Query about levy charge and deed of variation

[HouseBuyingFrustrations]

Hi,

I am in the midst of purchasing a house - 17 years old. I haven’t signed the contract yet but my house had an offer back in April and I’d already had an offer accepted on another house but the seller pulled out.

We are almost ready to complete but my solicitor has emailed me saying that the house I am purchasing comes with a levy charge. I knew about it but thought it was towards maintenance of the estate. However, the solicitor has said it is classed as a rent charge and if I didn’t pay it for a certain amount of time, then the levy company could repossess the house! They said that the title to the property does not have a clause which would protect my mortgage lender in case of any such repossession, as is normal with most properties these days.

The easiest way to deal with this is to enter a deal of variation (no idea what this is) with the company to agree a clause that, should any situation arise with regard to enforcement action, the levy would contact the mortgage lender before taking further action. The fee for this is around £350. The company, however, have said no to this.

The other option is to obtain indemnity insurance on completion which would be satisfactory to my mortgage lender. However, with this, the issue would come when I want to sell the property. It may be that any future buyers solicitor, or their mortgage lender, may not accept indemnity insurance and will insist upon a deed of variation entered into. The company have already said no to this.

Where do I stand with this levy? I’m not sure what it is? I’m buying the house in full so not sure what this ‘rent-type’ payment is. I plan on paying off the mortgage in 7 years when I get my pension lump sum anyway but I take it I have to pay this levy for the rest of my life?? Does it stop when I have paid off the mortgage?

I am more concerned about what will
happen when I sell as per what the solicitor has said.

Does anyone know anything about this levy?

It’s a fairly new estate on the edge of town - my new house is one of the first built and they’re still building.

Do I need to worry? Will I not own the house outright??

I don’t doubt I won’t be able to pay it but it just feels like another tax to pay!

I’m now panicking and wondering if I should pull out myself!

Bit confused because you say the house is 17 years old, but further down mention its brand new ,...... anyhow, we've moved into a new build with a maintenance charge and yes you have to pay it forever, even when you've paid off the mortgage.

It's a rip off charge to pay for upkeep of the estate, generally cutting grass.

Ours has had the part regarding repossession removed, and as your solicitor stated, this is the 'old version' of the contract. In all honesty I wouldn't buy a house with this type of contract set up on it.

@Ilikewinter the house my sellers are moving to is brand new. The house they’re selling to me is 17 years old.

What am I paying council tax for if I have to pay this charge? I don’t pay it on my current home and the grass on the estate is cut by the council.

Ah ol, I understand!

I know and it's a total farce of a fee, it's something that new builds for at least 20 years have been charging - the council won't cover these things, yet you still have to pay full council tax.
You need to know what it's for, have roads / streetlights been adopted, do you have a play area to maintain?. Ours is £80 a year but they only mow grass - extortionate really!.

My big worry with your new house is the fact that you can't get the repossession bit taken out.

@Ilikewinter
There is a nature park on the estate and it’s mainly for that. I have instructed the solicitor to contact the levy company about it. It’ll delay things but I’m not going ahead of unsure. I think the repossession bit is a bit of a cheek - this also stands once I have paid the mortgage off in full! I think I’ll put it up for sale in 5 years anyway.

So it’s not council tax as it’s not publicly owned land it’s private bits of your estate although visually they probably look the same as highways verges. Otherwise new house builders could just build fancy estates and pass the cost to the local council for fancy shrubbery and play spaces or ponds and our council tax would go up and up forever!!

I wouldn’t like the part where they can reposes if you don’t pay. I’m sure you would pay but what a threat to hold over you!

The park is open to the entire town, or anyone - not just the residents of the estate who pay the levy. I found a FB group of residents and everyone seems really annoyed at having to pay it.

I might get in roux with the company myself to ask more questions.

Humm, I would be even more cautious with a park to maintain, I read too many stories about extortionate fees due to items needing repairing, which seemed to be caused by people who don't live on the estate. If it's privately owned and managed then I don't think it should be open to everyone.

In touch with the company!!

I’ll try and do a bit of digging for information.