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  • FIRST POST
    • brooky_agn
    • By brooky_agn 29th Sep 17, 2:59 PM
    • 6Posts
    • 0Thanks
    brooky_agn
    Nervous about Service Charge on a Freehold
    • #1
    • 29th Sep 17, 2:59 PM
    Nervous about Service Charge on a Freehold 29th Sep 17 at 2:59 PM
    Hi All,

    We are in the process of buying a new home (Linden Homes). It has a service charge of nearly £500 a year and the management company (owned by Linden Homes) will be baked into the Land registry.

    I'm very nervous about this. Should I be?

    I'm sure many people own a property with similar arrangement. As the home owner does anyone know if there is any protection against rip off escalating service charge fees? Who's to say in 5 years time the fee hasn't gone up 10 fold?

    Big UK house builders have had a great deal of bad press recently and we certainly don't want to be a victim.
Page 1
    • Lucky Duck
    • By Lucky Duck 29th Sep 17, 3:04 PM
    • 74 Posts
    • 34 Thanks
    Lucky Duck
    • #2
    • 29th Sep 17, 3:04 PM
    • #2
    • 29th Sep 17, 3:04 PM
    I wonder if you are confusing charges for maintaining the estate's road and landscaping with ground rents?
    • brooky_agn
    • By brooky_agn 29th Sep 17, 3:06 PM
    • 6 Posts
    • 0 Thanks
    brooky_agn
    • #3
    • 29th Sep 17, 3:06 PM
    • #3
    • 29th Sep 17, 3:06 PM
    Thanks for your reply. Sorry if I wasn't clear. It concerns service charge for maintaining areas not adopted by the council. It's a freehold property with no ground rent.
    • Lucky Duck
    • By Lucky Duck 29th Sep 17, 3:11 PM
    • 74 Posts
    • 34 Thanks
    Lucky Duck
    • #4
    • 29th Sep 17, 3:11 PM
    • #4
    • 29th Sep 17, 3:11 PM
    I have lived in houses with similar charges for 10 years now, it is annoying but I haven't yet experienced any increases in costs of the magnitude you describe.
    • brooky_agn
    • By brooky_agn 29th Sep 17, 3:25 PM
    • 6 Posts
    • 0 Thanks
    brooky_agn
    • #5
    • 29th Sep 17, 3:25 PM
    • #5
    • 29th Sep 17, 3:25 PM
    Have you been content with the service and are most residents happy?
    • Lucky Duck
    • By Lucky Duck 29th Sep 17, 5:05 PM
    • 74 Posts
    • 34 Thanks
    Lucky Duck
    • #6
    • 29th Sep 17, 5:05 PM
    • #6
    • 29th Sep 17, 5:05 PM
    I pay about £250pa, somebody comes every so often and mows the lawns, etc.

    Nothing much else to report.
    • Lysimache
    • By Lysimache 29th Sep 17, 5:45 PM
    • 53 Posts
    • 20 Thanks
    Lysimache
    • #7
    • 29th Sep 17, 5:45 PM
    • #7
    • 29th Sep 17, 5:45 PM
    You can in future challenge iffy service charges if they are costing more than the services they provide. It's different to ground rent - ground rent is profit for the company. Service charge is for repairs, renovations etc.
    • rtho782
    • By rtho782 29th Sep 17, 6:28 PM
    • 1,006 Posts
    • 711 Thanks
    rtho782
    • #8
    • 29th Sep 17, 6:28 PM
    • #8
    • 29th Sep 17, 6:28 PM
    There is no way to challenge it. Leaseholders can challenge service charges, freeholders cannot.

    http://www.solegal.co.uk/estate-rent-charges-beware-buying-freehold-homes-private-estates/

    They can put the charges up to whatever they want to.

    Friends of ours bought a house on one of these new build estates, the charges stayed low until the builders completed the estate and moved on, then went up every year.
    Deposit Saved since 01/12/15: £13,000 / £15,000 House Bought!

    Debt Cleared since 01/12/15: £6,000 / £7,500
    • G_M
    • By G_M 29th Sep 17, 7:33 PM
    • 41,450 Posts
    • 47,817 Thanks
    G_M
    • #9
    • 29th Sep 17, 7:33 PM
    • #9
    • 29th Sep 17, 7:33 PM
    I'd walk away, and tell the developer in writing to Head Office why I was doing so.

    But that's me.

    If developers want/need to set up arrangements for maintenance/upkeep etc, they should do so via a Residents Association or similar legal structure.

    If that cannot be done in a financially viable way till sufficient properties are sold, then a timescale to do so should be agreed as part of each sale.
    Last edited by G_M; 29-09-2017 at 7:36 PM.
    • hammy1988
    • By hammy1988 29th Sep 17, 10:36 PM
    • 75 Posts
    • 57 Thanks
    hammy1988
    We've just moved into a Linden homes house, our maintenance fee is £180 per annum. We have been here three months now (first wave) and we won't pay it until the roads and everything have been built properly.

    I'm not concerned over the fee, nearly all new developers have this.
    • G_M
    • By G_M 30th Sep 17, 12:05 AM
    • 41,450 Posts
    • 47,817 Thanks
    G_M
    We've just moved into a Linden homes house, our maintenance fee is £180 per annum. We have been here three months now (first wave) and we won't pay it until the roads and everything have been built properly.

    I'm not concerned over the fee, nearly all new developers have this.
    Originally posted by hammy1988
    Yes but it's because so many people just accept it without question that it's become so prevelant.

    At least with leasehold service charges, leaseholders have a right to take over, and manage the maintenance themselves if they so wish.

    Freeholders have no such right, because when leaseholders were granted that right by Parliament, it just wasn't an issue. Management charges for freeholders is a new phenomenom, and not a positive one.
    • getmore4less
    • By getmore4less 30th Sep 17, 8:30 AM
    • 29,995 Posts
    • 17,927 Thanks
    getmore4less
    Plenty of houses out there where you are not responsible for things you don't own.

    If you do go ahead get the full details of what this £500 is paying for and the scope they have to engage in works that could cost more in the future.
    • brooky_agn
    • By brooky_agn 4th Oct 17, 3:33 PM
    • 6 Posts
    • 0 Thanks
    brooky_agn
    Thanks for your replies. I have the breakdown of how the service charge is calculated.

    There is a fixed fee of £120 per unit per year and the rest are accounting, general repairs, landscaping, waste removal etc.. The total for 255 houses is £113,000 per year with the bulk of it £60k on landscaping.

    Our solicitor just said thats its all normal and standard. There is a clause in the land registry that the service charge can be disputed with an independent surveyor but that seems to be the only protection we have.
    • xylophone
    • By xylophone 4th Oct 17, 4:42 PM
    • 23,113 Posts
    • 13,397 Thanks
    xylophone
    https://rounceandevans.co.uk/cms/resources/freehold-houses-on-private-estates.pdf

    There is a fixed fee of £120 per unit per year and the rest are accounting, general repairs, landscaping, waste removal etc.. The total for 255 houses is £113,000 per year with the bulk of it £60k on landscaping.
    Blow that for a game of soldiers.
    • brooky_agn
    • By brooky_agn 4th Oct 17, 4:53 PM
    • 6 Posts
    • 0 Thanks
    brooky_agn
    Thanks for the link.

    Tricky one isn't it.... If the council don't take up areas then someone has to do it? I don't mind the £400 a year. I do mind if it goes up and up and up..

    More and more developments seem to be going this way and I expect at some point laws will change. The question remains if we are happy with this...
    • xylophone
    • By xylophone 4th Oct 17, 5:03 PM
    • 23,113 Posts
    • 13,397 Thanks
    xylophone
    The question remains if we are happy with this...
    Well nobody on the forum can answer that for you......
    • brooky_agn
    • By brooky_agn 4th Oct 17, 5:04 PM
    • 6 Posts
    • 0 Thanks
    brooky_agn
    Yup....
    • Time2go
    • By Time2go 4th Oct 17, 5:11 PM
    • 150 Posts
    • 28 Thanks
    Time2go
    Check whether the management company will ever be handed over to residents. I'm buying with persimmon and ours will be when they have finished site.
    • glasgowdan
    • By glasgowdan 4th Oct 17, 6:40 PM
    • 2,525 Posts
    • 2,821 Thanks
    glasgowdan
    60k pays for a sole landscape maintenance person and equipment present on site full time. I doubt a 200 house estate requires 5 man-days a week.

    So it sounds like they're adding a huge profit margin over and above what's normal.

    To you it's only £40 a month so you need to decide if that niggle will annoy you too much to buy this house.

    Most new estates will have similar charges.
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