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  • FIRST POST
    • B_Binks_737
    • By B_Binks_737 4th Feb 17, 1:00 AM
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    B_Binks_737
    Freehold services charges - what are my rights?
    • #1
    • 4th Feb 17, 1:00 AM
    Freehold services charges - what are my rights? 4th Feb 17 at 1:00 AM
    Hi

    I moved into my new build (freehold) property in January 2015 and was fully aware that I would be charged a service charge by the developer for the upkeep of the private estate (which consists of a couple of lamps and bushes in a tiny cul-de-sac). My agreement says that this charge will consist of a fixed £5 and a variable charge representing a fair and proper proportion of the developer's expenses, payable bi-annually on 1st Jan and 1st July each year.

    Despite none of the other 9 residents ever having seen the developer perform any sort of maintenance, I paid the first two installments in respect of the 2015 year without question as I didn't really want any grief and the amounts were fairly small.

    However, since the payment in July 2015 (for 6 months in advance) I received no further invoices from the builder. I didn't query this as there was definitely no maintenance being done to communal areas as the agreement suggested (the residents are now doing this themselves).

    Then a couple of months ago a bulb went in a street light which meant our private parking area was in complete darkness and was becoming dangerous in winter weather. So we contacted the builder and asked he replace the bulb. This took him a couple of months and surprise surprise the day the bulb was replaced we all received invoices for service charges covering the period from July 2015 to July 2017!

    Firstly, I will of course be challenging the fact he's asked me for fees covering the six months from July 2015 that I've already been invoiced for. Secondly, the amount seems disproportionately high given all he's done in the last two years is change a bulb so I will be asking for a breakdown of costs.

    However, my main query is this; even if we can agree the amount is reasonable can he demand payment for two years worth of fees when the agreement says they will be payable bi-annually? He has definitely raised no other invoices over this two year period. I suppose we could have chased him for an invoice but given no work was being done I really don't think this was the residents' responsibility. And I didn't want to just pay amounts in line with the previous fees as I can't second guess what the variable part of the charge will amount to and for all I know his bank details may have changed!

    The man is notoriously disorganised and has for the last two years been working on a bigger, more profitable development so I feel it's very unjustified to ask us for a large payment of unexplained charges in one go because he's neglected to send us invoices over the last 18 months! Do we have a valid case here?

    Any advice or second opinions would be much appreciated!

    Many thanks

    B
Page 1
    • Hoploz
    • By Hoploz 4th Feb 17, 5:24 AM
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    Hoploz
    • #2
    • 4th Feb 17, 5:24 AM
    • #2
    • 4th Feb 17, 5:24 AM
    As you're contractually obliged to pay the service charge then yes you'll have to pay what's been invoiced even though the invoice hasn't been raised until later.

    What sort of sum is it? Residents should be given a breakdown of annual costs so they can see where their money is going, so yes go ahead and ask for this. You may find there are costs which you don't realise, eg is there a gate on your private parking area which has a monthly maintenance insurance, public liability on the communal ground, etc
    • Harryp_24
    • By Harryp_24 4th Feb 17, 6:16 AM
    • 163 Posts
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    Harryp_24
    • #3
    • 4th Feb 17, 6:16 AM
    • #3
    • 4th Feb 17, 6:16 AM
    Welcome to leasehold, If they want to raise the price of their work they can can subcontract to a sister company and charge whatever they want. As a leaseholder you can challenge it, and they have to listen. They dont have to do anything about it though.

    Edit. Didnt realize that its freehold. If you havnt signed a contract on that tell him to F**k off.
    Last edited by Harryp_24; 04-02-2017 at 6:19 AM.
    • JosephPaul
    • By JosephPaul 4th Feb 17, 7:10 AM
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    JosephPaul
    • #4
    • 4th Feb 17, 7:10 AM
    • #4
    • 4th Feb 17, 7:10 AM
    Thanks a lots for providing a crucial advice.
    • AnotherJoe
    • By AnotherJoe 4th Feb 17, 9:39 AM
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    AnotherJoe
    • #5
    • 4th Feb 17, 9:39 AM
    • #5
    • 4th Feb 17, 9:39 AM
    Since you seemingly have a contract that says he has to provide a charge based on a fair and reasonable set of costs, I'd ask for an itemisation of those costs. The fact it's late is neither here nor there, otherwise, taken at extreme, if it was even one day late you could wriggle out of paying.

    Take your gas bill for example, if there was a delay in sending it out, that doesn't mean you don't have to pay it! I don't see this is any different. And on the detail, if the gas company sent you an invoice that said just "gas bill £500" you'd be in your rights to demand an itemised listing, this seems the same to me.
    • rtho782
    • By rtho782 4th Feb 17, 9:47 AM
    • 1,052 Posts
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    rtho782
    • #6
    • 4th Feb 17, 9:47 AM
    • #6
    • 4th Feb 17, 9:47 AM
    You are a freeholder with an estate charge. While leaseholders have protections, you do not. The fees do not have to be reasonable or fair. There is no limit to how much they can charge. You cannot get out of paying them.

    The fees have to be based on something, but let's say I own the land, I engage my wife to change the bulb, she invoices me £1,000,000. I then charge that to the freeholders, boom, that's the charge. You cannot challenge it.

    Once the developer leaves site, they will sell the shared land and the management of it to a third party, who will likely increase the charge significantly every year and you can't get out of it.

    This is why you don't buy freeholds with estate charges from dodgy developers.

    http://arma.org.uk/downloader/f15.pdf

    Freeholders have in the past attempted to challenge these, and gotten nowhere. Unlike a leaseholder you have no right to buy the freehold. Anyone that buys the house from will be bound to pay these fees as they "have use of" the shared facilities.
    Deposit Saved since 01/12/15: £13,000 / £15,000 House Bought!

    Debt Cleared since 01/12/15: £6,000 / £7,500
    • chanz4
    • By chanz4 4th Feb 17, 10:28 AM
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    chanz4
    • #7
    • 4th Feb 17, 10:28 AM
    • #7
    • 4th Feb 17, 10:28 AM
    Why don't you form your own management company as an estate and sack his maintenance company
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
    • moneyistooshorttomention
    • By moneyistooshorttomention 4th Feb 17, 10:36 AM
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    moneyistooshorttomention
    • #8
    • 4th Feb 17, 10:36 AM
    • #8
    • 4th Feb 17, 10:36 AM
    You are a freeholder with an estate charge. While leaseholders have protections, you do not. The fees do not have to be reasonable or fair. There is no limit to how much they can charge. You cannot get out of paying them.

    The fees have to be based on something, but let's say I own the land, I engage my wife to change the bulb, she invoices me £1,000,000. I then charge that to the freeholders, boom, that's the charge. You cannot challenge it.

    .
    Originally posted by rtho782
    On the other hand logic says there must be some protection somewhere against exorbitant charges being imposed.

    If only because I've never yet seen any media publicity about Greedy Management Company trying to charge the earth v. Trodden-on householder/s (whether it be of a court case against Greedies or a "barricade themselves in house - being bodily picked up and thrown out by bailiffs or something" variety).

    If that sort of thing had been done to someone - then I would expect to have read about cases of it happening and pressure for a change in law by now.
    NOT dancing to anyone else's tune.

    It's the 21st century now....
    • tim123456789
    • By tim123456789 4th Feb 17, 12:10 PM
    • 1,758 Posts
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    tim123456789
    • #9
    • 4th Feb 17, 12:10 PM
    • #9
    • 4th Feb 17, 12:10 PM
    Welcome to leasehold, If they want to raise the price of their work they can can subcontract to a sister company and charge whatever they want. As a leaseholder you can challenge it, and they have to listen. They dont have to do anything about it though.

    Edit. Didnt realize that its freehold. If you havnt signed a contract on that tell him to F**k off.
    Originally posted by Harryp_24
    The fact that it is freehold doesn't mean that there cannot be a contractual charge.

    But what it does mean is that owners have less rights when it comes to challenging those charges. A drop off in the legislation there!
    • rtho782
    • By rtho782 4th Feb 17, 5:43 PM
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    rtho782
    On the other hand logic says there must be some protection somewhere against exorbitant charges being imposed.

    If only because I've never yet seen any media publicity about Greedy Management Company trying to charge the earth v. Trodden-on householder/s (whether it be of a court case against Greedies or a "barricade themselves in house - being bodily picked up and thrown out by bailiffs or something" variety).

    If that sort of thing had been done to someone - then I would expect to have read about cases of it happening and pressure for a change in law by now.
    Originally posted by moneyistooshorttomention
    It's anecdotal, but after the fees increased from £200/y to £400/y, then £800/y, then £1200/y, my friends sold their Persimmon new build.

    They can charge whatever they like.

    "We need a sinking fund as we chose not to get the council to adopt the roads so they will need resurfacing in 30 years and it will cost millions" for example.

    The thing is, as freeholders you don't even have any rights to see accounts, so nothing you can do.

    http://webcache.googleusercontent.com/search?q=cache:u2nWt08040wJ:www.solegal.co.uk/estate-rent-charges-beware-buying-freehold-homes-private-estates/+&cd=3&hl=en&ct=clnk&gl=uk
    Deposit Saved since 01/12/15: £13,000 / £15,000 House Bought!

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    • AdrianC
    • By AdrianC 4th Feb 17, 6:30 PM
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    AdrianC
    ...surprise surprise the day the bulb was replaced we all received invoices for service charges covering the period from July 2015 to July 2017!
    Originally posted by B_Binks_737
    You can't have it both ways.

    Either you want him to manage the facilities - or you don't. If you do, then his time and overheads need to be paid for at a proper commercial rate.
    • moneyistooshorttomention
    • By moneyistooshorttomention 4th Feb 17, 7:00 PM
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    moneyistooshorttomention
    It's anecdotal, but after the fees increased from £200/y to £400/y, then £800/y, then £1200/y, my friends sold their Persimmon new build.

    They can charge whatever they like.

    "We need a sinking fund as we chose not to get the council to adopt the roads so they will need resurfacing in 30 years and it will cost millions" for example.

    The thing is, as freeholders you don't even have any rights to see accounts, so nothing you can do.

    http://webcache.googleusercontent.com/search?q=cache:u2nWt08040wJ:www.solegal.co.uk/estate-rent-charges-beware-buying-freehold-homes-private-estates/+&cd=3&hl=en&ct=clnk&gl=uk
    Originally posted by rtho782
    That's absolutely wicked.

    Over what period of time did that charge go up from £200 pa to £1200 pa?

    It's very very odd that there doesn't seem to have been a law passed yet to stop this.
    NOT dancing to anyone else's tune.

    It's the 21st century now....
    • Kyresa
    • By Kyresa 4th Feb 17, 8:57 PM
    • 1,352 Posts
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    Kyresa
    Welcome to how councils sell off land these days... Yes you can build your 400 new homes, but we won't adopt the road and you have to continue to maintain the land.... and thus new build managed estates were born.

    Just wait till you come to sell, they'll charge you £300 odd for a management pack (which you won't be able to avoid) and the incoming buyer about £250 or so to register their interest!
    • moneyistooshorttomention
    • By moneyistooshorttomention 5th Feb 17, 7:50 AM
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    moneyistooshorttomention
    That hadnt occurred to me until you said that.

    But...yep...I guess it is one tactic Councils can/do use to deal with pressure from Government level of being pushed to build extra houses they hadn't decided to build themselves. You can take a horse to water but you cant make it drink translating into = the Government can force us to build more housing than we decided on - but they cant make us pay to maintain the extra roads that come with it.

    Though, in fairness, the residents of those extra houses will be paying Council Tax (which, presumably, at least covers the cost of maintaining their roads - as well as being their share towards communal facilities of street-cleaning/library/etc).
    Last edited by moneyistooshorttomention; 05-02-2017 at 7:53 AM.
    NOT dancing to anyone else's tune.

    It's the 21st century now....
    • tim123456789
    • By tim123456789 5th Feb 17, 11:19 AM
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    tim123456789
    Welcome to how councils sell off land these days... Yes you can build your 400 new homes, but we won't adopt the road and you have to continue to maintain the land.... and thus new build managed estates were born.
    Originally posted by Kyresa
    They will adopt the roads, but you are right about the green spaces, footpath lighting etc
    • B_Binks_737
    • By B_Binks_737 6th Feb 17, 8:28 PM
    • 2 Posts
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    B_Binks_737
    You can't have it both ways.

    Either you want him to manage the facilities - or you don't. If you do, then his time and overheads need to be paid for at a proper commercial rate.
    I never suggested that I'm not prepared to pay a fair and proper rate for the work he carries out... that's why I signed the agreement.

    My point was that the agreement says the service charges are to be payable bi-annually and it's been well over year since we were last invoiced. Despite promising services such as regular gardening would be covered, he has done absolutey nothing to maintain the communal areas over that period other than changing this bulb the other day... and I thought it was worth noting that this coincided with the day he finally decided to post invoices through our door.

    I was merely intrigued to see if others had been through similar experiences and whether anyone knew of any legislation that would enable us to ask to be invoiced on a more regular basis in line with the agreement (so we can better monitor the charges and services carried out) and request a breakdown of charges. As pointed out there is a lot of legislation covering leaseholders but I drew a blank when looking for freeholders rights.

    Thank you to those of you who have taken the time to provide a polite, informative response. It has explained why my searches for relevant legislation revealed very little. However, I'm surprised at how blunt and frankly critical others have been on here.

    I thought this forum was a place for people to come and share experiences in the hope the general public get more informed. However, having now glanced at a few other threads, I'm getting the impression some people just want the opportunity to appear clever and patronise those of us with slightly less experience.

    With that in mind I doubt I shall bother using this forum again. I expected so much better.
    • Isha_s
    • By Isha_s 12th Feb 18, 1:22 AM
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    Isha_s
    Menu



    Hi rtho

    Could you please let me know over how many years the service charge went £200 a year to £1200 a year with the developer Persimmons ?

    I am looking for a new built freehold with a £200 service charge but I do not understand this.
    There are no playgrounds or communal parks on the development site of the private estate.
    and
    Could this mean if I have a garden the the managing company will also cut the grass in my garden because I will be paying them the service charge of £200 a year?

    Could someone help me inderstand this please?

    Thank you for your help in advance

    Isha
    • Mickygg
    • By Mickygg 12th Feb 18, 1:33 AM
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    Mickygg
    I think it's a pretty safe bet that they will not cut your grass.

    Has the road been adopted? If not that would be part of the cost right there.

    Ask the developer as we would all be guessing.
    • Isha_s
    • By Isha_s 12th Feb 18, 2:07 AM
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    Isha_s
    Hi Mickygg,

    Thanks for your speedy reply on my very first post on the forum!

    Yes I will sk again but the answers are not very clear.

    The roads will not be adopted so they will be a part of the service charge.

    and the site is still under construction but they are in a rush to sell the plots and anyone who wants to reserve has to pay a deposit and exchange contracts within approx 30 days time frame.
    • Davesnave
    • By Davesnave 12th Feb 18, 5:37 AM
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    Davesnave
    With that in mind I doubt I shall bother using this forum again. I expected so much better.
    Originally posted by B_Binks_737
    That's your prerogative, of course, but equally, it's a kick in the teeth for those who were helpful.
    'A society grows great when old men plant trees whose shade they'll never sit in.'
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