Estate management fees

Muttleythefrog

Quick question.

Only recently have I noticed this apparently creeping and concerning (because of apparent lack of legal protection to unreasonable charging) issue of Estate management/maintenance fees levied on freeholders in (new) estates to maintain upkeep of communal private areas such as landscaping, services and un-adopted (by local authority) roads.

Obviously you would expect details of these fees to arise during the conveyancing process but that's far from ideal if you want to avoid such fees because they could potentially transform an affordable home into an unaffordable or risky one. I'd be looking to avoid any such fees or responsibilities.

What are the best ways to establish this information up front?

a) Via the estate agent and their client by asking around time of making enquiries/viewing for such responsibility and current annual fee?
b) Via the original homebuilder company?
c) some other way?

Thanks in advance.

00ec25

obviously you ask whoever you can: the EA or direct to the developer

comeandgo

I would say estate agent. But not all maintenance fees are bad. We have them, the residents committee control them, we say what work needs to be done, and a budget is set. The council would not cut our grass every two weeks, tidy up trees where needed, repair any fencing. This is on the communal land, not individuals land.

davidmcn

Muttleythefrog wrote: »

Obviously you would expect details of these fees to arise during the conveyancing process but that's far from ideal if you want to avoid such fees because they could potentially transform an affordable home into an unaffordable or risky one.

No matter how overpriced the grass-cutting etc appears to be, if your 0.74% share of it makes the house unaffordable then you really haven't allowed enough leeway in your budgeting - goodness knows how you'd cope with interest rates doubling!

But in answer to the question, just ask the sellers for copies of previous invoices. If they're reluctant to tell you, that probably answers your question.

Muttleythefrog

davidmcn wrote: »

No matter how overpriced the grass-cutting etc appears to be, if your 0.74% share of it makes the house unaffordable then you really haven't allowed enough leeway in your budgeting - goodness knows how you'd cope with interest rates doubling!

But in answer to the question, just ask the sellers for copies of previous invoices. If they're reluctant to tell you, that probably answers your question.

Let me explain - circumstances are probably atypical. I'll be looking to sell my house which is owned outright and acquire a major 3rd party gift to help purchase a much more expensive home. There'd be no mortgages or loans involved. However unless circumstances change (which down the timeline is entirely plausible but not guaranteed) our income will be disproportionately low... so could be spending £200k on house but have annual income £12k...buying a home for £120k instead would not release any extra money into our budget (suffice for say council tax considerations and general bills if they were lowered accordingly)... it'd just restrict what we could buy. So perhaps counter intuitively we can afford what I'd say is a fairly expensive house.. but if we were asked to pay out of the blue to cover the costs of repairing private drains on an estate we could be sunk... pardon any pun. Normally with a house you can predict costs accurately or insure against surprise ones.. estate fees seem to in theory at least present something different to consider... yes something to budget for given current charging.. but where there could be finger in the sky repairs or increases down the line that are impossible to foresee or reasonably predict.

Yes reluctance to reveal would put me off.... it would be great if these details were simply placed up front in the Estate agent property details.

00ec25

Muttleythefrog wrote: »

it would be great if these details were simply placed up front in the Estate agent property details.

i would agree wholeheartedly with that but even for flats where "you" know there must be a service charge by definition, its size is not always shown upfront but can be easily ascertained by asking the EA as then they must tell you what they know. Of course their info may be wrong, so always worth checking with the vendor as well.

eddddy

If you're buying from an existing owner/occupier (i.e. you won't be the first owner of the house), you can ask the owner for details.

I guess they key questions to include would be:

What have you been paying for maintenance?
What gets done for that money?
What safeguards are in place to stop future fees sky-rocketing?
What safeguards are in place to stop things falling into disrepair?


(Being managed by a resident's committee is probably a good sign. But you might still find that you disagree with future committee members decisions on spending. e.g. more frequent grass cutting, more frequent litter picking, more frequent replacement of shrubs etc.)

NeilCr

I am a director of our estate. We do try and keep costs down but you do also have to be aware of unexpected problems. For us, this year, we have had massive problems with the electronic gates which are now way over budget. People do disagree with some of our decisions but that comes with the territory. We sometimes ask them if they would to join the committee - they usually decline!

Whilst you can look at the current and past invoices I'd also be seeing if there is anything that may cause an increase in charges over the coming years. If it's about things like gardening etc then you are probably going to be okay - these tend to rise by smallish amounts. But something like electronic gates may need more spent on them if they go wrong. If you are on a tight budget you don't want any nasty surprises

moneyistooshorttomention

One thing you don't have to worry about is the drains. Any drains that aren't on your personal property are up to the Water Board to sort (at their expense). It has been this way since 2011 - as I checked when I bought a house in an unadopted road after that date. I wanted to be sure and certain no-one could charge me anything towards those.

If buying in an unadopted road of any description - then spend £3-£7 buying a copy of the Register entry for the house from the Land Registry. Then you will see what is listed as payable by the owner of the house.

So Register entry will list:
- any money you have to pay towards maintenance of the road
- any other costs (eg estate "management fees") you have to pay towards the house.

If it's listed on that entry it's due.

Muttleythefrog

NeilCr wrote: »

I am a director of our estate. We do try and keep costs down but you do also have to be aware of unexpected problems. For us, this year, we have had massive problems with the electronic gates which are now way over budget. People do disagree with some of our decisions but that comes with the territory. We sometimes ask them if they would to join the committee - they usually decline!

Whilst you can look at the current and past invoices I'd also be seeing if there is anything that may cause an increase in charges over the coming years. If it's about things like gardening etc then you are probably going to be okay - these tend to rise by smallish amounts. But something like electronic gates may need more spent on them if they go wrong. If you are on a tight budget you don't want any nasty surprises

Interesting.... thanks.. and thanks to all others too.

I suppose the irony is at a time when 'community' seems in decline here we have a great mechanism to drive neighbours into dispute..lol... and new ones at that. But you're right... concern is that a big hit could come down the line... I've seen the odd horror story around... embarrassingly the issue I didn't even realise existed until I spotted a historical thread on here. I had no idea freeholders could be paying for maintenance of communal areas or roads but it might explain the terrible state near me of likely communal responsibility areas in new estates that the council seems to kick a fuss up about as the rats move in. Given I trust homebuilders as much as estate agents I have to say the energy inefficiency of older houses has suddenly become more attractive if new(er) houses on estates come with worry and grief.

Muttleythefrog

moneyistooshorttomention wrote: »

One thing you don't have to worry about is the drains. Any drains that aren't on your personal property are up to the Water Board to sort (at their expense). It has been this way since 2011 - as I checked when I bought a house in an unadopted road after that date. I wanted to be sure and certain no-one could charge me anything towards those.

If buying in an unadopted road of any description - then spend £3-£7 buying a copy of the Register entry for the house from the Land Registry. Then you will see what is listed as payable by the owner of the house.

So Register entry will list:
- any money you have to pay towards maintenance of the road
- any other costs (eg estate "management fees") you have to pay towards the house.

If it's listed on that entry it's due.

Very helpful... thanks! A horror story I read on drain repairs probably preceded the recent responsibility changes then. But the land registry entry conveying this kind of information is exceedingly useful because I would likely grab a copy before making an offer on a place anyway... so probably enquiring via estate agents in the first place and getting copy of register should probably cover most bases pending any surprises revealed in normal conveyancing enquiries. Cheers.