Legal Action to Challenge the
Fixed Estate Charge

FEC charges have once again risen in line with RPI and for some exceeds this year’s Council Tax bill. The CMRA now asks those who can to donate an amount of money to help fund initial legal advice to guide next steps.

Over the last few months, we have been working to challenge both the calculation of the FEC and its overall fairness. We have spent a lot of time trying to get to the bottom how the LLDC and landlord calculate the FEC and also to understand why the LLDC and Mayor of London believe the FEC is considered “fair” under consumer law.

Background

The FEC, also known as the “Park Charge” and “Queen Elizabeth Olympic Park Fixed Estate Charge”, is paid by all residential and business leaseholders, freeholders and shared-owners on Chobham Manor and in a number of other locations within the Olympic Park. The FEC is linked to the RPI index and increases annually. The FEC is ultimately paid to the London Legacy Development Corporation (“LLDC”) and is used to maintain the Olympic Park. In Chobham Manor, the FEC is collected by Rendall & Rittner (“R&R”) on behalf of Chobham Manor LLP (“CMLLP”), the landlord for leaseholders.

On behalf of residents, CMRA representatives have been working to challenge both the calculation of the FEC and the overall obligation to pay it. As residents have begun receiving demands for the 2024-2025 FEC payment from R&R, we write with an update on our recent activities and to ask for your help.

The history of our challenge can be found here.

Challenging the calculation of the FEC

So far this year we have attended meetings with the LLDC, CMLLP and L&Q and exchanged letters with the CMLLP and their legal representatives. We have repeatedly challenged the accuracy of the calculation of the FEC. 

The CMLLP stands by its calculation of the clause, which backdates increases to the FEC to an earlier date, typically 1 April 2015. To confirm this interpretation of the relevant provisions is shared by the LLDC, we made a Freedom of Information Act (“FOI”) to the LLDC with respect to an example headlease. From response we believe that the LLDC calculates the FEC in this way also, backdating the increase in the FEC to that earlier date

We do not intend to challenge the calculation of the FEC further at this time. The letter received from CMLLP’s solicitors and the LLDC’s response to our FOI on the CMRA website (see link above).

Challenging the fairness of the FEC

The CMRA believes that the FEC is unfair and is disproportionate to any benefit proximity to the Olympic Park provides residents. The CMRA continues to challenge the FEC on this basis and CMRA representatives have been in contact with the LLDC and the Deputy Mayor of London. The CMRA has repeatedly challenged the legal basis on which the FEC is levied and has pushed the LLDC to release the legal advice it obtained on this. Earlier this month the LLDC provided a short letter to us, which is available on the CMRA website.

The response from the LLDC fails to explain why the FEC is not an unfair term under UK consumer law. CMRA representatives had a positive conversation with a leading consumer law barrister last year and believes we have promising legal avenues to pursue. The Competition and Markets Authority (“CMA”) has also published various reports on similarly drafted ground rent clauses and has questioned whether RPI linked ground rent clauses comply with UK consumer law.

We now need a more substantial legal analysis to gauge the strength of the case and guide next steps.

What are the next steps?

If we can raise enough funds, we will be guided by the legal advice. At this time all options are on the table. If the advice is positive and confirms our views, we will use it to help us engage further with the LLDC, local politicians and possibly the CMA (which took action against a number of landlords applying unfair ground rent clauses). We will also consider bringing a legal challenge through the courts or an arbitration proceeding, depending on the level of support among residents.

For this year

Many of you have raised concerns about the format of demands and whether the disputes have been resolved.  You may wish to attached a letter of protest to your payment, or simply drop a letter to R&R for the record now that you have paid.  We have created a template letter (for leaseholders) for you to use in Word and Google docs (please download the document):

• Google docs. 

• MS Word. 

or for Freeholders:

• Google docs 

• MS Word 

Send your updated document to ChobhamManorpm@rendallandrittner.co.uk