buying a house on a private road

EachPenny

Barryoakcrest wrote: »

The difference is that some properties have no frontage some have alittle and some have a lot but the Co. rules were agreed that to simplify matters all residents would pay the same i.e one twentieth of the total cost.
The property in question refuses to pay anything unless he decides the work needs doing and then he may make a voluntary contribution.
This ability for the Co. to make decisions at the AGM is one of the greatest adantages of having the Co. Getting twenty individuals all to agree seperately to do anything would be a nightmare.
I should also add that the charge we are talking about is £80 per annum!

So if I understand correctly, in the previous situation, the dissenter had an obligation to pay the original owner/company (OldCo) for the costs associated with the maintenance of his frontage length plus 1/20th of the Common Road. The agreement was that he has to make a payment to OldCo, rather than doing the maintenance work himself?

When the road was transferred to the new management company (NewCo), did that transfer include the transfer of rights and obligations resulting from agreements (in the deeds) of the individual properties? In other words, was the dissenter's obligation to pay OldCo for maintenance transferred over to NewCo?

It worries me that you say here that the original statement is "irrelevant", because that implies that the importance of transferring the rights and obligations was not taken into account at the time of the sale.

The Companies argument is that the Co. now owns the road and is entitled to make a charge for its maintenance and that the statement in the deeds is now irrelevant(it being the provision made by the original owner who sold it to the Company.

If it was transferred, then the dissenter is obliged to pay NewCo in exactly the same way they would have had to pay OldCo. If it wasn't transferred, then my guess is the dissenter may still obligated to make payments to OldCo, even if OldCo no longer own the road.

It will depend on the exact wording of the agreement in the dissenter's deeds - but yours might provide clues. Does it specify that the rights and obligations of OldCo may be transferred?

If the rights and obligations of OldCo have been transferred to NewCo then I think the dissenter has little option but to pay - but only as per the original agreement. You wouldn't be able to change the apportionment of costs (i.e. as you have done to equal shares) without the consent of the dissenter.

I agree that the admin costs might be an issue if these are not specifically allowed for in the original agreement. One work around might be to estimate the annual cost of maintenance and then add the admin onto this as a %age fee. So rather than paying an an admin fee, each householder pays a 'supervision' or 'procurement' fee as a percentage added to the cost of actual work done. Whether this would be permitted by the agreement(s) is something you might need to get legal advice on.

moneyistooshorttomention

Yep...you've got what I'm trying to say EachPenny:T

It does look to me a bit like the legal position may not have been properly clarified when the set-up changed from OldCo to NewCo. Add that Solo Owner can surely not be bound by any decisions made by an association he hasn't even joined?

I know another thing I'm wondering is why exactly it did all change from OldCo to Newco. I can't see what benefit would be derived by those house-owners from swopping over like this (even if the previous owner of the road hadn't charged them to buy the road from her/him). I am somewhat wondering if that sale suited the previous road owner (ie they got money and got shot of responsibility) and they've persuaded the house-owners that it was for their benefit iyswim.

I have a feeling that previous owner of road might have pulled a fast one one way or another on Majority 19 owners in the road. No wonder they wanted to get shot of the road and to be paid for it too must have felt like "All their Christmases came at once" imo. After all - how come it's not known who the owner is exactly on many of these roads? Imo they'd make sure people knew who they were - IF it suited them. Otherwise there's probably a noticeable number of these owners that are well aware they are the owners - and are keeping rather quiet about it...

Barryoakcrest

Old Co.announced that he was intent on the disposal of the road and that if residents did not want it at £0.00 it,he would dispose of it otherwise.Residents decided the wise course was to take ownership.
Under Old.Co. no charges were actually made by anyone but Deeds stated that responsibility fro maintenance and repair were allocated on the basis of frontage.
I will check whether any obligations were transferred on NewCo.acquiring the road but I do not think so.
I just thought that now Newco owned the road they could decide the basis for maintenance charges but from what you say it would appear I am incorrect-perhaps we could charge on the basis of provision in his deeds i.e.frontage.
We are more concerned in maintaining the integrity of the Co.because it has proven to be a very effective means of managing the estate affairs to the general satisfaction off all.

moneyistooshorttomention

Ah - so you werent charged for the road. Now I see why this happened. Sorta proves my point that owning an unadopted road is a poisoned chalice (at least in this day and age) and hence I'm not surprised owner wanted rid of it.

I know I've already thought through whether I would buy/"buy" the unadopted road I live in if the chance ever arises and decided it's probably not a good idea for me to do so. Leave "the buck stops here" with current known owner:rotfl:

You are indeed wise to check the position re whether any obligations were transferred to NewCo.

I can't see what your road is like and can understand why it just seemed easiest to split costs equally into 20 parts - save a lot of complicated maths working out how much "frontage" each house has. In your position - I'd work out that figure anyway for the sake of argument. I'd measure out all the frontages and just how much "frontage" was there for each individual house. Then work out the charges proportionately on the OldCo basis.

Re-work them out on the NewCo basis.

Then send out a letter to each of the 20 houses involved - spelling out "It will cost your house personally £x on the old basis and £y on the new basis". It may be that the person concerned would actually find they would be paying a different amount to what they thought for their personal house under the new system.

What I think also needs to be done is to try and find some objective way for it to be decided by a non-involved outsider as to whether any maintenance work needs doing on the road and, if so, to what extent. Maybe a surveyor or someone at 10-yearly intervals?? That way it doesnt boil down to "One person thinks it needs doing/has persuaded several friends to agree with them/one or more people don't agree with them = cue for verbal battle about the differences of opinion".

I would say another aspect too is re the finances. Some sort of mechanism needs to be in place that whoever is acting as treasurer couldn't run off with the money to Barbados if they wanted to - as there were too many safeguards to prevent this happening. I know there wouldn't be a hope in heck of me ever handing over any money in advance for anything to "known owner" of my own road - as it's very clear they can't be trusted.

The other point I would make to you all is to ask whether the NewCo has taken out insurance cover on the road just-in-case. I investigated this when I bought my current house and it was about £250pa as far as I could see and I wondered if I would be due for a fair proportion of that charge before moving here. On moving here - there has been no mention whatsoever of there being such insurance cover and I'm 99.9% certain it doesn't exist. It's not my problem - there is a "known owner" of this road and that means they've either taken it on themselves personally to have that insurance cover and pay for it themselves on the one hand OR it's much more likely they haven't taken that cover out and "On their head be it" and, if anything ever happens, I'll just point in the right direction and say "Ring on their doorbell - it's their problem". In your position - you could take out that cover and it would be about £12-£15 per house pa I'd estimate.

You are fortunate that at least you have some "organisation" in your road. I've found it's totally non-existent in my own road and all there ever seems to have been is "known owner" and a busybody colluding to "order others around" in the past. That isn't normal modern practice - so there is now absolutely no mechanism whatsoever for anything to be done.

Barryoakcrest

Newco is a fully registered private company which submits annual accounts and has directors and an AGM.The AGM is the decision making mechanism and; although a final vote is always taken is generally run on consensus.
It is Co.policy that we do not make long term provision for major repairs.It was agreed that as and when this is required(at AGM taking proffessional advice,as you suggest) each house will provide 1/19th of the capital.) We all prefer to keep our own money and make our own investment decisions rather than in a "company saving fund") We would ask the solo owner for his share but if he decided the uneccesary he would refuse to contribute.
This way our costs (and therefore charges) are kept very low and provide for road insurance ,Directors insurance and a small amount for short term provision for minor items.eg road signs
I think we are very fortunate in having this Co. which provides an effective method for getting things done.An "organiser" as you say.I should not like to live here without it.Who would take initiative-how wold anything get decided?
Hence our wish to maintain integrity and avoid others now or in future deciding to go "solo"

EachPenny

Barryoakcrest wrote: »

Old Co.announced that he was intent on the disposal of the road and that if residents did not want it at £0.00 it,he would dispose of it otherwise.Residents decided the wise course was to take ownership.

As you probably know, this was a very astute move by the residents. Even if the dissenter never pays a penny, the rest of you have control over the road and can manage maintenance and third-party liability.

As moneyistooshorttomention says, if there is uncertainty about ownership and liability most people run a mile. But if OldCo had a clear right to claim (reasonable) costs for maintaining the road then obtaining ownership of the road for a relatively low investment and becoming entitled to charge for your 'services' has a positive attraction.... new build estate maintenance arrangements can be made into a cash cow, and there is no reason why the same cannot apply to old estate instastructure. By obtaining control you've potentially dodged a big bullet.

Barryoakcrest wrote: »

Under Old.Co. no charges were actually made by anyone but Deeds stated that responsibility fro maintenance and repair were allocated on the basis of frontage.

This is something you need to be absolutely clear on - is the responsibility to 'pay for the cost' or to 'put in hand necessary maintenance and repair'. If the obligation is only to make sure the road is maintained then the dissenter (and any of the other 19) don't have to pay NewCo anything, and only need to do whatever maintainance they (in their personal opinion) deem necessary. That is why private roads are often a nightmare as many people are content with minimal maintenance and there is nothing the neighbours can do about it.

Barryoakcrest wrote: »

I will check whether any obligations were transferred on NewCo.acquiring the road but I do not think so.

This is absolutely critical. If the rights and obligations haven't been transferred then you will either need to get new agreements in place (expensive and at least one is likely to refuse) or else go back to OldCo and ask that they now agree to transfer such rights and obligations that they may still have (at the risk of being held to ransom over the value of these).

Barryoakcrest wrote: »

I just thought that now Newco owned the road they could decide the basis for maintenance charges but from what you say it would appear I am incorrect.

As you'll probably gather from discussions earlier in the thread, the law on maintenance of private roads is a mess. The owner of a private road will probably have liability for any injury or damage occurring on the road through lack of maintenance, and has to observe other's rights of way over the road, but unless there is a clear legal obligation for the users (usually the frontagers) to pay, then the cost of maintenance usually falls on the owner of the road. The legal obligation (in the form of agreements in the deeds) is the critical thing.

Barryoakcrest wrote: »

Newco is a fully registered private company which submits annual accounts and has directors and an AGM.The AGM is the decision making mechanism and; although a final vote is always taken is generally run on consensus.
It is Co.policy that we do not make long term provision for major repairs.It was agreed that as and when this is required(at AGM taking proffessional advice,as you suggest) each house will provide 1/19th of the capital.) We all prefer to keep our own money and make our own investment decisions rather than in a "company saving fund") We would ask the solo owner for his share but if he decided the uneccesary he would refuse to contribute.
This way our costs (and therefore charges) are kept very low and provide for road insurance ,Directors insurance and a small amount for short term provision for minor items.eg road signs
I think we are very fortunate in having this Co. which provides an effective method for getting things done.An "organiser" as you say.I should not like to live here without it.Who would take initiative-how wold anything get decided?
Hence our wish to maintain integrity and avoid others now or in future deciding to go "solo"

It sounds like you have got things set up really well, bar the question of having the right to charge the residents for maintenance.

The only thing possibly missing would be for NewCo to have an awareness of the status of any utility plant (gas, water, sewerage, electricity, phone pipe and cables) which are under the road. Are these owned by the utility companies, or are they private? Do the utility companies know how to contact NewCo if they need to do any work on them? ..they might have details of OldCo on their database which might cause problems if OldCo ceases to exist. There is also the possibility of wayleaves - the utility companies might still be paying OldCo for the right to have cables and/or pipes running along the road (a long shot, but you need to know).

In relation to the utilities, the most important issue for you as NewCo is that the companies are able to contact you well in advance if they need to do any major work. You don't want to be in a position of spending ££££'s on resurfacing part of the road, only for a utility company to turn up a few days later to dig a hole.

Barryoakcrest

As far as I am aware the Deeds for the various propertiees are different in what they say regarding road maintenance.(having bee built over some 20yearsfrom first to last)However I think we have this covered because Newco is wholly and equally owned by the 19 shareholders (users) and therefore the question of the Co.(themslves) paying for road charges does not arise providing this is agreed at AGM.
The utilities question is equally covered in that all have been informed of new ownership and the one wayleave payable is also now paid the Company.