R4 You and Yours today had a section on growing opposition to freehold estate charges.
Developers will be well advised to review their approach to covenants and estate charges. There are a number of things that can be done to mitigate the issue from having a sensibly balanced set of restrictions, to ensuring that any estate management is justified through a management policy and administered in a fair and accountable way. Where covenants are imposed to protect plot disposals developers might also want to consider time limitations.
With proper safeguards and appropriate management any estate covenants are more likely to be acceptable to plot purchasers and enforceable before the courts.
The National Leasehold Campaign, which has thousands of members on Facebook who are victims of spiralling ground rents, said it was concerned that developers would switch from leasehold to “fleecehold”. Jo Darbyshire of the campaign group said: “In anticipation of the outcome of the government’s consultation on leasehold reform big developers are now advertising homes as ’freehold’ but further examination shows that they sell the houses and land in two separate transactions with the transfer of the land containing exactly the same permission fees as the leases used to (eg charges to make home alterations, change mortgage lender, etc). We’ve termed this ’fleecehold’. “Those of us trapped in this leasehold nightmare and going through the enfranchisement process are finding that freeholders are refusing to remove permission fees as part of that process.”