Devon MPs add pressure on property service charges

A pair of Devon MPs have added to pressure on property management companies which charge residents a raft of additional fees for living in their homes.

Residents whose homes or developments are managed by a private company are often struck with so-called property services charges that are non-negotiable and tend to involve increases that critics regard as opaque.

Some also claim the residents are simply being charged a second time for some of the same services, with some MPs claiming such homeowners are, in some cases, effectively paying council tax for the likes of street lighting and verge cutting, but then paying their property management company for the same things.

David Reed (Conservative, Exmouth and Exeter East) and Richard Foord (Liberal Democrat, Honiton & Sidmouth) have both added to a Westminster debate on the issue, publicising the plights of various residents in their respective constituencies.

Mr Reed said the problem of some residents being charged these fees was “rapidly becoming one of the most frequently raised issues” in his constituency.

“The biggest problem is that people who have worked hard, saved responsibly and bought a home in good faith find themselves trapped in a system that is opaque, unaccountable, and, in the worst cases, exploitative,” he told the House of Commons.

“The stories are depressingly consistent: residents describe unexplained charges, unclear billing and long delays in resolving the simplest issues—we have heard many such examples [in this debate],” Mr Reed said.

“Residents send long chains of unanswered emails. They attend my surgeries exhausted and frustrated.

“When my team contacts FirstPort on residents’ behalf, we often wait an unacceptable length of time for a reply, and progress—if it comes at all—is slow.”

He added that his office was dealing with “almost 40 open cases” relating to developments overseen by a company called FirstPort, although the company disputed this by stating it had only four open enquiries with Mr Reed’s office.

It added the firm’s operations director for the south west region had contacted Mr Reed following the debate last week to “discuss our management services within his constituency and any other matters arising that we can assist with”.

FirstPort said it manages more than 200 developments in Devon and that it worked closely with MPs to “resolve customer enquiries and keep them updated on the changes we’re making across our business”.

“This includes continued improvements of our systems, ways of working, and customer service, and making sure our teams have the right skills and qualifications,” a FirstPort spokesperson said.

“Our newly published quarterly service update reinforces our commitment to transparency and accountability.

“Along with our engagement with individual MPs, we are supporting the government by providing evidence and recommendations on how reform of the industry can drive up standards. We recognise there is more to do, and we are committed to driving positive change for our sector.”

Mr Reed said he had previously met FirstPort’s chief executive, and was due to meet the company’s management again with a group of MPs.

“This is neither an isolated concern nor a partisan one,” Mr Reed added. 

“Former ministers have highlighted FirstPort and other companies being consistently associated with high charges and poor service. The BBC has reported homeowners being billed for things such as ‘terrorism insurance’, without any context, while basic ground maintenance is not completed. 

“More than 30 MPs have written jointly to FirstPort demanding action.”

FirstPort said where service issues had been escalated to a formal complaint – known as Stage 1 – it focused on “seeking to address the root cause of an issue and fix it”. 

“In the vast majority of Stage 1 complaints, we complete our investigations and reply to residents within 21 working days,” the spokesperson said.

“If we think it will take longer, we will let the resident know and inform them when we expect to complete our review. Our quarterly service update shows that in quarter 2 of this year,  we received 1.19 complaints per 1,000 homes.”

The spokesperson added that inclusion of terrorism insurance was “common practice” for managed developments and is often a contractual obligation under the lease or through a mortgage provider.

Mr Foord said the Leasehold and Freehold Reform Act provided protection for leaseholders on private managed estates, and so queried whether this should be extended?

“The Act enables them to go to a tribunal to challenge management charges,” he said.

“Does [the minister] think that that ought to exist for freeholders as well?”

Mr Foord raised another related issue that occurs when work by developers or their contractors is either not finished or not completed to a suitable standard.

If the likes of roads or sewer pipes do not meet a certain quality, then councils and water companies, respectively, will not ‘adopt’ those pieces of infrastructure as their own.

That can mean residents being stuck in limbo with unfinished roads or sewer networks that nobody will take responsibility for.

“I have the example of Pebble Beach in Seaton where I represent, where residents have been charged fees and even threatened with legal action before the estate has been handed from the developer to the property management company,” he said. 

A spokesperson for Vistry said: “We are progressing a structured programme of works to complete outstanding items and remedial activities.

“Additionally, we are seeking a new managing agent to ensure residents receive the best service and value, and some residents have been invited to participate in the selection process.”

It’s understood that the current managing agent has issued legal letters to some residents, but that the company has been asked to pause such action while a review is undertaken.