Service charges on new build house

Greyboy

We were recently planning to buy a new build. Just before reserving we were told that the estate was private and that we would be liable for service charges and unforeseeable extra repair/cleaning/maintenance/upkeep costs which would normally be paid for by the council or utility companies. This was even though there was no reduction in council tax.
We therefore pulled out, and suggest that everybody contemplating buying a newbuild enquires about extra charges before committing themselves. Looking at the first year's estimated budget for the property management company in charge of our new estate, half of the money paid by residents immediately disappears as a management fee. What remains seems insufficient to meet their costs, and so this charge will undoubtedly escalate. Caveat emptor.

HampshireH

Been said I know but your annual service charge will reflect the previous years costs. So when you bought your house there may not have been contracts in place for things like ground maintenance, rubbish bins being emptied, play area maintenance, etc.

Once the developments completes in certain areas these services are introduced and therefore the cost rises.

Usually (as others have said) there is a committee and the Management Company should hold at least annual if not quarterly meetings as well as issuing accounts.

I've been in both meetings where the management company has been very successful and others where costs spiralled due to poor management, procurement and communication. leading to residents paying for services not received. I represented a HA at the time and the leaseholders/tenants of the HA so that we could answer any queries should they come in.

The statement you received should list the individual aspects the charge is covering. But as I said before these are nearly always based on the previous years annual costs as a starting point. £9.20 was probably a minimal contribution to ensure getting services off the ground.

To the person who said it was a rip off and they wouldn't have bought. These service charges now apply to most (not all) new build estates - or anything not ex council. Either by way of residents committees or management companies in any areas where services are required and land isn't maintained by individual residents - I expect mostly because people no longer look after what is not their on the whole.

I remember as a kid my dad would frequently mow the verges near the house just because it was the done thing. These days you can go round many estates and clearly see what is and isn't managed.

As someone looking to buy, threads like this really interest me as the experiences of others are so useful

Karlhebdon

Hi hope you don’t mind me asking but how many houses are on your development ? And what is the rough size of open green spaces? Thank you!!!

Karlhebdon

Hi how many houses are on your estate?

HampshireH

There have been no posts on this thread since august. It's unlikely you will get one within 3 minutes of your first post before prompting with a 2nd.;)

richearle

My solicitor is saying..


We confirm that the property is freehold but subject to the payment of an anual service charge to a management company for maintaining the common areas of the estate to comply with the landscaping conditions of the planning permission

The service charge is a reimbursement for the costs actually incurred bythe management company who may subcontract some of the work which does not have to be the cheapest tender

As a member of the management company you will have a little say in these costs at the AGM etc

The estate is at least 15 years old and the charges are about £120 a year. Is this a safe bet to complete this purchase?

TazTia

I most certainly won't be buying a new build if this is the case. This is why we pay our council tax! Assuming they have sold or leased the areas of upkeep to a management company. We have a grassed area owned by the council at the end of our front garden but my neighbour and I take turns with cutting it. Certainly no fees involved.

Would definitely stick to houses prior to the new build new rules...

Mortgages are dear enough without having to worry about bad management companies and the fact that non payment of their fees could result in your credit file being affected, through no fault of your own. Whereas if the old rules applied this would never occur. I'll keep my older house thank you, it seems much more attractive now I have read this thread.......

deFoix

The quoted text above says that you would be a member of the company. Sounds like it’s a non-profit company limited by guarantee by the members - who are themselves the house owners. Might not be a sinister as people are making out.

Find out the company name and download its articles of association from the gazette website.

DoaM

If you're meaning post #47 ... that poster logged off immediately after making that post and hasn't been back since.

Last Activity: 02-03-2018 1:02 PM
Join Date: 02-03-2018

Blondetotty

BBH123 wrote: »

Classic isnt it.

Service charges are low to get people into buying the property and then once all purchased and completed up the costs go.

Exactly this! I purchased a new build SO in a small block of 5 flats. Two were still on the market at the time and I was told by the HA agent that the current service charge of just over £10 a month would stay "roughly" the same in the future (Yes I know, I was young, dumb and ignorant!). Ffwd a year later to all 5 properties sold and the service charges went up to nearly £150 a month. Apparently, according to the HA, the sales of all the flats coinciding with the increase was just me being paranoid...