The long term stewardship of community assets is increasing as a feature of new housing developments. It covers not just maintenance and management of assets like green spaces, water bodies, but also structures such as community centres and village halls, allotments, play areas and a range of other matters. However for a long time most developers have adopted a management company approach so that when they finish their schemes residents have to pay for ongoing maintenance through service charges. This can prove expensive and is fraught with risks. This is different to a position where a body such as a Council or local trust takes on these assets with long term funding.
So many issues have arisen in recent years with regard to service charges that this has been highlighted as a key concern in a major report on the housing market by the Competition and Markets Authority (CMA) earlier this year. CMA have identified that a growing trend towards private management of public amenities on housing estates has often come with inadequate protections for consumers and created significant detriment for households over an extended period. The CMA report raises a number of concerns from the perspective of consumers:
(a) Homebuyers may be poorly informed about important details about those arrangements and their long-term implications.
(b) Unadopted amenities may not be constructed to an acceptable quality or may not be maintained to a satisfactory standard by the management company. Homebuyers attempting to resolve issues may face poor levels of customer service. It may also be unclear who is responsible for maintenance.
( c) It is often very difficult for households to switch management companies and, in some cases, there appears to be no feasible way for them to do this.
(d) Bills can be large, with a high proportion relating to administration or management fees, and future bills unpredictable and potentially very high as amenities degrade over time.
The root cause of detriment for such households is the reduction in levels of adoption, meaning that households end up paying for amenities which are used by the public. This has resulted in a proliferation of private management arrangements in which estate management companies may possess significant market power and face limited competitive constraints to deliver services at a reasonable price or to an acceptable level of quality.
In the CMA view, intervention is required to:
(a) address the increasing prevalence of private estate management arrangements and the negative effects this can have;
(b) improve quality and redress routes for consumers;
(c) improve the planning system to counteract the time, expense, and uncertainty associated with negotiating it and the effect this has on the number of planning permissions sought and granted each year.
In fact the last point is one that appears to reinforce the approach that alternatives to ManCos should be explored in the planning process. Whilst it is referred to more often in Local and Neighbourhood Plans the policies need to support measures of stewardship. These are generally applied in proposed Garden Towns but should be picked up wherever their schemes claim to be delivering placemaking credentials. After all, such places do generate higher prices and quicker turnaround of sales, so surely it is in the interest of developers to go down this more beneficial route. CFO can provide advice on the matter as part of our recently launched stewardship service. In the first instance call Stephen McKenna or Tom McCulloch on 01865 x883488 or email [email protected].
