NGP Estate "Service" Charge

We don't know how many of you know about estate service charges, some will if they have bought on a new build estate in the past. There does seem to be a fair amount of misunderstanding about it, so we have put together this article, which we hope will prove useful.
 
Newcastle Great Park is a privately owned estate. The owners are the developers AKA the consortium formed by Taylor Wimpey and Persimmon. They have not offered the estate up for adoption by the council apart from some roads and sewers. The council have agreed with them that they could set up a management company to maintain the estate in their agreements under section 106 of the Town and Country Planning Act. Much of the estate land is designated as public open space, so residents do not have exclusive benefit. Residents pay full council tax.
 
The management companies are all owned 50:50 by Taylor Wimpey and Persimmon, and all have the same two directors, one from each company. They have in the past employed their infrastructure Project Manager as their “agent”, although we are not sure who the current agent is (we have asked and await a response). They do now employ an officer part time to run the management companies, Susan Cargill, a former planning officer.
 
Each development cell has its own company, a subsidiary of NGP Estates. Your relationship with the estate management company is in your TP1 transfer deed if you bought freehold, or your lease agreement if you are a leaseholder. These documents, once signed, bind you to pay the estate charges whatever costs have been incurred. You have a right to see the costs by requesting to visit the accountants data room, but currently no right in law to challenge them.
 
The management companies are not accountable to you for how they provide the maintenance services or run the company because property law (Law of Property Act 1925) is the legal basis for the arrangements, not consumer law. You can check what the consortium have to say about the charges on their web site here. This document does explain the banding (larger properties pay more) and how the charges for strategic (big green areas) and local (areas around the homes) open spaces are apportioned. It was first published in 2017, we think in response to numerous past queries from individuals and RAs. Whilst it clearly lays down the rules, there is no mention of a dispute resolution or complaints procedure.
 
If you have a query, and you do need to check that your bill is correct as there have been numerous examples of inaccuracy, then you need to raise it using this form.
You can also use the form to ask to pay by instalments (recommended).
 
If you simply want to pay, then use this link or set up a BACS payment.
 
We are aware of debate on social media about with holding charges and have discussed what we should say to residents about the situation – this is our statement:
As a constituted body, GPNA is unable to endorse calls to with hold the estate service charge because we believe there is no legal basis to do so. It  may also expose residents to risk, both in the courts and due to the right of re-entry by the rent charge owner. However, should residents as a group wish to mount a legal challenge under more recent laws designed to protect consumers, GPNA would actively support this.  
The bottom line is that under current legislation you are obliged to pay the estate charge no matter how the costs have been incurred or how the company is run.
 
That's the BAD news. There is however some GOOD news:
1) The builders keep the charges low until all the houses are sold – we know this from other estates across the UK. A long time for the Great Park!!
2) The government has committed to allowing estate charges to be challenged in the First Tier Lands Tribunal. This is a low cost way a group of people can challenge the charge, previously only open to leasehold service charges. The government have not yet enacted this, but there is a pilot scheme ongoing and considerable national pressure from home owners to implement this very basic right. It is only a matter of time.
3) The national campaign group Home Owners Rights Network is working with lawyers to develop a model for crowd funded group action challenging mainly but not exclusively the monopoly aspect of the private estate model. They are looking for suitable cases right now. NGP could very well fit the bill!
 
Why would we lead an action? Well, like many individual, the RAs have asked questions which remain unanswered over the past 5 years, and we have reached the point where we have no confidence that they will be answered without recourse to the law. There is no clarity over the handover process and the accounts which have been viewed show no consistency or accuracy of cost allocation to the various cells. Headings are vague and and requests to explain in more detail have been ignored.
 
We believe many residents would support group action - please let us know by commenting on FaceBook or email us via our contact form.