Residents 'trapped' in London block by 'aggressive' developers over £1m bill

Leaseholders in the modern east London apartment complex have told LBC the block’s developer, who owns the building, owes over £800,000 in outstanding fees to authorities.

Until the debt is paid, there is a risk it could be transferred to them if the developer goes into insolvency, meaning mortgage lenders are refusing to support any sales in the building.

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The leaseholders claim to be left powerless in a “feudal” system controlled by an absentee freeholder who refuses to pay their debts.

Residents told LBC they have already wasted tens of thousands of pounds on solicitors’ fees attempting to sell their home, only for sales to fall through at the last minute.

When one leaseholder confronted the developers about repaying the debt, they allegedly threatened to let the business ‘fold’ and transfer the responsibility to the building’s residents.

Richard Bell, 38, has a one bed flat at 43 Upper Clapton Road in Hackney with his wife and their two-year-old son.

The family of three share the same bed and say they barely have enough space to live.

But when the pair tried to sell their home last year, their solicitors discovered the outstanding debt and the sale collapsed, meaning they had wasted £10k on fees.

“When freeholders don’t pay their debts and nobody holds them accountable, leaseholders are left powerless and paying the price,” Mr Bell said.

“We’re stuck in a one-bedroom flat with a toddler and no way out.”

His wife, Anna, added: “It’s rage inducing. We have a two-year-old taking up increasing amounts of space, and he’s still sharing a bed with us.

“I never thought that him having his own bedroom would be a luxury, but now it feels like a dream.

“We would love to have a second child, but it’s impossible. I’m not getting any younger, and it’s putting a limit on my life and choices.”

Alison Coggan lives in the building with her husband and told a similar story.

“We want to start a family, but our life plans are on hold,” she said.

“We’re stuck, we’re wasting money, and we just feel trapped in this building with debt hanging over it.

“We bought our flat through a Help to Buy loan – and we wanted to sell up and pay it off, but we’re stuck paying the interest on that, and the solicitors fees are starting to rack up.”

One resident described how they felt like they were stuck in a “feudal” system, while another added: “It’s an extractive arrangement where we’re treated as cash cows for ground rent by the freeholder, who’s left us trapped in unsellable homes and cost us thousands of pounds.”

Mr Bell said Hackney Council, which is owed the money, had refused to rule out holding the building’s 17 leaseholders responsible for repaying the debt, which consists of standard fees developers must pay to help fund local infrastructure like schools, roads, and parks.

By the end of 2025, the council was owed over £3.2 million in such charges, which had not been paid by developers in the previous seven years, according to internal figures seen by LBC.

“Hackney Council has taken little action to pursue these debts, and they’ve not explained why, despite being asked directly,” he said.

“They said they would launch an urgent investigation and then essentially went quiet for weeks.

“Eventually we got a letter back that read as if it had been written by lawyers to minimise risk.

“There was no recognition of the human impact in all of this. All we are asking for is a guarantee that they won't hold us liable for debt that has nothing to do with us.”

A council spokesperson said it understood the residents’ frustrations and was working to recover the money as “quickly as possible”, which LBC understands may involve legal action against the developer.

But a legal case could take years to resolve, with Mr Bell describing it as ‘cruel’ to leave residents in limbo.

In emails seen by LBC, a council officer told Mr Bell that they had been in touch with Restoration Hackney’s director.

But Mr Bell claimed that, when he spoke to the company director on the phone, he denied any knowledge of it.

The director, French national Damien Jourquin, describes himself on social media as a “seasoned” and “award winning” property investor who has played a “pivotal role” in developing over 125 residential and commercial units across England.

According to Companies House, he was appointed as director of the development company in 2024, after the construction and sale of the flats in 2018.

LBC approached Mr Jourquin for comment and gave him several days to respond to the claims.

“The guy was quite aggressive,” Mr Bell said. “He was very clear that if we pursued this in any way, he would simply allow the business to fold.

“That could have ramifications for us, impacting the upkeep of the building, and it creates a huge amount of uncertainty, impacting whether people want to buy flats here.”

The residents have even enlisted the support of their local MP, Diane Abbott, with the veteran politician telling LBC their situation was “unacceptable”.

She called on the council to give residents “clarity and reassurance” that they will not be held liable for a debt they did not incur, and for the freeholder to “meet their obligations in full.”

The case reflects wider concerns about the UK’s leasehold system, which includes around five million homes and has been criticised for leaving owners exposed to costs and legal risks they do not control.

Sebastian O’Kelly, a leasehold campaigner and director of charity, the Leasehold Knowledge Partnership, described the situation as “absolutely appalling.”

“People who’ve quite innocently purchased a home have ended up on the hook for the dodgy dealings of a developer who owes Hackney Council a considerable amount of money,” he said.

“Through the errors or graft of other people, ordinary families are now suffering.

“They cannot sell, so their flats are basically worthless.

“We’ve got to get this resolved without the leaseholders having to go to the High Court and wasting years of their lives (fighting) this.”

Mr O’Kelly added that leaseholders were particularly vulnerable because “flat owners are long term tenants under law and come at the bottom of the heap.”

The Government has proposed sweeping reforms, including plans to ban new leasehold flats, cap ground rents at £250 a year, and replace the system with “commonhold” ownership, where residents own their buildings outright.

But the changes are still being developed and may take years to fully come into force.

In a statement, Hackney Council told LBC they were “disappointed” at the failure of the developer to pay their planning contribution, adding: “We are actively working to recover the money and are pursuing all available options, including legal action if needed.

“We’ve taken legal advice and are continuing to press those responsible to resolve this as quickly as possible.

“We take non-payment of developer contributions very seriously and will keep pushing until the full amount owed is paid.”