Rip Off 'Notice Fee' buying a house?

jonohake

I'm buying my first house - all looks good to go through and my solicitor has just hit me with a bill, included in this bill is an item for a 'Notice Fee' which should be paid to the people who collect the yearly rent charge (note house I am buying is a Freehold), and it comes in at £240. I've questioned my solicitor about this and they pretty much said I just have to pay it. It seems a bit fishy to me though - fee seems extortionate.

The house is freehold, but subject to a £3 per year rent charge. The company that collects the rent charge is called E & M (Estates and Management).

Can I get out of paying this, I can not find any example where a freeholder and not a leaseholder has to pay the management company a 'notice fee'.

Is there a body that governs these fees? What is to stop them hiking this notice fee again, and charging a worse amount when I come to sell the house and potentially scaring buyers off in the process.

Cakeguts

Yes some estates have management fees to maintain the parking spaces and communal grassed areas. If you don't want to pay this fee every year don't buy the house.

jonohake

the yearly fee is no problem - it is the 'notice fee' and the fact this is a freehold that concerns me.

It is a terrace and not a flat, and it is a freehold.

xylophone

http://www.cluttoncox.co.uk/site/blog/conveyancingblog/rentcharge_trap_cost_thousands_bristol.html

https://www.gov.uk/guidance/rentcharges

https://forums.moneysavingexpert.com/discussion/4786367 see post 7

http://www.hip-consultant.co.uk/blog/convenants-rentcharges-123/

Other Covenants Arising Out of a Rentcharge

As well as the covenant to pay the rent itself the deed creating the rentcharge will usually contain a number of other covenants, both restrictive and positive. These may include an obligation to serve notice on the rentcharge owner when the property changes or to obtain consent before carrying out any alterations. It is for the sake of the fees that can be charged in connection these matters that companies often purchase portfolios of rentcharges.

jonohake

Thanks for these links - they are great info, but I cannot find anything specific about an actual Notice Fee in them?

nyermen

I can't find anything either.

TBH, if you can enact any rights to "redeem it", I'd look to do that and consider those costs in your total offer.

Is yours a charge as part of a wider area (land split after rent charge?). If so, the "joint and several liablity" element would put me off (xylophone's gov.uk link - "The rentowner could make any one of the householders on the land pay all of the rentcharge")

scriv

I would read all the covenants and rent clauses very carefully with a solicitor to see if you do have to pay this 'Notice' as E&M are well known for exploiting every opportunity to charge extortionate admin fees for any possible 'event' regardless of whether it is in the lease/covenant or not.

If it is not explicitly stated in the clauses that you need to give them 'Notice', then I would argue that you are not legally obliged to provide this and would seek legal advice.

Or I would walk away now if you have not already committed too much to the prospective purchase as this could just be the start of charges for all kinds or restrictive covenants/ alterations/improvements or years of battling.

xylophone

but I cannot find anything specific about an actual Notice Fee in them?

See and read carefully bold in my post 4 above.

And

http://www.gbsolicitors.co.uk/house_purchase-landlord_fees.asp

relates to leaseholder but it would appear that the rent charge is being viewed in a similar way.

jonohake

As well as the covenant to pay the rent itself the deed creating the rentcharge will usually contain a number of other covenants, both restrictive and positive. These may include an obligation to serve notice on the rentcharge owner when the property changes or to obtain consent before carrying out any alterations. It is for the sake of the fees that can be charged in connection these matters that companies often purchase portfolios of rentcharges.

My solicitor has looked at the deeds and there are no covenants relating to giving notice to the rentcharge owner. I therefore think this is a strong case not to pay the money.

sheff6107

E&M tried to get me to pay them when selling a property, so the other side are probably being billed too!
Me and my solicitor just ignored them.