Regulation of estate management
There is a growing number of households in England who live on private or mixed-tenure estates where, on completion of a development, they – rather than the local authority – are required to pay for the maintenance of communal areas and facilities. This can include payments for servicing of private roads, external lighting, play areas for children or electric gates. The provision of these services is undertaken either through a private or resident-led Estate Management Company, and the liability for contributions towards maintenance of communal areas and facilities is usually defined in the deed of conveyance or the rentcharge deed.
	Homeowners on these estates have extremely limited rights over the quality of services provided. There is currently no regulatory framework to protect homeowners from excessive costs or poor quality work – and homeowners currently have no statutory rights to challenge their estate management provider when there has been a failure to provide a reasonable service or when an unreasonable charge has been levied. The Government made a public commitment in December 2017 6 to give freeholders who pay charges for the maintenance of communal areas and facilities on a private or mixed-use estate the ability to access equivalent rights as leaseholders to challenge the reasonableness of service charges. It also made a commitment in June 2019 7 to give homeowners on these estates the right to appoint a new manager to manage the provision of services where there is a serious management failure.
	The provisions in the Act seek to give homeowners living on managed estates a number of new rights to make it easier to hold estate management companies to account. This includes the ability to challenge the reasonableness of the charges they pay. It also includes similar rights to leaseholders that are being proposed in the Act around greater transparency of information over their costs and the ability to obtain other information. There is provision for a system of civil penalties, which applies to an estate management provider, who fails to comply with requirements in respect of the provision of information, inspecting of accounts or insurance. The Act also gives homeowners the right to apply to the relevant tribunal for the appointment of a substitute manager to manage the provision of services instead of an estate management company.
	Homeowners on managed estates, like many leaseholders and tenants, are also subject to various administration charges for which they have no control or protection. These may be payable for issues such as variation of the deed of the property, handling requests for information or costs of non-payment of estate management charges. The measures in the Act create a new regulatory framework around administration charges. They require all administration charges to be reasonable and give homeowners the right to challenge the reasonableness of the charges by making an application to the First-tier Tribunal in England (and the Leasehold Valuation Tribunal in Wales). The Act also includes measures to ensure that homeowners are provided with better information about the amount of the administration fee they are liable to pay.