Compulsory purchase option on the table in battle against ‘fleecehold’ management companies in Milton Keynes

Compulsory purchase of land is the nuclear option in a range of action that the council could take to stop residents being ripped off by management company fees.

By David Tooley, local democracy reporter
Friday, 3rd April 2020, 5:00 pm

So-called “fleecehold” arrangements are when developers create companies which charge leaseholders and freeholders for maintaining amenity land.

Milton Keynes Council’s cabinet is to be presented with annual reports about developers or management companies where there have been complaints about them exploiting residents.

A report to council leader Pete Marland said the cabinet could consider the evidence on a case-by-case basis, including whether the use of compulsory purchase would be an appropriate course of action.

Milton Keynes from the air

But such severe action could take up to 18 months and cost taxpayers around £100,000 in legal fees for each location, the report read.

The compulsory purchase option is just one of a range being considered by the council.

Taking action was not only a manifesto commitment by the ruling Labour group, but it was also backed by the full council last year.

But Cllr Marland (Lab, Wolverton) was told that the main thrust of the council’s response to the issue would be through the planning system.

Signing off the council’s approach to the issue at a meeting on March 24, Cllr Marland emphasised that it was a hugely complex issue.

“It’s very difficult to do in law because, obviously, the point about land is that it is owned by the people who own it,” he said.

“And if a company wishes to set up an asset management company and hold that land then it’s actually up to the house owner whether they buy the property or not.

But he added that “we are looking at ways to rationalise this.”

He told the meeting that a lot of the management companies end up being based outside of the UK, where it isn’t possible to find out who the directors are.

In some instances, Cllr Marland said it comes to a point where people are “paying for a service they never receive, and the council ends up doing it. So we are looking at ways of making that less of a thing.”

Council officers believe the best outcome is found through negotiation early in the planning stage.

In cases where the council or the Milton Keynes Development Partnership owns the land, it wants to see open spaces transferred to the Parks Trust, or town and parish councils.

The report says: “The council can encourage this model, through early engagement with developers, joint working with the Parks Trust and town and parish councils, and citing good practice.

“The council planning and landscape teams are already working together to move developers to consider the sustainable long-term maintenance of open spaces as part of their development proposals,” it adds.

Even though there are difficulties, council officers believe that doing nothing would see some residents having fair deals and others being exploited.

Planners are also looking at beefing up the local plan to better deal with open space and recreation areas.