Maintenance charges

SolidShot

puregeordie wrote: »

I have just signed up to buy a new build and it states an ascending service charge and everybody pays it in the new development for upkeep of surrounding land scapes and general upkeep of area. My and every house on the development is freehold.

Cheers.

Just found an extract here that helps;
A service charge is usually payable on leasehold properties, but in some cases they are also payable on freehold properties where there are shared services or communal areas.
The most common service charge situations related to a freehold are when there are private roads, drains serving the properties or when the development has communal areas. In return for the payment, you will be granted rights to use common areas, services and rights of access.
Your transfer deed will contain such rights granted for your property and reserved to the other properties in common. This is subject to a provision for payment of the service charge normally calculated on a percentage of use between the properties.
You will be obliged to enter into an agreement with the developer and other property owners to continue to pay service charge. In most cases, a management company will be set up to collect the service charge and organise the upkeep and maintenance of the services. You may be granted a share in the management company and, as residents, have a say in the running of the building.
If the accrued service charge does not cover the amount required for any expenditure, a developer could demand higher premiums from you and the other owners to cover these costs if required.

cheers again.

And its forever? And they can put it up whatever whenever they like? What if it goes up a lot and you don't pay? What can thy do? Stop cutting the grass?

AddieH

SolidShot wrote: »

And its forever? And they can put it up whatever whenever they like? What if it goes up a lot and you don't pay? What can thy do? Stop cutting the grass?

As a former leaseholder who, collectively with other leaseholders, took control of the management of a large development you need to be very careful here.

Our previous managing agents were about to increase the service charge massively and this was due to lazy management of the development.

I worked very hard to keep the charges down (i.e. flat or no more than inflation) for the two years I was involved, but still we had leaseholders not paying. I should say that non-payment makes things even more difficult as things still have to be paid for. On the development I looked after the service charge covered buildings insurance, all water bills, communal electricity (mostly for lighting) and upkeep (grounds keeping, drainage, guttering, the oiks that continually fly-tipped the place).

So, while I think it's important to hold those responsible for delivering the services to account, you must bear in mind that there are costs which need to be covered (at the very least so that if a water leak causes your ceiling to cave in there's insurance to cover it, and that you don't get buried knee deep in prams, bricks, spoil or old mattresses).

Check everything out in advance, find out what the costs are, what is included, if there's a managing agent and what their record is. They aren't all bad, but there's a real spectrum, but remember the above and be reasonable as there may be someone around the corner trying to make the books add up and sobbing about the perennial non-payers.

G_M

In leasehold flats, it'sclear the fees cover 'communal areas/faclities' and structural maintenance/insurance.

In freehold houses, on developments,or private roads, there can be similar fees - again for maintaining communal areas but in this case it is the road, the verges, the grassland etc.

Yes, it's for ever. Grass does not stop growing after 2 years!

If you don'tpay, ultimately

a) you can be taken to court and
b) you can never sell as your buyer will want confirmation the charges are paid up to date before he commits to take over your house!

Fraise

My son has recently bought a flat in a large Victorian house. There's 4 separate flats all with their own front doors and own front and back gardens. There is a large driveway at the side of the house where my son has his own parking space and at the end of the drive are garages owned by the other flats.

He bought the house as share of freehold and at present all 4 flat owners have their own buildings insurance. They each pay about £20 month into a fund which covers works to drains (blockages etc), clearing gutters when necessary, and every 5 years they are supposed to have the exterior painted. They don't have any communal areas except the driveway.

One of the freeholders who has recently moved in is talking about hiring a management agency and increasing the fund money to about £100 a month, which seems ridiculous as they only have the gutters, drains and driveway that needs attention a couple of times a year.

What is the going rate for a flat-holder, and does it vary if it's a block of flats or just one house with 4 converted flats?

Gordon_Hose

SolidShot wrote: »

And its forever? And they can put it up whatever whenever they like? What if it goes up a lot and you don't pay? What can thy do? Stop cutting the grass?

They can take you to court to recover the money you owe. As the charge is clearly laid out in the lease they'll win every time, plus you'll end up paying their court costs on top.

Strapped

This sort of thing can really devalue a property. There is a lovely community near us, where a house has come up for sale. I would've been in there like a shot, but the "communal" parts belong to a local estate (stately home) and I know the residents have been having a nightmare over the maintenance. They've also been banned from cutting the grass themselves, and the place is going to ruin.

tim123456789

lisyloo wrote: »

You do have a choice.
You can not buy this house and go and buy one with a freehold.
.

the house probably is freehold, that doesn't stop there being such a charge.

And as we discussed in an earlier thread on this subject you actually have less rights to challenge this charge when it's applied to a FH house than you do with a LH one

tim

sad_gills_fan

Interesting to read the different accounts, ours is different again.
Bought a FH new buld 7 months ago, paid a % of the maintenance charge on completion and have just received the new bill for 2013.
The main charge (£78 per year per house) is for upkeep of a nature reserve area that the developers are supposed to be building. It won't be completed until at least October-December of this year but we are already being billed for it.

It also covers the annual audit for the management company .. I'm confused about this as why should we pay for their audit? I don't pay for Tesco or BT to have an annual audit afterall.

There are 102 properties within this 'group', with around 10 of us speaking about our Right to Manage. We haven't gotten as far as communicating to the other houses yet but can do if our first chat comes to anything.

So, to take over the management, do we have to set up a ltd company or can we just keep it tidy ourselves? The other payments are for mowing the tiny amount of communal green space, audits, management company fees and sundry minor expenses (fence repairs .. we have no shared ones as far as I can remember). So basically, we're paying money for the upkeep of a nature reserve we don't have.

Your thoughts are appreciated.:)

hazyjo

Just moved from a similar house - we paid a couple of hundred a year, I think, but it did include insurance on the two garages (leasehold, but the house was F/H), and we thought it was worth it as the estate was always neat, pruned/trimmed and re-planted regularly. Included repairs to things too - like one of the tall border logs round an edge kept falling down in the owners' parking area, and they replaced it with a concrete post.

Much better having a company do the lot for a fee than everyone having to sort it themselves (bet there'd be rows about who does what, who pays, if someone never bothers and another is always out there pruning, potholes on private communal bits (not council streets), etc...).

Jx

Jx

sad_gills_fan

hazyjo wrote: »

Just moved from a similar house - we paid a couple of hundred a year, I think, but it did include insurance on the two garages (leasehold, but the house was F/H), and we thought it was worth it as the estate was always neat, pruned/trimmed and re-planted regularly. Included repairs to things too - like one of the tall border logs round an edge kept falling down in the owners' parking area, and they replaced it with a concrete post.

Much better having a company do the lot for a fee than everyone having to sort it themselves (bet there'd be rows about who does what, who pays, if someone never bothers and another is always out there pruning, potholes on private communal bits (not council streets), etc...).

Jx

Jx

Thanks .. I see what you're saying and if this were our experience, then I'd defeinitely just pay it. But, the nature reserve is not even built but we're being charged for it, we have no private roads or pathways, only those that will be adopted by the council when the devleopment is finished.
I understand ther ewill always be those who would rather sit indoors and not partake in the gardening side, but then if we had people who were happy to do this, we're thinking it could still work.
It's mainly the charge for the nature reserve that's confusing us! I have emailed the company but the person who is dealing is out of the office.
Thanks.