You will recall that directors have been investigating site-wide costs for the last 2 years and neither DJC nor POD acting as managing agents were able to provide sufficient assurance as to what we were actually paying for given that only circa 20% of site-wide land was available for use.
We have advised all parties involved on many occasions during the last 2 years that we would only pay for site-wide land we had access to and only where we were confident that expenditure was valid and appropriate. Without such information being made available, we took the decision to withhold monies and credit residents last autumn based on a proposal put forward to the site-wide management company via POD last year.
PG Property Management (who took over from POD Management and now support the site-wide management company) proposed a way forward in February 2021 which directors agreed to in principle on the understanding full sets of reinstated accounts for the last 4 years were made available for us to inspect. The site-wide contributions that form the 2021/22 Service Charge presented at the EGM in May support this proposal.
Unfortunately we have not been furnished with re-stated accounts and as we are obliged to look after the interests of CCMC members, we are standing firm in that we will not pay any further monies owing until the accounts (together with supporting information and invoices where appropriate) are received. PG Property Management have suggested that they will be writing to all residents imminently (as part of a wider update) flagging the CCMC arrears position.
CCMC directors (supported by Remus) are working with PG Property Management on this issue and indeed no direct legal relationship exists between the site-wide management company and individual residents.
As such individual residents do not have to take any action and there is no requirement or need to liaise directly with the site-wide management company on this issue.
Given the lack of assurance we received from both DJC and POD in relation to site-wide expenditure, we believe that members would rather us undertake sufficient and robust due diligence prior to paying any further monies to PG Property Management, especially as this accounts for 30% of the overall service charge.
For the avoidance of doubt, PG Property Management is a company created by directors of Ptarmigan Land to act as site-wide managing agent. Ptarmigan Land is the consultancy firm that acts for and represents the land owner in relation to the Channels development.
The opening of Channels Park, which is part of site-wide communal land that is gradually being opened up for use, has raised a number of questions in recent weeks and has prompted correspondence both to CCMC Ltd directors and the site wide management company.
Channels Park formed part of the original Planning Consent back in December 2012 (which can be found on the Chelmsford City Council Planning Portal). The image below is the Red Line outline for the planning consent that clearly shows the park area. The Skate Park and the Play Area were also part of the original Planning Consent.
The Deeds of sale for every home at Channels include a requirement to contribute towards the maintenance of site wide open space and provision for this is included in the planning consent.
The provision of open space maintenance through a service charge has become the norm for large developments in the last 10 years for several reasons, not least that historically Councils have been poor at maintaining such space, leading to very poor quality public domain space and indeed most Councils don’t want the responsibility.
All of the developers should have made it clear to their buyers that there was a service charge which included site wide elements and additionally solicitors should also have made this clear to buyers.
We have collated some further information on the Service Charges page for your reference that explains the obligations on owners and where the requirement to contribute to site wide open space is documented.
Directors are working closely with Remus and the site-wide management company to better understand future costs and how ongoing decisions in relation to site-wide communal land are made.
The site-wide elements will continue to be collected via the Service Charge however as previously notified, no further monies will be released to the site-wide management company until there is clarity on these matters.
Further to the update provided at last weeks residents meeting, and following further discussion with POD, credits in relation to the estate-wide service charge have now been applied to resident accounts. The total credit amounts to just under £200 per resident (pro rata as necessary) which is in line with the original instruction given to POD in July.
Information about the investigation into site-wide expenditure, as originally notified to residents in July 2020, can be found here.
If there are outstanding balances remaining on accounts after the credits are applied, this will be flagged with a request to pay the balance accordingly. As noted at the residents meeting, there are some balances that are considered so large (over 2 years) that formal debt recovery will begin should the balances not be immediately paid.
POD will be sending letters to residents week commencing 14th December confirming the credit and any balances outstanding which must be paid.
Please note that due to the impending change of managing agent and second half year service charge fee being due in January, the site-wide credits will remain on account and as such there will be no physical refund of monies at this stage.
If you have any specific questions about the site-wide credits, do not hesitate to get in touch via the Contact Form on this website.
For and on behalf of CCMC Ltd Directors
As reported over recent months, there has been an on-going investigation into the monies collected from residents in relation to the site-wide estate charge. This has been a protracted process as POD did not have access to the detailed ledger information as previously held by DJC and as such directors could not determine until recently whether expenditure was legitimate.
Directors have worked on the principle that residents should only pay for the proportion of site-wide land that is available for use by the community and despite promises by the land owners about other areas being accessible, the only land that has been made available thus far has been the Western Mitigation Area. The Western Mitigation area has however been transformed over the last 2 years into a lovely communal space and is regularly used by residents. Further enhancements are anticipated over the coming months with the addition of benches in this area.
Directors have undertaken an analysis of accounts information covering the last 2 years and as a result POD has now been instructed to return £100 per year per unit (pro-rata for those that moved in part way through one of those years) to residents in relation to monies collected for the site-wide estate charge. This represents a rebate of 80% and reflects that residents have not had use of the majority of communal site-wide land.
For private owners, the credits from 2018/19 and 2019/20 will be used in the first instance to clear any unpaid arrears on their individual account. The default position will be that any remaining credit will be held on unit holders accounts unless a request is specifically made to POD for the return of the balance.
For tenants of Housing Associations, including those with shared ownership, the credits from 2018/19 and 2019/20 will be returned to your respective Housing Association and you will need to discuss with them how the refund will be managed.
Directors have made clear to POD that no payments in relation to the 2020/21 site-wide estate charge are to be released until the credits can be evidenced and as such any monies already collected from unit holders must continue to be held in a separate control account.
In addition directors have made clear that further discussion will be required with the Site-Wide Management Company to confirm the trajectory for further land being made available together with an analysis of proposed costs for 2020/21. No payments will be released until this information has been communicated with residents and until directors are satisfied that residents are receiving best value in relation to communal site-wide land.
Andrew Wright, Director
Channels (Chelmsford) Management Company Ltd