The House of Commons Library has released information on the position of freehold homeowners who pay a charge for the upkeep of shared areas and facilities on their estates.
It can be seen here, and in summary says
What Are Freehold Estate Charges?
Freehold estate charges are fees paid by homeowners on private or mixed-tenure housing estates to cover the maintenance of shared spaces like:
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Roads
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Green spaces
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Play areas
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Drainage systems
These areas are not adopted by the local council, meaning the developer or a management company is responsible for upkeep. Freeholders are legally required to pay for these services, typically through:
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A private management company appointed by the developer, or
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A Residents’ Management Company (RMC) formed by homeowners
These charges are not covered by council tax, and there is no reduction in council tax despite freeholders paying separately for some local services.
Current Rights of Freeholders (Pre-2024 Act)
Until recently, freeholders had limited rights, especially compared to leaseholders. Key limitations included:
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No statutory right to challenge charges or management practices
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No formal mechanism to replace poor-performing management companies
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Limited to complaints via a redress scheme if the agent was a member (e.g. The Property Ombudsman or The Property Redress Scheme)
New Rights Under the Leasehold and Freehold Reform Act 2024
The Leasehold and Freehold Reform Act 2024 (received Royal Assent on 24 May 2024) introduces several important rights for freehold homeowners in England and Wales:
🔹 Tribunal Rights
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Freeholders can now challenge estate charges (including quality and cost of works) via a First-tier Tribunal (Property Chamber in England, Leasehold Valuation Tribunal in Wales)
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They can apply to appoint a substitute manager if the current one is failing
🔹 Transparency & Information
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Freeholders must receive regular, clear information about what charges are for
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There will be improved rules around the breakdown and justification of both estate and administrative charges
🔹 Redress Scheme Membership
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All estate managers (including developers managing directly) must join a government-approved redress scheme, giving homeowners an official route to dispute resolution
⚠️ Note: Most of these new rights will not come into force until secondary legislation is introduced — expected after a 2025 consultation by the Labour government.
Future Reforms (King’s Speech 2024 and CMA Input)
Upcoming Legislation
The Labour government plans to publish a draft Leasehold and Commonhold Reform Bill in late 2025, aimed at:
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Ending the “injustice of fleecehold” charges
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Preventing these arrangements on new estates
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Introducing stricter regulation of property managers (consultation in 2025)
CMA Recommendations (2024)
The Competition and Markets Authority (CMA) found:
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Widespread consumer issues on privately managed estates
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Recommended stronger protections for current residents
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Suggested councils be supported to adopt shared amenities more often
The Labour government supports these aims and will monitor outcomes before taking action on existing private estates.
Devolved Nations
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Wales: The 2024 Act applies; subordinate legislation to follow. Government committed to fair estate charge reform.
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Scotland: Separate factoring laws can allow removal of management companies.
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Northern Ireland: Estate charges are not currently a policy issue.
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