As a new MP, I realised I would be dealing with some issues that are only relevant to my constituency, and others that were more widespread. But when I reached out to my colleagues about residential estate management companies, I was taken aback by the response I received.
Clearly, the challenges my constituents in South Devon face – such as excessive charges, poor services and intimidatory practices – are happening across the country. It is because of this I fear these companies represent the next great scandal of our time.
In fact, I see striking parallels with another corporate scandal we are all unfortunately very familiar with: the water industry. Much like rogue water firms like South West Water, these management companies are focused solely on profit and are ignoring their responsibilities to residents.
Often, they are owned by a shadowy collection of overseas investors and eat up smaller players in the UK market so they can build up their wealth and size, and ride roughshod over anyone who questions their methods or legitimately asks where their money has gone.
Whichever way you look at it – housing association tenant, private tenant, owner occupier, retiree, living in a house or a flat – residents are being routinely ignored, dismissed, intimidated, and frankly fleeced by management companies that are not subject to any kind of regulation.
Service charges are a clear example of this. At Camomile Lawn, a housing development in South Devon, residents were told that the annual contribution to a reserve fund had been increased from £2,000 to £8,000 a year – a 265% rise! Service charges also went up by 23% based on a 10-year plan that wasn’t shared with residents. While accounting costs rose by 55%, again with no explanation.
This is not an isolated incident. I recently led a Westminster Hall debate on this issue, where MPs from across the country came forward with examples of uncommunicative management companies who refuse to engage constructively with their residents or explain their financial decisions. During the debate, I asked the housing minister if the government will bring forward legislation to allow residents to challenge management charges.
It’s important to stress though this issue isn’t about money. People often invest their life’s savings into buying a home that is sold as offering ‘peace of mind’. The reality they face is anything but.
Beyond excessive service charges, residents face shoddy workmanship, broken lifts, flooded car parks, leaking ceilings, and more. And when it comes time to sell, the issues persist.
I’ve heard stories of management companies not responding to solicitors’ requests, and sellers being charged thousands of pounds for management packs needed for selling, which take months to arrive. Buyers pull out, prices fall and sales become all but impossible.
I raised many of these issues during a meeting with FirstPort, one of the largest property managers in the UK. Interestingly, Labour and Conservative MPs have also held meetings with the company’s MD Martin King.
The number of invitations he has had to parliament in just six months reflects the desperation of so many constituents who’ve exhausted all other avenues to raise complaints with FirstPort.
It’s extremely disappointing that since our meeting – where great things were promised – the only response we’ve received from the South West regional operations director for the company has been one automatic email reply. It’s just not good enough.
It’s more than obvious these companies are behaving badly and letting people down. Their raison d’être is quite clearly not acting in the best interests of their residents. It is way past time that management companies were required to act responsibly and treat their residents with respect. The government has signalled an interest in acting here, although the minister understandably said how tricky the legislation would be to get right. Let’s hope they are working hard to find ways to bring these companies to heel.
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