Buying a freehold with a service fee of £1200 pa?

[LC140391]

Hi everyone, first time posting here but I’ve been a longtime lurker due to the great insights and advice!

After nearly 18 months of trying to sell our 2 bed flat and having 2 sales fall through, we’ve accepted an offer and are underway again! We haven’t found anywhere new to live yet and want to move to St Albans. We’re viewing a couple of properties on Saturday and there’s one that my fiance and I are curious about but we’re cautious because there’s a few weird things about it..

1. It was a detached house, then they built a double extension on the back and converted those to 3 flats. The garden is now a car park for the flats. All the properties are freehold but someone else owns the car park and a strip of land.
2. The property we are viewing is the front of the old detached house. (2 bed, 2 floors, bathroom, cloakroom WC and a loft extension)
3. There is a patio area in front of the house that people in one of the flats use to get to their front door. This fronts onto the road. If you stand looking at the house, it is possible for the other flat to use a side gate to get to their front door without passing in front of “our” windows.

I bought the plans from the Land Registry to satisfy my curiosity and found that there are some pretty ancient covenants on the land and that someone else owns the car park and the little patio area...so my questions are:

1. Do we have any rights to the little patio area? Can we buy the little patio area in front of this freehold house? How much would it even be? What is reasonable? I think we could agree with the neighbours that they would deviate 5 feet and walk on the public footpath and go through the gate to be honest!
2. Is it normal to have a service charge of £1200 for a car park? All I can imagine they do is look after lighting and maybe trim some trees...

All advice hugely appreciated! We really like the location of this house as it’s close to town and the station. Alternatively if anyone on here wants to sell their property in St Albans, hit me up haha

I am not a lawyer but my last house was freehold with a service charge for the communal area around it. I had to cross the communal area to reach my freehold garage. The first year, the service charge was £987. Five years later, it was £3497 - more than my council tax. It would have been even more than that but for the fact that the covenant covering the service charge allowed for a right of appeal by referring the dispute to RICS and even that was costly, although over all, worth it.

The house was beautiful - Grade II* listed - but very hard to sell because of the service charge which didn't bear any connection to the facilities/services it was intended to pay for. It also had a number of restrictive covenants that further reduced the pool of prospective purchasers.

I would never ever buy a freehold property with a service charge again. I felt like a hostage in my own home and I might as well have opened my bank account and invited the owner of the communal land to reach in and take however much they wanted.

Others might be along later with a more positive view but I can only speak from experience and I would say walk away and don't look back.

Good luck with your house search.

To be honest it sounds like a complete pain the arse.

There is a place over the road that is a converted farm. All the houses are the old farm buildings opening into a courtyard. All they do is argue over stuff.

All they do is argue over stuff

Yes, same for the neighbours at my previous house. I forgot about that!

Lots of door slamming and public snubbing and backbiting.

Never again!

@SingingLily Oh my god that is an insane increase!!

Yes we’re in leasehold flat right now with a £2400 service charge that we see nothing for so I’m hesitant about this one..

Out of interest, what was the service charge meant to pay for and why did increase it by so much? I’m struggling to see why £1200 is needed from 4 residences to maintain a car park but hey, in my experience, the people who usually benefit from those charges are already insanely wealthy... sigh..

Insanely wealthy (or pretensions to being wealthy in some cases) - certainly true.

It paid for lighting, gardening, re-landscaping, tree surgery, any replacement road resurfacing, fencing, management admin fees, agent fees, specialist insurance, cost of any legal fees, a sinking fund.

It increased because of poor stewardship by the freeholder. He was heavily criticised in the RICS report but as he was the freeholder, there was nothing we could do to change that. Leaseholders actually have more rights than freeholders in cases where service charges are applicable because they have recourse to the leasehold authority. We didn't.

We sold to someone who thought they'd "arrived". We were just glad to depart...

My current house has its own garden and its own drive. My neighbours each side, as well as opposite and at the back, are just nice ordinary people who respect each other. Bliss.

Seriously, save yourself future sleepless nights. Don't even go for a viewing.

We've had a service charge on our house for the last 8 years and it hasn't risen much. I'd find out more about any caps etc in place and go from there.

Service charges on freehold properties are completely unregulated. With leasehold you're able to challenge unreasonable fees through the leasehold valuation tribunal, and even take over the management yourself. The same rights don't apply to freehold.

The freeholders on my development pay up to £300 a year (the amounts vary depending on how many spaces they have). There are no caps in place. They're a license to print money.

someone else owns the car park and a strip of land

I think it's known as a "ransom strip" - for good reason. Beware. I think give this one a miss.

I'd honestly not bother. These properties are the next scandals

These properties are the next scandals

I think that's a fair assessment.

It might also depend on the property and location, around here the fee means that the green areas etc are kept tidy etc to a really good standard, whereas sometimes this isn't the case when relying on the council.

Hi everyone, thanks so much for the advice! I got the breakdown of last years accounts from the estate agent and we’ve decided to cancel the viewing.

As it’s just a car park with some trees, it seemed pretty exorbitant to me that they’re charging £300 for electricity for example! There was also nearly £1000 allocated for “management fees” and that just doesn’t sit right with me. I’m not buying a freehold to then line someone else’s pockets just because they developed the land.

Quite right too, OP. I wouldn't touch it with a bargepole!

Between having three flats on my back wall and paying for them to have a carpark and possibly maybe a strip of land... I'd just say no purely because it sounds like it's been designed to be confusing as hell so someone can argue about it in court to get more money from you, making it next to impossible to sell in the future as well.

I mean, we got held up for weeks because in 1902 someone drew our square plot with slightly too fat a pen making it look smaller. If that can get solicitors scratching their heads for a few weeks, imagine them trying to make sense of your labyrinthine plot when some rando turns up to claim you all owe him 5 grand for car park fees.