Reasonable Convenants

LadyDomino

I'm a cash buyer hoping to buy a new build on a small estate of 8 houses. The developers weren't upfront about a management company to begin with and have opted to pay the service charges for 10 years from the sale of the last plot themselves.

After that each plot will pay 12.5% charge of the annual maintenance fees.

I understand that there needs to be a covenant in the deeds so when I sell the new owner will have to pay the service charge.

My problem is that the developers are saying in the case of a sale I will have to pay the developers legal charges.

Is this normal?

bowlhead99

Yes, pretty much, if something is leasehold then a new owner coming in will have to sign up to the lease; likewise if the new owner needs to enter into a service charge agreement or enter into covenants or similar, that's more documentation to put together which wouldn't need to be put together if you weren't selling to a new owner. Similarly the new buyers solicitors will want to get an information pack from the management company with copies of the accounts etc and again that is more work for the management company.

So if they have someone (you) all signed up to their existing documentation and you want to transfer ownership to another person and have that person become signed up to the documentation in your place, then you are creating work... and they want to get paid for doing that work.

If you don't want to pay for that, you could try to convince your buyer to pay for it, but they won't, because the buyer will say it's you that is trying to sell them the house so you need to pay any associated costs of the management company or developer or they won't buy it.