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    • futuresbright
    • By futuresbright 4th Sep 17, 6:58 PM
    • 72Posts
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    futuresbright
    Management pack - First I've heard of it?
    • #1
    • 4th Sep 17, 6:58 PM
    Management pack - First I've heard of it? 4th Sep 17 at 6:58 PM
    I moved into a freehold new build property about 4 years ago, we were told a management company would be taking care of all grass cutting and maintenance of public areas at a cost of approx £120 per year, we were never given a contract to sign, we just accepted this and got on with living in our new home.

    One of our neighbours has just moved house and has told us at her surprise when the management company has invoiced her for the following:
    £340 for a management pack.
    £144 for names to be removed and added to their records.
    £150 in case of shortfall at end of year, this may be refunded if no shortfall.

    My neighbour was not far off completion and didn't want the sale to fall through so didn't really question this and paid it.

    I have contacted the management company and the house builder asking where these fees were documented when I purchased my house, I'm still awaiting a reply from management company and the house builder have said that it should have been on the disc I was given from my solicitor (it is not on there) but they also feel the fees are excessive and they are unsure and are taking advice from their legal dept.

    Has anyone else had to pay for a management pack in these circumstances?
    Surely if myself or any of my neighbours have not been told of these fees when buying they cannot introduce them without notice?
    My worry is that if it is not sorted now then if in 5 or 10 years we decide to move the fees could have risen further?

    Thanks in advance.
Page 3
    • moneyistooshorttomention
    • By moneyistooshorttomention 6th Sep 17, 6:40 PM
    • 13,422 Posts
    • 36,573 Thanks
    moneyistooshorttomention

    Day 3 of waiting for comment from management company has passed
    Originally posted by futuresbright
    Seems to confirm my cynical opinion about their timing on this.

    They know blimmin' well just how much pressure many buyers put on vendors to get to Completion asap. Hence I bet there is a bit of deliberate delay going on here (oh whoops make that "Honest yer honour we wuz ever so busy with whatever-else-we-can-think-of and that's why you've had no response from us yet").

    I think they may have bitten off more than they can chew with you. Do keep us posted
    If there's "4 tendencies" type of people (Gretchen Rubin) = yep....Questioner type here
    - Meets an expectation only if they believe it's justified and resists anything arbitrary or ineffective
    • NeilCr
    • By NeilCr 6th Sep 17, 6:44 PM
    • 945 Posts
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    NeilCr
    Looks like you've missed the fact that they ALREADY own the freehold. There's no lease involved here. And apparently there's no covenants requiring them to pay service charges either. Looks like this management company have been having a whale of a time collecting money they're not actually owed for doing a job they're not actually required to do!
    Originally posted by ThePants999
    Isn't the point that they own the freehold of their house but are caught because the freehold of the estate the house is on is owned by someone else (the builder). I'm in the same situation but we took on the estate freehold from the builder

    I've had this twice and - to be honest in both cases - the builder was more than happy to get shot of the estate freehold once all the properties had been sold. As someone else said it might cost a few bob, though.

    I've got to say I am hugely surprised that there are no covenants regarding service charges. Given there are 58 properties you'd have thought this would have been picked up before
    • moneyistooshorttomention
    • By moneyistooshorttomention 6th Sep 17, 7:38 PM
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    moneyistooshorttomention
    Well - given that its 58 properties involved - in OP's position I'd be out there ringing at the doorbells of all the 57 other properties involved and telling them about this malarkey.

    Followed by some sort of communal action on this. Maybe a communal letter from a solicitor saying "Na na na - nowt in writing - now take a long jump off a short pier - because you never told us/got our agreement and there ain't nowt in writing. So - blimmin' there" phrased in suitable solicitor language

    To me - it feels like there's a good chance they'd back off on this if faced with a united "Where is it in writing then? Huh? Huh?" response.
    If there's "4 tendencies" type of people (Gretchen Rubin) = yep....Questioner type here
    - Meets an expectation only if they believe it's justified and resists anything arbitrary or ineffective
    • economic
    • By economic 6th Sep 17, 7:50 PM
    • 1,741 Posts
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    economic
    OP - so i think you need to explain exactly what you own and if there are any communal areas etc?

    is there a lease you are party of?
    • futuresbright
    • By futuresbright 6th Sep 17, 9:02 PM
    • 72 Posts
    • 29 Thanks
    futuresbright
    OP - so i think you need to explain exactly what you own and if there are any communal areas etc?

    is there a lease you are party of?
    Originally posted by economic
    So as far as I know,

    I own my house and the land it sits on up to its borders,

    As do the neighbours I have spoken to so far, however there are some "affordable housing" which people rent from a housing association', not sure if these are classed as freehold or leasehold?

    The house builder still control the roads and footpaths but I believe they are soon to be adopted by the local council.

    The main drainage has just been adopted by United Utilities.

    The management company as far as I know control a 30m x 20m piece of grass planted with shrubbery, 3 flower beds approx 10 m x 2m and various trees planted across our estate.
    • ThePants999
    • By ThePants999 6th Sep 17, 10:28 PM
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    • 894 Thanks
    ThePants999
    Isn't the point that they own the freehold of their house but are caught because the freehold of the estate the house is on is owned by someone else (the builder).
    Originally posted by NeilCr
    Freeholds refer to land. The OP owns the land their house is on. I assume by "the freehold of the estate the house is on" you mean the communal areas that don't form part of any individual house freehold.

    If so, then until we get some more information, it appears to be the builder who is "caught", not the OP, because the builder owns the communal land, but has apparently failed to put any legal mechanism in place to allow them to charge the homeowners for its upkeep. They should have put covenants on the house freehold titles for that. If they had, the OP could have been considered "caught", but unless they're misreading their title, they get off scot free.
    • Emmanuel chill
    • By Emmanuel chill 7th Sep 17, 1:35 AM
    • 2 Posts
    • 2 Thanks
    Emmanuel chill
    I don't think that the management pack isn't interesting to the buyer themselves, their only interest is on the solicitors alone.
    • NeilCr
    • By NeilCr 7th Sep 17, 2:59 AM
    • 945 Posts
    • 999 Thanks
    NeilCr
    Freeholds refer to land. The OP owns the land their house is on. I assume by "the freehold of the estate the house is on" you mean the communal areas that don't form part of any individual house freehold.

    If so, then until we get some more information, it appears to be the builder who is "caught", not the OP, because the builder owns the communal land, but has apparently failed to put any legal mechanism in place to allow them to charge the homeowners for its upkeep. They should have put covenants on the house freehold titles for that. If they had, the OP could have been considered "caught", but unless they're misreading their title, they get off scot free.
    Originally posted by ThePants999
    Yep

    I'd say again that it does seem very surprising that given the estate has been built for four years and there are fifty eight properties on it that this issue ( I mean the payment of service charges) has only just arisen. While the OP is sanguine about them you'd have thought that someone else would have raised the matter before.

    And, of course, if it turns out that service charges aren't payable there will be the issue of what happens to the communal areas. It might prove difficult to get the builder to shell out on ongoing basis to keep them in good nick. So the OP may get "caught" in a different way
    • moneyistooshorttomention
    • By moneyistooshorttomention 7th Sep 17, 7:38 AM
    • 13,422 Posts
    • 36,573 Thanks
    moneyistooshorttomention

    The management company as far as I know control a 30m x 20m piece of grass planted with shrubbery, 3 flower beds approx 10 m x 2m and various trees planted across our estate.
    Originally posted by futuresbright
    How hard could it be - if need be - for 58 houses to deal with this informally themselves?

    There's bound to be at least a couple of keen gardeners dying to get their mitts on a few more plants to keep up plus someone with a lawn-mower that would mow it, say, once a fortnight and just shrug and regard it as their "deed for the day for the community".

    Where some might see a potential problem - I see a potential opportunity to say "If Todmorden can do it (ie Incredible Edible Todmorden) and be growing food plants every where - then this could be our chance. Right - out with the shrubs and in with fruit trees etc".
    Last edited by moneyistooshorttomention; 07-09-2017 at 7:41 AM.
    If there's "4 tendencies" type of people (Gretchen Rubin) = yep....Questioner type here
    - Meets an expectation only if they believe it's justified and resists anything arbitrary or ineffective
    • futuresbright
    • By futuresbright 7th Sep 17, 5:45 PM
    • 72 Posts
    • 29 Thanks
    futuresbright
    So i have recieved replies from both the house builder company solicitor today and the management company...

    A few things of interest from solicitor first:

    $$$$$$$= Management company
    £££££££=House builder

    1. I asked previously “where is it written down that there are fees payable to $$$$$$$ when selling?” If as I suspect, the Ltd company appointed $$$$$$$ then they, the Ltd company, should have known in advance what fees were payable. I have read every last piece of correspondence from £££££££ and $$$$$$$ to no avail. Could you point me in the right direction?The fees are not written anywhere as far as I am aware. Your solicitors acting for you at the time of purchase should have advised you that fees may be payable to the management company at the time of selling. This is the same for all properties where a management company exists. £££££££ does now document this in the Transfer Deed for transparency however at the time you purchased this may not have been the case.

    Wonder why that has changed? Probably amended sometime this week

    And from the managment company:


    • We confirm that we are the appointed as managing agent for the development. Under the transfer deed we are able to charge a reasonable fee under Part 11 for the management of the estate. It should be noted that any fees that are requested are in no way demanded,they are based on reasonable costs incurred as a result of managing the estate.
    Part 11 is here can anyone point me to the part about reasonable fees?


    https://ibb.co/nftAYa



    "As a result of producing such information a charge is levied for producing the same. However, for freehold houses the charge for a management pack has since been reduced to £200.00 plus VAT as leasehold properties require further administration and management a higher fee is charged. "



    Again when was this changed? Mty neighbour only moved a few weeks ago and was charged the full fee



    There is more but these were my favourite parts, i will be contacting both once again tommorow
    • ThePants999
    • By ThePants999 8th Sep 17, 12:15 AM
    • 791 Posts
    • 894 Thanks
    ThePants999
    OK, you've got an "estate rentcharge". That's exactly what I had on my last house. (Well, almost exactly - we had a residents' association in the form of a charitable trust instead of a management company, but that's unimportant.)

    Let me explain how it works - and having thrown away my paperwork relating to that house, I just paid £3 to the Land Registry to remind myself, I hope you're grateful

    - While they owned the land, the builders gave themselves a Grant of Estate Rentcharge, which basically says that the owner of the rentcharge has to do things (maintain the estate), and is allowed to collect money from the grantor of the rentcharge in return. The "Part 11" you've got is almost certainly a piece of the Deed of Grant of Estate Rentcharge that set this up - the section that details the obligations of the rentcharge owner.

    Here's an example I found of such a deed: http://eiv.org.uk/wp-content/uploads/2015/04/Rentcharge.pdf

    - They would also have noted this in the Charges Register on the title.

    - They added a restriction to the proprietorship register that says that the title can't be transferred without their consent.

    - Then they created a deed of covenant, or deed of transfer, that the buyer has to sign on purchasing the property. It basically commits the buyer to taking over as the "grantor" of the rentcharge (and therefore paying it), and also commits the buyer not to sell the property without making the subsequent buyer do exactly the same thing.

    To give you an example, my title contained this in the Property Register:

    <date of first sale> The land has the benefit of the rights granted by but is
    subject to the rights reserved by the Transfer dated 31 October 2000
    referred to in the Charges Register.
    And it had this in the Proprietorship Register:

    <date of first sale> RESTRICTION: Except under an order of the registrar no
    transfer or lease by the proprietor of the land is to be registered
    without the consent of <Residents Association>.

    <date I bought it> The Transfer to the proprietor contains a covenant to
    observe and perform the covenants referred to in the Charges Register
    and of indemnity in respect thereof.
    And finally, it had this in the Charges Register:

    <date while the builder owned it> A Deed dated 1 August 1997 made between (1) <builder> and (2) <Residents Association> contains a grant of a Rentcharge as therein mentioned.

    <date of first sale> A Transfer of the land in this title made between (1) <builder> (2) <Residents Association> and (3) <first buyer> contains restrictive covenants.
    The deed of transfer said this:

    The Transfer provides that the Transferee and successors in title and the Company will enter into a Deed of Covenant in the manner set out in the Transfer and the parties hereto have agreed to enter into these presents accordingly.

    ...

    The Transferee hereby covenants with the Company that she/he and her/his successors in title will at
    all times from the date of the transfer of the said property to the Transferee:
    a. Duly pay all sums payable under the clauses contained within the Rent Charge Deed.
    b. Observe and perform all the covenants restrictions and stipulations contained in the Transfer
    and on the part of the Transferee hereof to be performed (whether running with the Rent
    Charge Deed or of a purely personal collateral nature) to the same extent as if the same were
    fully set out herein.
    c. For so long as the Transferee retains any estate or interest in the said property not resign
    from or dispose of the rights attaching to her/his membership of the Company other than to
    a mortgage of the said property.

    3. The Company hereby covenants with the Transferee that the Company will at all times during the
    term of the Rent Charge Deed comply with the covenants set out in the Transfer.
    Dig out your files from when you bought the place. What did your solicitor get you to sign? I expect it included such a deed (which $$$$$$$ refers to as the "transfer deed"). Assuming your builder's system wasn't materially different to mine, then:
    - the deed of transfer compels you to pay the service charge ("rentcharge")
    - I suspect that there probably ISN'T anything in writing saying that you have to buy the management pack for £X, but there IS something in writing saying you can't sell the house without the management company's consent, and they won't give their consent unless you pay them! (They've got a little bit of work to do because they need to warrant to the buyer's solicitor that you're up to date with the rentcharge and they won't be inheriting any arrears, and they have to sort out a new deed of transfer with the buyer.)

    If you genuinely believe you signed no such deed, hop over to the Land Registry, pay £3 and have a look at your title register.
    • aMuseMe
    • By aMuseMe 8th Sep 17, 2:27 PM
    • 10 Posts
    • 7 Thanks
    aMuseMe
    I got in touch with Persimmon and Greenbelt about the potential for a similar charge being made in the event we sell our new house on; the response was swift - there's nothing written down regarding the specific amount that will be charged within the contracts/current homeowners pack/TP1, but there will always be a charge - approx £195 incl. VAT which would tie in with the capped price indicated in your enquiries.

    I'm keeping the email trail alongside the rest of the documentation for future reference, I'll be interested to see how your journey progresses...

    Happy Friday folks!
    • futuresbright
    • By futuresbright 8th Sep 17, 3:05 PM
    • 72 Posts
    • 29 Thanks
    futuresbright
    OK, you've got an "estate rentcharge". That's exactly what I had on my last house. (Well, almost exactly - we had a residents' association in the form of a charitable trust instead of a management company, but that's unimportant.)

    Let me explain how it works - and having thrown away my paperwork relating to that house, I just paid £3 to the Land Registry to remind myself, I hope you're grateful

    - While they owned the land, the builders gave themselves a Grant of Estate Rentcharge, which basically says that the owner of the rentcharge has to do things (maintain the estate), and is allowed to collect money from the grantor of the rentcharge in return. The "Part 11" you've got is almost certainly a piece of the Deed of Grant of Estate Rentcharge that set this up - the section that details the obligations of the rentcharge owner.

    Here's an example I found of such a deed: http://eiv.org.uk/wp-content/uploads/2015/04/Rentcharge.pdf

    - They would also have noted this in the Charges Register on the title.

    - They added a restriction to the proprietorship register that says that the title can't be transferred without their consent.

    - Then they created a deed of covenant, or deed of transfer, that the buyer has to sign on purchasing the property. It basically commits the buyer to taking over as the "grantor" of the rentcharge (and therefore paying it), and also commits the buyer not to sell the property without making the subsequent buyer do exactly the same thing.

    To give you an example, my title contained this in the Property Register:



    And it had this in the Proprietorship Register:



    And finally, it had this in the Charges Register:



    The deed of transfer said this:



    Dig out your files from when you bought the place. What did your solicitor get you to sign? I expect it included such a deed (which $$$$$$$ refers to as the "transfer deed"). Assuming your builder's system wasn't materially different to mine, then:
    - the deed of transfer compels you to pay the service charge ("rentcharge")
    - I suspect that there probably ISN'T anything in writing saying that you have to buy the management pack for £X, but there IS something in writing saying you can't sell the house without the management company's consent, and they won't give their consent unless you pay them! (They've got a little bit of work to do because they need to warrant to the buyer's solicitor that you're up to date with the rentcharge and they won't be inheriting any arrears, and they have to sort out a new deed of transfer with the buyer.)

    If you genuinely believe you signed no such deed, hop over to the Land Registry, pay £3 and have a look at your title register.
    Originally posted by ThePants999
    Thankyou for the very detailed reply and spending your hard earned helping me understand all this

    I have the "transfer deed" as to be expected and as you point out the covering word is "rent charge" which in my opinion they are hiding behind as they have not told anyone of these fees.

    I find it suspicious that the management company have now lowered their pack price to £200 and the house builder have started making new buyers aware of these fees in a more transparent way, they know it's wrong and excessive but have got away with it without anyone questioning it for some time.

    How come a 2nd occupant gets a management pack so they can understand what services they are paying for but the original buyer gets nothing but a word in their deeds which allows a company to charge what they want?
    • futuresbright
    • By futuresbright 8th Sep 17, 3:16 PM
    • 72 Posts
    • 29 Thanks
    futuresbright
    I got in touch with Persimmon and Greenbelt about the potential for a similar charge being made in the event we sell our new house on; the response was swift - there's nothing written down regarding the specific amount that will be charged within the contracts/current homeowners pack/TP1, but there will always be a charge - approx £195 incl. VAT which would tie in with the capped price indicated in your enquiries.

    I'm keeping the email trail alongside the rest of the documentation for future reference, I'll be interested to see how your journey progresses...

    Happy Friday folks!
    Originally posted by aMuseMe
    I wonder if you had asked the same question a couple of weeks ago you would have got such a swift reply?

    Good luck with your purchase, all I would say is document everything, ask endless questions if you are not sure and get their answers signed for, their salespeople seem to brilliant at telling you what you want to hear whether it's true or not just to buy time so you purchase then you take their word for it and before you know it time has passed by and when you go back to them they deny all knowledge.
    • aMuseMe
    • By aMuseMe 8th Sep 17, 6:47 PM
    • 10 Posts
    • 7 Thanks
    aMuseMe
    I wonder if you had asked the same question a couple of weeks ago you would have got such a swift reply?

    Good luck with your purchase, all I would say is document everything, ask endless questions if you are not sure and get their answers signed for, their salespeople seem to brilliant at telling you what you want to hear whether it's true or not just to buy time so you purchase then you take their word for it and before you know it time has passed by and when you go back to them they deny all knowledge.
    Originally posted by futuresbright
    Yeah - I've managed to get them to remove clauses from the 'standard' contract, and hammered their legal department enough to ensure there's as much transparency and a solid audit trail. The sales staff are awfully pushy, abrupt, and at times, just outright liars. My next mission is to cross reference the solar panels - there's no rental/lease on them (as per the scandal from previous years), however there seems to be some dispute over how much of the electricity generated is yours and how much goes back to the company that 'activate' them...

    It pays to be a pain in the a**e sometimes

    And thank you for the well wishes - we're just waiting for our mortgage offer to come through from Kensington - but that is a whole other thread!
    Last edited by aMuseMe; 08-09-2017 at 6:49 PM. Reason: Added thank you
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