
“A lot of my neighbours on this street are the same – we only have grass verges.
“They charge you for any planting that needs to be done but anything they put in, they don’t maintain – they put in plants, but they don’t water them.
“They don’t do anything – I maintain this organisation are not really gardeners.”
If it turns out she has been paying when she need not have done, Mrs Ferguson said she would be “more than annoyed”.
She added: “I hate handing over the money each year anyway.”
“When I bought this house, I asked what’s the highest amount it’s ever going to be? and they told me, ‘It will never, ever go past £200’.”
The motion at Monday’s SDC meeting, once proposed and seconded, will be referred to the cabinet for consideration and report without debate.
A separate motion, proposed by Cllrs Dave Pemberton and Susan Juned, also before the council meeting next week, highlights private management companies operating public open spaces.
It describes the ‘practice of developers using private management companies to operate and maintain public assets while levying uncontrolled and increasing charges has not delivered good outcomes for residents in terms of high-quality public amenities.
‘At the same time increasing charges have reached the point of unaffordability for many people.’
The motion calls on the council to set up a group under the overview and scrutiny committee, to look into the issue and report back with recommendations within three months.
The Herald has approached Stratford District Council, Persimmon and Greenbelt for comment.
