Restriction on Freehold by Management Company

AlfiestheCat

Hello!

Just trying to get a bit of advice.

Bought a new build in 2014. Now remortgaging. The solicitor acting for the bank has stated there is a restriction on our title that there is to be no disposition by the registered proprietor is to be registered without a certificate signed by [the management company].

And therefore our new mortgage is subject to this restriction.

The management co want £300 for them to provide the consent!

I have heard of restrictions like this on leasehold properties but mine is freehold - title absolute so I have no clue what my mortgage has to do with the management co or why they have to consent to it!

Checked the paperwork when we bought and there are clauses in the TR1 but nothing explaining this from our solicitor.

So in two years time when we remortgage again, we'll have all thes fees to pay again.

Sorry for the rant. I know we will have to comply to get the remortgage done but i just feel like weve been swindled!

Is this normal on freehold new builds?

Hoploz

What management company? I don't understand why there is one if you are freehold. Is it the builder or something?

Not much help, but I'm wondering where this will be in 50 years time when someone wants to sell and nobody has any idea who X management company ever was?!

AlfiestheCat

Its the company who we pay a service charge to to maintain the "common areas" i.e cutting the grass at the front of the development, etc. Basically we pay them £120 a year to do not much!

James_Tyroll

There's something similar in the freehold we've been given, makes me very nervous, as they effectively can hold you to ransom if you want to remortgage/sell your house!

AlfiestheCat

James_Tyroll wrote: »

There's something similar in the freehold we've been given, makes me very nervous, as they effectively can hold you to ransom if you want to remortgage/sell your house!

Ah! Glad to hear were not the only ones. I was starting to think the solicitors had made a mistake and it was meant to be on leasehold properties only.

Yeah, effectively they are! If we had of known earlier we would have probably gone for a mortgage with a longer term. At the moment its costing us £400 in "non-standard" fees just to change mortgage for two years - we got free standard legal fees but these are classed as extra!

Robbing #%^*!

AlfiestheCat

Hoploz wrote: »

Not much help, but I'm wondering where this will be in 50 years time when someone wants to sell and nobody has any idea who X management company ever was?!

Totally agree here. Leaseholders can apply to cancel the restriction if they can prove the management co is no longer active but i think the law is different for freeholders.

sl_jones

I can't understand what is going on in your situation, do you have a flat or is this a house/maisonette?

I have a flat which has a freehold on it, we are part of a self build block that consist of 12 flats, which half are owned by the freehold. When we applied for our first mortgage we didn't have to run anything by the management company, i also want to remortgage soon but i don't want this to happen.

david1951

Can you get together with the other freeholders and hire a new management company (this could be yourselves)? What does the TR1 form actually say?

Kyresa

I would question the need for the certificate as you are not disposing of the property, merely transferring the mortgage. Contact the management company and get clarification. You may just need to send them a new Notice of Charge upon completion of the re-mortgage and pay £60 or something for that.

These clauses are usually for sales or transfers of the property to other owners. Their purpose is so that the management company can ensure the new owners have signed the relevant Deed of Covenants before allowing ownership to be registered.