To buy a new build with an "estate management fee"

[SapphireBattersea]

I am nearing completion on buying a new house, its a new build but about ten years old

Only just found out there's an estate management fee, not a problem really it's about £20 a month for grass cutting upkeep of the roads and communal areas

However I've now Done a bit of googling and seen some horror stories, seems to be a licence to print money for some unscrupulous twats, there's been incidents where the management company has sold the contract on and they've massively increased the costs to piss taking levels, then of course you're stuck with the house cos no one wants to buy it with those sort of charges

Can I ask for posters experiences paying these fees? Has anyone had this actually happen?

Other than this it's my dream house

Our first home was a new build. Estate management fee was very reasonable for the first two years, then jumped massively - several times the rate of inflation. In the end they formed a residents association, sacked the management company and appointed a new one which was reasonable. But it was a hassle, I hated the uncertainty of not knowing what the service charge would be year on year, and I would never buy a new build again for this reason

Just to add, several of you have commented that if there are problems residents should be able to ditch the management company and emply a new one. With the (major) developer I was intending to buy from, their model was to sell the land to the management company. As they were then the owners of the land, there was no option of booting them out, no option of the residents managing it, or anything like that. The contract was very clear and if we had any issues there was absolutely no option other than court.

Thanks for all the replies

Some mixed responses....😬 I'm happy to pay what the cost is now as it's worth it for maintaining the communal areas etc as it is really lovely

It's not a luxury development it's fairly basic really

I think I need to find out who the company are that do it and do a bit of digging

It's a beautiful house and great area I'll be gutted if this is a deal breaker

What Trillis describes is exactly the situation we have. We cannot sack the land management company because they own the land our estate is built on. Our estate includes houses built by three different developers. We're lucky because we only have the land management cowboys to pay. Residents down the road have to pay the land management company and (in some cases) two further factoring companies. The factors can be sacked but the land managers we are stuck with. Tbh I don't begrudge the £150 a year but our Residents Association is currently supporting those who are being taken to court because they (understandably) object to the whole blank cheque model.

Is it leasehold or freehold OP?

God trillis that's awful

@Ihaventgottimeforthis it's freehold

The property I was buying was also freehold. The developer used to sell leashold properties, but stopped doing so - presumably when the legislation changes relating to leasehold were announced. My assumption is that they used to make a tidy profit by selling the leaseholds to third parties. Now they can't do that, they are instead making their tidy profit by selling the communal areas to a third party.

I think the council may also share some of the blame here. The devloper said that the council would only give planning permission if there was at least 40% green space (think that was the % but can't quite remember). However, the council then wouldn't take on the maintenance of the estate because there was so much green space. Yet as a pp said, the houses still have to pay full council tax as well as paying the maintenence charges. I was told that years ago developers used to pay councils a lump sum that would cover the maintenance cost for a number of years, and then the council would just take it over. But it seems that rather than paying the council, developers found a way to make someone pay them instead.

One of the articles I read said that this model is likely to be the next scandal, like leashold was. I can see the attraction for the council (who get the same council tax despite doing no maintenance), and for the developer (who gets a nice lump sum back from the sale of land proceeds) and the management company (who has a good annual income, written into householders' title deeds, that they can increase whenvever they like). It's just the householder that is shafted.

I've been to the house this morning as needed to measure something

Got talking to a couple of the other residents and mentioned we were concerned about the maintenance charge. They said they'd been there since the development was built and it is only allowed to go up at the in line with inflation. So it has only gone up very slightly in the time they've been there

I will still check out the company etc but I feel more positive

Thats great news!

OP didn`t you realise there was an extra charge when looking at the house? especially as this is common on new developments now?

Our management fee has barely changed in 12 years. It's currently just under £200pa. Our estate has a lot of open spaces and woodland to maintain. The residents association is very proactive in making sure we get the best value possible.

I would just point out that having a residents association managing the grounds or the management company and paying a small monthly fee is sensible.

From bitter experience it is way better then finding out that the council hadn’t adopted your estate grounds as previously reported and getting hit with a High Court writ by a neighbour for costly repairs as your deeds state that all estate occupants are jointly and severally liable.

For added stress, have the writ arrive on the same day that you accept an offer on your house and then pay ££££ to get it sorted.

I can assure you that it does affect the mortgage as affordability can NOT be confirmed if nobody knows how much this scandalous management fee will cost.

The other thing I would check is whether the roads are adopted by the council or not. I’m on an estate that is about 12 years old. There is a play park that is maintained by the council and roads are adopted so drains cleared, street lighting fixed etc. by the council. The residents of the newer estate up the road have to pay a management fee. This has led to some resentment when people who don’t live on the estate have come to use their play park. However I think a lot of estates are like this now so may be hard to avoid. Obviously saves the council money over the long term as they have no responsibility for maintenance.