Freehold on a private estate?

[5thCircleOfHell]

Made an offer on a house. Turns out it's one of these ones that come with an estate management charge. Now I'm in two minds about whether to go ahead.

Pros: Beautiful house, ticks all the boxes, huge garden, potential for holiday letting, desirable seaside area, other houses in the same development are snapped up straight away

Cons: Estate management charge - currently about £700 pa. Uncapped charges, potential to put a leasehold on the house if you don't pay

My primary concern is for resale potential. Knowing that others sell on the same estate quickly settles my mind a bit. However, I know some mortgage lenders are leery about lending under these circumstances. On the other hand, I know there's a bill on the table for Parliament to give the freeholders in these estates more powers to contest charges etc.

What is other people's experience? It's the biggest decision of my life and, quite honestly, I'm losing sleep over it.

No experience, but uncapped charges would worry me a lot. Is the road adopted by the council - if not that could create a huge cost in the future.

I don't understand the potential to put a leasehold on the house for non-payment of the uncapped management charges - that sounds like a nightmare.

There’s a similarly run new estate near me and the management company sound like a complete headache. Try to find a fb group for the estate and see what residents are saying (if anything).

Don’t base any decisions on legislation that hasn’t gone through yet.

They can't put a leasehold on a freehold. If you don't pay the charges it's the same as any other bill they will send the bailiffs round to collect what you owe. I live on one of these newbuild estates and the charges are for things like street lighting communal areas that aren't going to be taken over by the council. It will rise and fall depending on any major works. Ours is about £25 per month.

They can if it’s not worded carefully @snazzynamechangetiming. It’s become a big issue since the case of Roberts v Lawton.

@MinnieMountain surely it's a charge against the property not changing its legal status of ownership ? Link ?

Roberts v Lawton

www.wrigleys.co.uk/news/property/property-investors-alerted-following-recent-case-on-rentcharges/#:~:text=Roberts%20v%20Lawton%20is%20a,to%20%C2%A315%20per%20property.

All recent developments in my area, certainly in the last twelve years have had a management company. The fees payable depend on the extent of the work they do. Ours just does gardening on communal areas, so quite cheap. Our last house was more expensive as we had to pay for street lighting and security cameras too. It's really nothing strange or anything to worry about.

Is there a residents association for the estate, if not see about setting one up (if you move there). By law you will be able to have an AGM and the annual accounts can be reviewed. I would not worry in you situation as many Estates and Apartments are run on this model. If you are Freehold you can become Leasehold with you selling the Freehold.
I would buy the property and then set up your own house account to put say £50 per month in to build up a fund for a couple of years so should the annual fee fluctuate or a one off additional cost be applied at least that way you have a float. (Generally the management company should have an excess of funds remaining each year to build up a slush fund for higher incidental costs.)
Get the residents association to be proactive and involved in the management, if you as a group are not happy with the management you can apply through the courts to take posession of the management and form your own company.

@TwoLeftSocksWithHoles that appears to be a leasehold property and the leaseholder is pausing the sale due to ground rent arrears ? No ? Am I missing something? Many leasehold new builds have terrible clauses with ground rent starting at a peppercorn rate, but doubling every 5 years. But there are many many freehold properties on private developments new build or not.

Op I wouldn't be put off as long as you can afford the monthly charge. Ours has gone down since a change of management company was voted in , then stayed the same for 2 years.

It wasn’t a leasehold with ground rent arrears @snazzynamechangetiming. Rentcharges are different.

However OP, with a decent conveyancer any rent charge that could be an issue will be spotted and dealt with.

It’s the uncapped estate management charge I’d be wary of.

Uncapped estate management charge just means that unless there is a residents association to keep track of what the management company does charges may go up more than leaseholders anticipate. Whenever you by leasehold you can expect to pay management charges. Hope you can get in touch with others on the estate to find out more info.