Starting to grapple with fleecehold

The online drum beats and log-rolling have started for grappling with "fleecehold" in the UK. In the House of Commons, there is also a private member's bill on foot.

Fleecehold is essentially a private estate where freehold homeowners must pay for the maintenance of land they do not own, similar to Home Owners Association's in the United States, but less democratic. In the UK, debate about the issue has been inhibited by the phenomenon's parallels with leasehold, the considerable diversity of the arrangements found in practice, and the dysfunctionality of discussion of the issue due to Facebook-based campaign groups.

The arguments advanced by some activists are quite extreme and sound to the uninitiated observed like a straw man invented by opponents. Despite a dozen or so attempts at civil and polite engagement, it has not been possible to get HORNets' Facebook admins to engage with the issues or clarify their position of "Adopt the Lot" beyond "Maybe don't adopt everything but we refuse to discuss literally any detail of what should or should not be adopted"

Recently, anti-fleecehold activists have also surfaced on Twitter, and are sounding a lot more reasonable than their Facebook counterparts:

What are the actual issues?

The real issues are along the following lines:

• there are disproportionate penalties for late payment of estate rentcharges
• unlike variable service charges under a lease, there is no requirement that estate rentcharges be reasonable, be reasonably incurred, etc, nor any equivalent right to take over the management of common areas
• some of the land under management is accessible to the public
• the public may acquire rights of way over some of the common land by prescription
• the management of the estate common parts is monopolistic in theory or in practice

What do campaigners say are the actual issues?

I'm a campaigner on this myself. But there is also a long-standing Facebook group with a couple of thousand subscribers, called HORNets. Its administrators refer to this group as a "campaign" and hold themselves out as representing the subscribers.

Roughtly speaking, they say:

• property that isn't owned by a single household should be managed by local government
• quoting directly: "these charges fund the upkeep of spaces that are used by everyone but only paid for by those living on the estate"
• that there is dual management of some shared property
• it's double taxation
• that "freehold" means, or should mean "free of hold" and that this is therefore somehow a misselling issue
• that estate charges should be regulated or "capped"

More concerningly, some go so far as to claim that any piece of land which serves multiple freehold dwellings should be owned and managed by local government, including driveways, gardens and car parks. Needless to say, this is not going to assort well with the government's plans for widespread adoption of commonhold.

Management companies vs managing agents

There's also a prevalent misconception about how management companies work in the HORNets group. When I was still subscribing to the group, I initiated a discussion, facilitated by a shared Google Doc, about how people understood the term "embedded management company".

There was a lot of difficulty disentangling the concept of a management company (limited to a particular site and comprising its residents) from a managing agent (a commercial property management firm) and further from a company which could not be sacked or whose directors could not be sacked. The concept of an "embedded management company" turns out to be incoherent - on any sensible definition, a company can stop being one, and management companies that are not "embedded" can still be exploitative.

I've had a stab at trying to write up these problems, but am still a long

What is the problem with blanket adoption by local government?

The problems decompose into two types:

• identifying which land ought not to be privately managed (this is what HORNets point blank refuses to do)
• how to change the ownership and management arrangements for that land

A big factor in the "adopt the lot" mentality is that it results from attempting to apply a ideology to a problem that isn't fully understood. Adopt-the-lotters tend not to have seen private estates that have lots of land that should never be adopted. It's as simple as that, and some of them admit as much. In the low-stakes world of online UK housing debate, there's nothing to be lost by a purblind refusal to reconsider one's premises.

In passing, we should note that the a lot of the psychological fuel for "Adopt the Lot" is purely reactionary: this wasn't how we used to do things, so let's turn back the clock to a more agreeable point in history. No consideration whatsoever of the merits of the former dispensation.

Identifying which land ought not to be privately managed

Here are some examples of communally managed land from private estates:

• gardens
• car parks
• playgrounds
• footpaths
• roads
• drainage systems
• fences

Some of these clearly should be adopted by local government or the utility companies, e.g.:

• playgrounds
• drainage systems
• most roads

However, there's nothing wrong with a situation where each house gets to own its own bit of road. I've lived on private roads most of my adult life, and there's a section of road near where I live which was intended never to be adopted by the highways authority; the local homeowners had to pay a premium for it.

Most private estates will only have a subset of these various types of potentially adoptable common land. Some of them, particularly car parks and gardens, will be subject to rights-of-use by local freeholders and leaseholders. Some will even be subject to statutory rights to buy or to manage, by local leaseholders.

It is completely disingenuous to carry on as though every private estate exclusively comprised adoptable common land, at least when it's been pointed out that this isn't true.

Let's take the case of car parks:

My car park has twenty spaces, and a shared surface which is mostly paved but contains some patches of garden. Eight of the spaces are owned freehold with nearby houses, subject to a non-alienation covenant requiring that the car park not be sold separately from the house. The other twelve spaces are subject to leases of flats in a nearby block. All the freeholders and leaseholders have the right to use the common parts of the car park in various ways. No-one else does, except for rights of way. It would also be possible to redevelop the car park and put a block of flats above the leased part of it or the nearby garden.

If such a car park were adopted by the local authority, we'd face one of the following situations:

• the people who paid for the car parking spaces might have to share them, or share the common part of the car park, with others, or
• council tax payers would end up paying to maintain a car park they have no right to use

Also, leaseholders wanting to buy the car park when buying their block of flats might have to compensate the car park owner for lost development value, but it's not clear from HORNets proposal whether a local council would have to do the same. Similarly, it's not clear in the case where the car park is effecively nationalised, whether those whe lost their exclusive right to a car parking space would be compensated for it.

I think the theory is supposed to be that "public" amenities should be adopted, but this is sleight of hand, running together "accessible by the public" with "owned by a public body". Further, "accessible" covers "accessible in fact", in the sense that one can just go onto the land, with "accessible as a matter of law", in the sense of being able to go onto the land without being a trespasser.

What we can't have is a situation where this is determined by factual accessibility or the state of the surface of the land, e.g., grassy. If land were to be subject to "adopt the lot" because it wasn't fenced off, people would either build fences or kick them down. And indeed, people will kick and drive their way through fences and hedges to get where they want to go. It can't seriously be the case that this activity should change whether a garden or car park should be maintainable by the taxpayer.

It's no good saying "oh we didn't mean car parks" if one won't engage in discussion on what one *did* mean.

Gardens are similar to car parks: a shared garden will be subject to rights of use by nearby households, and not by the general public. It's very unclear why taxpayers should be charged for someone's gardening.

This all tends to show that some of these "public" amenities aren't really public. They're not owned by the public, the public has no right to use them, they're just accessible by the subset of the public willing to trespass on land that hasn't been fenced off.

Staying with this gardening example: the supposedly free-market party, the Conservatives, legislated in 2024 to allow homeowners on fleecehold estates to sack their gardener if they could prove fault in court. On the left, there are even calls for a *regulator* of estate management services such as gardening (OfLawnmower?). Why not just give homeowners a choice of gardener like any normal economic relationship?

How to change the ownership and management arrangements

Moving on from "which pieces of land are we talking about here?" ... to the extent that both sides in the debate are talking ... we must consider the actual ownership and management arrangements. There are a couple of common patterns, including the following, when freehold homeowners have an obligation in their title deeds to pay a particular company for maintenance:

• the company is a general business that manages property up and down the country
• the company's activities are limited to the estate in question, and it is controlled by homeowners on the estate (who might hire a company in the general property management business mentioned immediately above to actually do the job)
• the company's activities and/or membership are limited to the estate in question, but it is not controlled by homeowners, but by some for-profit entity

The first of these setups is a disaster. The second is not exploitative, however much it may offend ideologues in *theory*. The third is unstable: it behaves like the first setup until it doesn't. The change comes either because the developer hands over the site voluntarily, or is forced to politically.

It seems that the prevalence of the third option was significantly underestimated by the experts. See my research on it here:

Actually banning the second of these scenarios, where it's effectively a private mutual or co-op, is extreme, yet that is in effect what is being proposed. It is also very difficult to reconcile with the ECHR right to freedom of association. If a small group of landowners wants to pay for the maintenance of some land collectively, is it really proper to prevent them by law?

Bear in mind also that estates can have blocks of flats, and leasehold houses, so not all homeowners here are freeholders, nor are all of them owners of houses. Flats naturally have a structural, physical dependency on other homes. Houses don't necessarily have this, but it can still damage the value of a house if the amenities nearby are in a poor state. Any of these management companies could also comprise leaseholders and Shared Owners. Depriving some companies of some of their revenue may make them financially unviable, further complicating collective property management even inside blocks of flats.

There are a couple of other complications forcible adoption throws up:

• a council can't be landlord of a block of flats that has Right To Manage; council ownership of part of the block's common parts could collapse the RTM company and put an exploitative foreign investment firm back in charge
• the common parts on an estate are a basis for enforcing covenants, not just the covenant to pay the estate charge, but also the covenants against Anti-Social Behaviour, disrepair, etc. Transferring these common parts to the council may compromise the enforceability of such covenants.
• there's no reason to think that councils do better than for-profit firms maintaining land. My own estate has various patches of open space and some of the privately maintained ones are better than the council-maintained, others worse. Outrageously, there is a covenant between the council and the developer allowing the council to degrade its standard of maintenance after the developer has had twelve years to sell the houses.
• unlike roads, other estate common parts are not subject to measures to protect homeowners from the bankruptcy of a developer part-way through the build-out of a development; there therefore cannot be any guarantee that foisting all common estate land onto a council isn't going to wreck the council's finances due to the burden of maintaining land that has not been made up to an appropriate standard (nor even *is* there such a standard, given the absence of this proposed mandatory adoption policy)

In Ireland, since 2011, there's been a regime of mandatory transfer of common parts to Owners Management Corporations, and estate common land that has been designated for future maintenance at public expense can be forced onto local councils by residents. Such a mechanism only exists in the UK in relation to roads, not estate common parts more generally.

Conclusion

"Adopt The Lot" is a slogan, not a policy. It is ideologically-driven, by people who simply do not care about the details or consequences.

It is extreme, unjust and runs against the human rights (to property and freedom of association) of countless individuals.

As I've stated a few times, I suspect some of it is motivated ideologically: an objection a priori to co-operation between private citizens: no-one should be allowed to co-operate with other households unless it is for profit (as a shareholder or partner) or if it is with the blessing of government. It was only in 1901 that France even legalised non-profit associations, and this radical anti-communitarian instinct runs deep in other countries too.

There's also an element of oikophobia: some proponents of indiscriminate estate adoption openly admit they would rather be governed by the remote council than their neighbours, who, admittedly, are total idiots. Idiots they may be, but they are the ones who bear the costs and obtain the benefits of the proper management of communal land.

This is a subject to which I shall have to return. I'll turn this post into a permanent page elsewhere on my site, and keep updating it.