Is this a 'fake freehold' or normal?? Shall we pull out?

[isthisfakefreehold]

More than six months ago (!) we had an offer accepted on a house around 10 years old on a new estate. We were told that there was a small service charge (200 p/a) for upkeep of communal areas on the estate. Our solicitor said, based on initial paperwork they received, that once we buy, as freeholders, we become co-members of the residents management company. Apparently this was the initial plan for the estate after the last house was sold.

I was happy with this because it sounded like we would have control over the management.

However, this does not actually seem to be the case. It seems like we are stuck with one particular company who had a deal with the developer. This management company has a restriction on the land registry so we would have to get a load of paper work and consent from them before selling.

This is the position our seller is currently in, as they haven't managed to get answers from the management company to any of our enquiries sent months ago.

This would not be a 'forever house' for us, rather a 3-5 year house, so I am concerned about potential problems with selling.

Is this all quite standard for new builds now? Or is this a 'fake freehold' we should stay well clear of?

I wouldn’t buy.

DD dropped out of a new build where the roads hadn’t yet been adopted by the council because the sewers hadn’t been adopted by Yorkshire Water. Yorkshire water wouldn’t adopt as the drains and sewers weren’t up to standard so the residents would have to,pay for any major repairs as they jointly owned the road.

New builds seem a bit of a minefield and one I couldn’t be arsed with.

Oo thanks, I didn't even think about drains

Is this all quite standard for new builds now?

No it is not.

Or is this a 'fake freehold' we should stay well clear of?

I wouldn't say that it's a "fake" freehold; I'm sure that it is actually freehold.

However it sounds, from what you have said, as though there is a restrictive covenant on the property that any owner of the property must pay towards the management company.

What I would suggest is to ask your solicitor what restrictive covenants there are with regard to this property. If there is one that says that you must pay towards this management company and accept it's rules, first check out what exactly those rules are, for example they could have rules on the height of your grass or the colour of your front door (not joking - entirely serious).

If there is a covenant saying that you must pay towards this management company I'm not even sure that this is legally enforceable - speak to your solicitor about it.

But, in any event, in the same way that it's raising all sorts of questions and doubts for yourself it is equally likely to raise the same sort of doubts and questions in the mind of any potential buyers when you come to sell it in the future.

I have a house like this. As far as my understanding goes the residents can all either chose to appointment a different management company or to manage it themselves. Like a PP said it's probably worth waiting until the council has adopted the road. My estate was finished over 5 years ago and the council still haven't adopted the roads!

I work in conveyancing and most new builds have management companies and restrictions unfortunately. It makes the selling process slower and more expensive as you have to cover the managing agents fees on your sale which are around £350 where I am in the south east.

I bought a new build freehold house on a very small estate, first owner, and we had to pay a management fee for the communal parking area and every year it went up, at first slowly then more and more. By the time we sold our house it had gone up tenfold. I would never buy a new build again and would never get involved in any kind of communal land commitment.